Market Roundup
• US Feb ADP Nonfarm Employment Change 117K, 177K forecast, 174K previous
•Canada Jan Building Permits (MoM) 8.2%, 3.5% forecast,-4.1% previous
• US Feb Services PMI 59.8, 58.9 forecast, 58.3 previous
• US Feb Markit Composite PMI 59.5, 58.8 forecast, 58.7 previous
• US Feb ISM Non-Manufacturing Employment 52.7, 55.2 previous
• US ISM Non-Manufacturing New Orders 51.9 ,61.8 previous
• US Feb ISM Non-Manufacturing Prices 71.8,64.2 previous
• US ISM Non-Manufacturing PMI 55.3, 58.7 forecast, 58.7 previous
• US Crude Oil Inventories 21.563M,-0.928M,1.285M previous
Looking Ahead - Economic data (GMT)
• 23: 50 Japan Foreign Reserves (USD) 1,392.1B previous
•23:50 Japan Foreign Bonds Buying -1,893.0B previous
•23:50 Japan Foreign Investments in Japanese Stocks 94.1B previous
•00:30 Australia Jan Imports (MoM) -2% previous
•00:30 Australia Exports Jan (MoM) 3% previous
•00:30 Australia Jan Trade Balance 6.500B forecast, 6.785B previous
•00:30 Australia Jan Retail Sales (MoM) 0.6% forecast, 0.6% previous
Looking Ahead - Economic events and other releases (GMT)
•03:25 Australia RBA Kearns Speaks
Currency Summaries
EUR/USD: The euro declined against dollar on Wednesday as investors priced for strong U.S. growth relative to other regions. Investors have boosted bets on U.S. growth and inflation as the government prepares new fiscal stimulus, and speculation is rising that the Federal Reserve could also be closer to normalizing monetary policy than previously expected. The U.S. currency has also benefited from a rise in U.S. Treasury yields. Benchmark 10-year yields on Wednesday rose to 1.481%, though they are below a one-year high of 1.614% reached last week. The dollar index was last up 0.22% at 90.997.The euro dipped 0.30% to $1.2054. Immediate resistance can be seen at 1.2110(50%fib), an upside break can trigger rise towards 1.2184(61.8%fib).On the downside, immediate support is seen at 1.2029 (Lower BB), a break below could take the pair towards 1.1989(2nd March low).
GBP/USD: Sterling steadied against the dollar on Wednesday after the announcement of an expansive budget designed to prop up the British economy as it prepares for a re-opening from lockdown. British finance minister Rishi Sunak delivered an annual budget speech in which he announced a costly extension to emergency aid programmes and tax hikes for businesses. Sterling is the best-performing G10 currency this year, up about 2% versus the dollar, as investors bet the speed of Britain’s vaccination programme will enable a faster reopening of its economy, which has suffered its worst annual contraction in 300 years. Immediate resistance can be seen at 1.4000(Psychological level), an upside break can trigger rise towards 1.4042 (23.6%fib).On the downside, immediate support is seen at 1.3915 (38.2%fib), a break below could take the pair towards 1.3810(50%fib).
USD/CAD: The Canadian dollar edged lower against its broadly stronger U.S. counterpart on Wednesday, but held on to most of this week's gains as oil prices rose and domestic data showed the value of building permits scaling a record high in January. U.S. crude prices were up 2.1% at $61.01 a barrel, boosted by expectations that OPEC+ producers might decide against increasing output when they meet this week, while signs of progress in the U.S. vaccine rollout gave further support. The loonie was trading 0.1% lower at 1.2641 to the greenback, or 79.11 U.S. cents, having traded in a range of 1.2592 to 1.2657. Immediate resistance can be seen at 1.2641 (38.2%fib), an upside break can trigger rise towards 1.2695(50%fib).On the downside, immediate support is seen at 1.2575(23.6%fib), a break below could take the pair towards 1.2500 (Psychological level).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday as a retreat in U.S. Treasury yields fuelled demand for riskier assets. The yield on 10-year Treasury notes stood at 1.41%, down from last week’s one-year high of 1.61%, before a slew of U.S. economic data set for release later this week. Bond yields rise when their prices fall. Surging yields across the world, fuelled by moves in Treasuries, have buffeted financial markets in recent weeks. Investors were betting a strong U.S. economic rebound amid ultra-loose monetary conditions would fuel inflation. Still, optimism that more imminent U.S. stimulus will energise the global economic recovery. Immediate resistance can be seen at 107.06 (38.2%fib), an upside break can trigger rise towards 107.54 (23.6%fib).On the downside, immediate support is seen at 106.52 (5DMA), a break below could take the pair towards 106.29 (61.8%fib).
Equities Recap
European stocks ended flat on Wednesday, with gains in economy-sensitive sectors offset by a rise in bond yields as investors raised their inflation expectations for the year.
UK's benchmark FTSE 100 closed up by 0.93 percent, Germany's Dax ended up by 0.29 percent, France’s CAC finished the day up by 0.35 percent.
Wall Street’s main indexes opened lower on Wednesday as disappointing private employment data for February dampened enthusiasm over a quick economic rebound fueled by a swift rollout of COVID-19 vaccines.
Dow Jones was up by 0.23% percent, S&P 500 was last down by 0.64% percent, Nasdaq was last down by 2.08% percent.
Treasuries Recap
Longer-term U.S. Treasury yields rose on Wednesday, as investors looked to comments from Federal Reserve Chair Powell on Thursday for signs the central bank was set to acknowledge the risk of a rapid rise in rates.
The yield on 30-year Treasury bond was up 4.6 basis points to 2.261%.
Commodities Recap
Gold prices slipped on Wednesday, falling for a sixth session in seven, as expectations that U.S. Treasury yields would move higher on further economic stimulus kept non-yielding bullion under pressure.
Spot gold eased 0.2% to $1,734.26 per ounce by 0743 GMT, having dropped to its lowest since June 15 at $1,706.70 on Tuesday. U.S. gold futures dipped 0.1% to $1,731.70.
Oil prices rose more than 3% on Wednesday, boosted by a huge drop in U.S. fuel inventories and expectations that OPEC+ producers might decide against increasing output when they meet this week.
Brent crude rose $1.75, or 2.8%, to $64.45 a barrel, by 1:42 p.m. EST (1842 GMT). U.S. West Texas Intermediate (WTI) crude rose $1.92, or 3.2%, to $61.67 a barrel, a 3.2 percent gain.
