Market Roundup
• US Mar New Home Sales-Units, 0.692 mln, 0.650 mln forecast, 0.667 mln previous, 0.662 mln revised
• US Mar New Home Sales Chg MM, 4.5%, -2.5% forecast, 4.9% previous, 5.9% revised
• Dollar strong as traders await U.S. Q1 GDP data; pound hurt by Brexit woes
• Oil surges amid OPEC caution to offset Iran sanctions
• Trump adviser Kudlow 'cautiously optimistic' on trade deal with China
• Pence to visit Michigan to tout new North American trade deal
• UK watchdog urges EU to make financial market access flexible
• CA Feb Wholesale Trade MM, 0.3%, 0.1% forecast, 0.6% previous, 0.4% revised
• Italy's fiscal dispute with EU might resume after debt exceeds forecasts
Looking Ahead - Economic Data (GMT)
• 01:30 Australia Q1 CPI QQ, 0.2% forecast, 0.5% previous
• 01:30 Australia Q1 CPI YY, 1.5% forecast, 1.8% previous
Looking Ahead - Events, Other Releases (GMT)
• 07:00 Riksbank to hold monetary policy meeting in Stockholm
• 13:15 British Finance Minister Philip Hammond speaks to lawmakers on parliament's Treasury Committee in London
• 14:00 Bank of Canada announces its key policy interest rate and Monetary Policy Report in Ottawa
• 15:15 Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins hold a press conference to discuss the content of the Monetary Policy Report in Ottawa
Currency Summaries
EUR/USD: The euro declined against the U.S. dollar on Tuesday, as traders favored the greenback ahead of the release on Friday of U.S. gross domestic product data for the first three months of 2019.The dollar index, which measures the greenback against six currencies, rose 0.34% to 97.622, its highest since June 2017. The euro was 0.33% lower at $1.1218 after briefly slipping below the $1.12 handle for the first time in nearly three weeks. Immediate resistance can be seen at 1.1264 (11 DMA), an upside break can trigger rise towards 1.1298 (50% retracement level).On the downside, immediate support is seen at 1.1189 (Daily low), a break below could take the pair towards 1.1175 (March 7th low).
GBP/USD: Sterling slid to a two-month low against dollar on Tuesday, as hopes for a breakthrough in Brexit talks between the ruling and opposition parties faded and British Prime Minister Theresa May faced growing pressure to quit. Britain's parliament returned from an Easter recess on Tuesday as the government continued its talks with the opposition Labour party about forging a Brexit agreement that can win the support of lawmakers. After earlier trading as high as $1.3019 in mid-European trading, the pound dropped to as low as $1.2928, down 0.3 percent on the day and its weakest since February 19. Immediate resistance can be seen at 1.3015 (Daily high), an upside break can trigger rise towards 1.3107 (50% retracement level).On the downside, immediate support is seen at 1.2926 (38.2% retracement level), a break below could take the pair towards 1.2900 (Psychological level).
USD/CAD: The Canadian dollar weakened to a nearly four-week low against its U.S. counterpart on Tuesday, as the greenback climbed broadly and investors bet that the Bank of Canada would forgo language pointing to further interest rate hikes. Canada’s central bank is expected to hold its benchmark interest rate steady at 1.75% on Wednesday and for the rest of this year, with calls for the next hike in early 2020 resting on a knife's edge. The Canadian dollar was trading 0.7% lower at 1.3436 to the greenback, or 74.43 U.S. cents, its biggest decline in nearly seven weeks. Immediate resistance can be seen at 1.3441 (38.2% retracement level), an upside break can trigger rise towards 1.3424 (March 7th high).On the downside, immediate support is seen at 1.3376 (50% retracement level), a break below could take the pair towards 1.3304 (61.8% retracement level).
USD/JPY: The U.S. dollar was little changed against the yen on Tuesday, as investors awaited the release of U.S. GDP data later in the week for an indication of the strength of the world's largest economy. Better-than-expected economic readings from both the United States and China lately have assuaged investor concerns of a sharp global economic slowdown, although weak manufacturing surveys from Asia and Europe have kept a lid on sentiment. The dollar was last trading 0.01 percent higher versus the Japanese yen at 111.86. Strong resistance can be seen at 112.16 (38.2% retracement level), an upside break can trigger rise towards 112.78 (23.6% retracement level).On the downside, immediate support is seen at 111.66 (50% retracement level), a break below could take the pair towards 111.11 (61.8% retracement level).
Equities Recap
Energy stocks boosted by a steady surge in oil prices, and a higher open on Wall Street helped European shares erase session losses and close higher on Tuesday, but a sell-off in banks and auto stocks kept gains in check.
The UK's benchmark FTSE 100 closed up by 0.83 percent, FTSEurofirst 300 ended the day up by 0.32 percent, Germany's Dax ended up by 0.16 percent, and France’s CAC finished the up by 0.28 percent.
The S&P 500 index and the Nasdaq registered record closing highs after a broadbased rally on Tuesday, as a clutch of better-than-expected earnings reports eased concerns about a slowdown.
Dow Jones closed up by 0.54 percent, S&P 500 ended up 0.88 percent, Nasdaq finished the day up by 1.31 percent.
Treasuries Recap
The yield curve steepened to just a tenth of a basis point below its 2019 high on Tuesday, indicating investor bullishness as strong U.S. company earnings pushed the S&P 500 index toward record highs.
The spread between the two- and 10-year Treasury note yields , a highly watched measure of the yield curve, rose as high as 20.7 basis points, for the second consecutive day above 20 basis points, a level the spread has struggled to break through this year.
Commodities Recap
Gold prices slipped to a near four-month low on Tuesday as the U.S. dollar gained and investors sought out riskier assets, dampening the safe-haven metal's appeal.
Spot gold was down 0.1 percent at $1,272 per ounce as of (2202 GMT), after falling to its lowest level since Dec. 26 at $1,265.90 earlier in the session.U.S. gold futures settled 0.3 percent lower at $1,273.20 an ounce.
Oil prices hit their highest in about six months on Tuesday as sources said Gulf OPEC members were ready to raise output only if there was demand before offsetting any shortfall following a U.S. decision to end waivers for buyers of Iranian crude.
U.S. crude futures settled up 75 cents, or 1.1 percent, at $66.30 a barrel, after hitting an intraday high of $66.60, the highest since Oct. 31.
Brent crude rose 47 cents, or 0.6 percent, to $74.51 a barrel. The global benchmark earlier touched $74.73, a level not seen since Nov. 1.
