Market Roundup
• For Fed, few reasons to end 'patient' stance on rates
• Fed may need time to find clarity on U.S. economy -Rosengren
• Tariffs, rural unemployment figure in to Fed outlook -Barkin
• Fed's Kaplan says U.S. corporate debt a reason for rate hike pause
• Fed's Kashkari says wages show labor market still has slack
• U.S. government posts $9 bln surplus in January
• BoE's inflation view suggests market underestimated rate hikes-Carney
• US Feb ISM N-Mfg PMI, 59.7, 57.3 forecast,, 56.7 previous
• US Feb Markit Comp Final PMI, 55.5, 55.8 previous
• US Feb Markit Svcs PMI Final, 56.0, 56.2 previous
• US Dec New Home Sales-Units, 0.621 mln, 0.600 mln forecast,, 0.657 mln prev, 0.599 mln revised
Looking Ahead - Economic Data (GMT)
• 5 Mar 23:00 Japan Jan All Household Spending YY, -0.4% forecast, 0.1% previous
• 6 Mar 00:30 Australia Q4 Real GDP QQ SA, 0.3% forecast, 0.3% previous
• 6 Mar 00:30 Australia Q4 Real GDP YY SA, 2.5% forecast, 2.8% previous
• 6 Mar 00:30 Australia Q4 Final
Consumption Exp QQ SA, 0.3% previous
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Bank of Japan Board Member Yutaka Harada to deliver a speech at a meeting with business leaders in Yamanashi
• 12:15 Bank of England Deputy Governor Jon Cunliffe to deliver a speech at LSESU Economic Symposium in London
• 15:00 Bank of Canada key policy interest rate announcement
• 17:00 Federal Reserve Bank of Cleveland President Loretta Mester to participate in moderated question-and-answer session hosted by the Columbus Partnership in Ohio
• 17:00 Federal Reserve Bank of New York President John Williams speaking at the Economic Club of New York
• 17:30 Michael Saunders, Bank of England member of the monetary policy committee, speaks at Imperial College Business School, London
• 18:00 Bank of England chief economist Andy Haldane to host first 'Citizens Panel' in Hull, northeast England
• 19:00 U.S. Federal Reserve issues the Beige Book of economic condition in Washington
Currency Summaries
EUR/USD: The euro slipped lower against the U.S. dollar on Tuesday, as better than expected U.S. services industries and new home sales data boosted greenback. Data showed, new single-family home sales increased to a seven-month peak in December, while the Institute for Supply Management said its gauge on services sector activity rose more than expected last month. An index that tracks the dollar against the euro, yen, sterling and three other major currencies edged 0.20percent higher to 96.84 at (2023 GMT). The euro fell to a two-week trough of $1.1290.Immediate resistance can be seen at 1.1333 (21 DMA), an upside break can trigger rise towards 1.1382 (50 DMA).On the downside, immediate support is seen at 1.1289 (38.2% retracement level), a break below could take the pair towards 1.1234 (Feb 15th low).
GBP/USD: British pound declined against the dollar on Tuesday, as investors waited for another round of Brexit developments in March. The British currency has dropped this week, reversing some of last week's surge, as traders book profits and investors turn nervous again about the sort of divorce Britain and the European Union will have and when or possibly even if it will occur. The pound declined 0.6 percent to a one-week low of $1.3097 before recovering to slightly above $1.31.Immediate resistance can be seen at 1.3146 (38.2% retracement level), an upside break can trigger rise towards 1.3048 (11 DMA).On the downside, immediate support is seen at 1.3146 (38.2% retracement level), a break below could take the pair towards 1.3098 (23.6% retracement level).
USD/CAD: The Canadian dollar strengthened against U.S. counterpart on Tuesday, as concerns about a trade dispute between United States and China and expectations the Canadian central bank could be on the cusp of changing its policy direction weighed on Canadian dollar. The Bank of Canada, which has raised interest rates 125 basis points since July 2017, is widely expected to leave its benchmark rate on hold on Wednesday at 1.75 percent.The central bank may be closer to a policy-turning point, as it is still set to hike its key interest rate once more later this year. Immediate resistance can be seen at 1.3366 (23.6% retracement level), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3288 (50DMA), a break below could take the pair towards 1.3259 (100 DMA).
USD/JPY: The dollar was little changed against Japanese yen on Tuesday, as investors adopted a wait-and-see approach as they tracked developments in U.S.-China trade talks. The United States has demanded that China make substantial changes to its laws and practices to protect U.S. intellectual property, end forced transfers of U.S. technology to Chinese firms, curb generous industrial subsidies and open the domestic market to U.S. companies. The two sides still had substantial work ahead to reach agreement on a way to ensure China's follow through on any pledges. Strong resistance can be seen at 112.07 (38.2% retracement level), an upside break can trigger rise towards 112.67 (23.6% retracement level).On the downside, immediate support is seen at 111.42 (100 DMA), a break below could take the pair towards 111.07 (11 DMA).
Equities Recap
European stocks edged higher at the close of a choppy and directionless session where indexes hovered around the flotation mark in the lack of news about Sino/U.S. trade talk.
UK's benchmark FTSE 100 closed up by 0.7 percent, the pan-European FTSEurofirst 300 ended the day up by 0.28 percent, Germany's Dax ended up by 0.2 percent, France’s CAC finished the day up by 0.2 percent.
Wall Street's main stock indexes moved in and out of positive territory on Tuesday as investors digested positive retailer earnings and economic data and eyed a key level for the benchmark S&P 500 index.
Dow Jones closed down by 0.04 percent, S&P 500 ended down 0.11 percent, Nasdaq finished the day down by 0.02 percent.
Treasuries Recap
U.S. Treasury bond yields were higher on Tuesday following a report showing business activity and spending jumped in non-manufacturing sectors in February, and after strong earnings from Target Corp encouraged investors to discount earlier reports of slowing U.S. retail sales.
The benchmark 10-year yield was last up 1.3 basis points to 2.735 percent. At both ends of the yield curve, the 30-year yield was last at 3.094 percent, up 0.3 basis point, and the two-year yield, which reflects investor expectations of future rate hikes, was up 1.4 basis points to 2.559 percent.
Commodities Recap
Gold prices slipped on Tuesday to their lowest in more than five weeks as the dollar rose on stronger than expected economic data and rising U.S. Treasury yields. Global equities held near five-month highs.
Spot gold was down 0.1 percent at $1,287.57 per ounce at (2055 GMT). U.S. gold futures settled down 0.2 percent to $1,284.7 per ounce.
Oil prices held near flat on Tuesday as the market wavered on expectations that the United States and China would reach a trade agreement as early as this month while awaiting U.S. government crude inventory data.
Brent , the international benchmark, settled at $65.86 a barrel, up 19 cents. U.S. West Texas Intermediate crude settled at $56.56 a barrel, down 3 cents.
