Market Roundup
• US Consumer Confidence 125.6 v 114 forecast, 116.1 previous, highest since Dec 2000.
• US Advance goods trade balance Feb -65b v -69b previous.
• US wholesale inventories Feb 0.4% v -0.2% previous, Retail inventories 0% v 0% previous.
• US Case Shiller 20 y/y Jan 5.7% v 5.6% forecast 5.5% previous.
• Fed’s Fischer: Pulled ACA vote did not change calculus, two more hikes about right.
• Fed’s Kaplan: It is in interest of the world for EU, euro to survive, Fed should raise rates patiently & gradually.
• BoE’s McCafferty: leans against early rate hike, rising inflation will crimp UK consumer purchasing power.
• UK government rejects Scotland's bid for Indyref2, vote anticipated end 2018/early 2019.
• Trump to sign order sweeping away Obama-era climate policies.
• "You can still stop Brexit," EU lawmakers to tell Britons; Lawmakers want to encourage Britons to halt Brexit.
• German bond auction fails as French election nerves ease, First technical failure of Schatz auction since Nov.
• French/German yield gap touches 2-month low, Polls show Macron firm favorite for the French presidency.
• South Africa's Gordhan returns, says still finance minister despite talk of sacking, Media report: ANC top 6 approve sacking.
• Oil rises on Libyan disruption, OPEC deal extension hopes; Upside capped by expected rise in US stockpiles.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Retail Sales YY Feb forecast 0.5%, 1%-previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0769 levels and currently trading at 1.0814 levels. The pair has made session high at 1.0853 and hit lows at 1.0814 levels. Euro declined against the dollar on Tuesday as investors chose to look beyond U.S. President Donald Trump's setback on healthcare reform and awaited comments from Fed Chair Janet Yellen. The dollar steadied as the promise of more rises in Federal Reserve interest rates this year helped it recover from multi-month lows hit on Monday. The dollar was also boosted after a survey showed U.S. consumers' confidence in the economy rose in March. The cutoff date for the survey was March 16. The Conference Board said the consumer confidence index hit 125.6, surpassing expectations for a reading of 114 and much higher than the reading of 116.1 in February. The March reading was the highest since December 2000.The dollar index was up 0.6 percent at 99.711 in a volatile session, after hitting a four-and-a-half month low on Monday. The euro fell 0.5 percent against the dollar to $1.081. Investors were awaiting Fed Chair Janet Yellen's speech at a conference in Washington, where she could provide some insight into the timing of the central bank's next interest rate hike.
GBP/USD is supported in the range of 1.2428 levels and currently trading at 1.2458 levels. It reached session high at 1.2512 and dropped to session low at 1.2431 levels. Sterling declined against the dollar on Tuesday as sterling was weighted down ahead of Britain's formal launch of negotiations on leaving the European Union. British Prime Minister Theresa May will trigger Article 50 of the EU's Lisbon Treaty with a formal notification of Britain's intent to leave the bloc on Wednesday, kicking off a two-year period of exit talks. Investors' main fear is that a "hard" Brexit one in which Britain would lose preferential access with its largest trading partner would damage the British economy, which is showing signs of faltering. Worries are also growing that Britain's exit negotiations could be tough and protracted, as both Theresa May and European leaders take bold opening stances. Stronger-than-expected UK inflation and signs the Bank of England is edging towards raising interest rates helped the pound over the past two weeks. It hit a two-month high of $1.2615 on Monday in a move driven chiefly by the broader weakness of the dollar. But uncertainty surrounding the terms of Britain's exit from the EU continues to weigh on the currency, still down by nearly 20 percent against the dollar since last June's Brexit vote. Sterling was last trading down 0.8 percent at $1.2450.
USD/CAD is supported at 1.3303 levels and is trading at 1.3381 levels. It has made session high at 1.3385 and lows at 1.3353 levels. The Canadian dollar strengthened against its U.S. counterpart on Tuesday as oil prices rose and the greenback recovered from 4 month low. The U.S. dollar steadied against a basket of major currencies after its worst week since U.S. President Donald Trump's election in November. Tuesday's gains follow declines last week as investors fretted over Trump's ability to enact his agenda after his fellow Republicans failed to pass their healthcare bill. However, investors appear to have shrugged off the setback, choosing instead to focus on Trump's promise of reforming the U.S. tax code, which has been a key driver in the post-election record rally. Oil, one of Canada's major exports rose as much as 2 percent after a severe disruption to Libyan oil supplies and as officials suggested OPEC and other producing countries could extend an output cuts deal to the end of the year. The Canadian dollar was last trading at C$1.3380 to the greenback, or 74.75 U.S. cents, slightly stronger than Monday's close of C$1.3386, or 74.76 U.S. cents.
USD/JPY is supported around 110.00 levels and currently trading at 111.14 levels. It peaked to hit session high at 111.20 and made session lows at 110.51 levels. The U.S. dollar inched higher against the safe-haven Japanese yen on Tuesday as the dollar gained back a bit of strength and traders took profits on recent yen’s rally. The healthcare setback boosted safe-haven appeal in the last few days as investors worried about how it would impact the Trump administration's push for an overhaul of the tax code and other efforts to boost the economy. The yen has gained 4 percent against the greenback in the last nine days as markets have lost confidence in the Trump administration's ability to deliver tax reform and a promised public spending boost. Meanwhile, investors were awaiting Fed Chair Janet Yellen's speech at a conference in Washington, where she could provide some insight into the timing of the central bank's next interest rate hike. The dollar strengthened against most major currencies in midday trading after being flat to lower earlier in the day. It was last up 0.6 percent against a basket of major currencies that measures its overall strength to 99.711, the strongest one-day percentage gain since March 1.
Equities Recap
European shares staged a recovery on Tuesday, lifted by strong results and the prospect of deal-making.
The UK's benchmark FTSE 100 closed up by 0.7 percent, FTSEurofirst 300 ended the day up by 0.42 percent, Germany's Dax ended up by 1.3 percent, and France’s CAC finished the up by 0.6 percent.
U.S. stocks ended sharply higher on Tuesday, with financial and energy shares surging as data showed U.S. consumer confidence soaring to a more than 16-year high.
Dow Jones closed up by 0.73 percent, S&P 500 ended up 0.73 percent, Nasdaq finished the day up by 0.61 percent.
Treasuries Recap
U.S. Treasury debt yields rose on Tuesday, in generally below-average volume, tracking a jump in stocks after U.S. consumer confidence surged to a 16-year high.
In the late trading, benchmark 10-year notes were down 11/32 in price to yield 2.416 percent, up from 2.375 percent on Monday.
U.S. 30-year bond prices were down 24/32, yielding 3.017 percent, higher than Monday's 2.98 percent.
U.S. two-year note yields were at 1.301 percent, up from Monday's 1.267 percent.
Commodities Recap
Oil prices rose as much as 2 percent on Tuesday after a severe disruption to Libyan oil supplies and as officials suggested OPEC and other producing countries could extend an output cuts deal to the end of the year.
Brent crude rose 58 cents, or 1.14 percent to settle end $51.33 per barrel. West Texas Intermediate (WTI) crude ended the session 64 cents, or 1.34 percent higher at$48.37 a barrel.
Gold prices turned lower on Tuesday, after nearing the prior session's one-month high, as the U.S. dollar, Treasury yields and stock markets extended gains.
Spot gold was down 0.3 percent at $1,249.56 an ounce by 2:34 p.m. EDT (1834 GMT), having touched its highest in a month at $1,261.03 on Monday. U.S. gold futures settled down 0.01 percent at $1,255.60.
