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America's Roundup: Dollar weakens on U.S.-China trade hopes, Gold hits 10-month high, Wall Street rises modestly, Brent dips as demand worries weigh-February 20th, 2019

Market Roundup

• Trump mulls pushing March 1 deadline on tariffs on Chinese goods

• New round of U.S.-China trade talks to begin in Washington on Tuesday

• U.S. wants pledge for stable Chinese yuan as talks resume -report

• Offshore yuan hits 2-week peak on report on stable currency pledge

• Bernie Sanders to seek U.S. presidency again in 2020

• Fed's Mester says higher rates likely needed later this year

• WTO warns of global trade slowdown as indicator hits 9-year low

• May heads to EU on Wednesday to push for Brexit breakthrough

• US Feb NAHB Housing Market Indx, 62, 59 forecast, 58 previous

Looking Ahead - Economic Data (GMT)

• 19 Feb 21:45 New Zealand Q4 PPI - Outputs QQ, 1.5% previous

• 19 Feb 21:45 New Zealand Q4 PPI - Inputs QQ, 1.4% previous

• 19 Feb 23:50 Japan Jan Exports YY, -5.5%, forecast, -3.8% previous, -3.9% revised

• 19 Feb 23:50 Japan Jan Imports YY, -2.8% forecast, 1.9% previous

• 19 Feb 23:50 Japan Jan Trade Balance Total Yen, -1,011.0 bln forecast, -55.3 bln previous, -56.7 bln revised

• 20 Feb 00:30 Australia Q4 Wage Price Index QQ, 0.6% forecast, 0.6% previous

• 20 Feb 00:30 Australia Q4 Wage Price Index YY, 2.3% forecast, 2.3% previous

Looking Ahead - Events, Other Releases (GMT)

• N/A San Francisco Fed's Mary Daly, a policy centrist, will speak about the labor market at the Stanford Institute of Economic Policy Research in Palo Alto, United States

• 07:00 ECB chief economist Peter Praet delivers Speech by at 11th Frankfurt Main Financial Centre Breakfast organized by Frankfurt Main Finance e.V. in Frankfurt, Germany

• 19:00 Federal Open Market Committee will release the minutes from its January 29-30, 2019 policy meeting in Washington

Currency Summaries

EUR/USD: The euro strengthened against dollar on Tuesday, as investors shifted their focus from progress in U.S.-China trade talks to an economic slowdown in the Eurozone. The single currency was buoyed on Monday as expectations grew for an easing of the U.S.-China trade conflict. But euro zone bond yields, notably those of German bunds, fell amid the cloudy European economic outlook, and that weighed on the euro. When European Central Bank policymakers meet on March 7, they are expected to slash growth and inflation projections as the euro zone suffers its worst slowdown in half a decade. The euro was up 0.30 percent at $1.1341. Immediate resistance can be seen at 1.1363 (21 DMA), an upside break can trigger rise towards 1.1398 (50 DMA).On the downside, immediate support is seen at 1.1300 (Psychological level), a break below could take the pair towards 1.1239 (Feb 15th low)

GBP/USD: The British pound rose sharply against greenback on Tuesday, as a weaker dollar and hopes that Prime Minister Theresa May will make progress in seeking changes to her Brexit deal with the European Union boosted British pound. After edging higher for much of the day, the pound then jumped one percent versus the dollar by 2040 GMT to hit its strongest since Feb. 5, at $1.3063. The pound was headed for its biggest one-day gain since January. Immediate resistance can be seen at 1.3093 (38.2% retracement level), an upside break can trigger rise towards 1.3196 (23.6% retracement level).On the downside, immediate support is seen at 1.3003 (200 DMA), a break below could take the pair towards 1.2878 (100 DMA).

USD/CAD: The Canadian dollar rallied to its highest level in nearly a week against a broadly weaker greenback on Tuesday, as oil prices rose and investors bet on a breakthrough in trade talks between the United States and China. Optimism that a new round of talks between China and the United States would help resolve their trade conflict triggered selling of the safe-haven U.S. dollar, which fell against a basket of major currencies. At (2030 GMT), the Canadian dollar was trading 0.2 percent higher at 1.3210 to the greenback. The currency traded in a range of 1.3205 to 1.3281. Immediate resistance can be seen at 1.3239 (21 DMA), an upside break can trigger rise towards 1.3274 (61.8% retracement level).On the downside, immediate support is seen at 1.3193 (38.2% retracement level), a break below could take the pair towards 1.3142 (23.6% retracement level).

USD/JPY: The dollar edged lower against the Japanese yen on Tuesday, as traders dumped greenback holdings on optimism that a fresh round of talks between China and the United States would help resolve their trade conflict. The dollar index hit a near-two-month peak on Friday after last week's negotiations in Beijing failed to result in a deal, although officials from both sides said the talks had produced progress on contentious issues. The dollar was 0.04 lower versus the Japanese yen at 110.63. Strong resistance can be seen at 110.89 (38.2% retracement level), an upside break can trigger rise towards 111.12 (Feb 14th high).On the downside, immediate support is seen at 110.42 (50% retracement level), a break below could take the pair towards 109.92 (61.8% retracement level). 

Equities Recap

European shares dipped on Tuesday as a disappointing update from HSBC hit the heavyweight banking sector and a rally fuelled by optimism about a possible Sino-U.S. trade deal ran out of steam.

The UK's benchmark FTSE 100 closed down by 0.58 percent, FTSEurofirst 300 ended the day down by 0.20 percent, Germany's Dax ended up by 0.3 percent, and France’s CAC finished the down by 0.16 percent.

U.S. stocks gained ground on Tuesday as upbeat results from Walmart boosted investor sentiment and high-level U.S.-China trade talks resumed in Washington.

Dow Jones closed up by 0.03 percent, S&P 500 ended up 0.16 percent, Nasdaq finished the day up by 0.18 percent.

Treasuries Recap

Treasury yields were lower in Tuesday afternoon trade ahead of the release on Wednesday of minutes from the Federal Reserve's January policy-setting meeting and as trade talks between the United States and China neared their March 1 deadline.

Two-year yields, a proxy for market expectations for rate hikes, were 1.8 basis points lower, at 2.502 percent, suggesting investors expect the minutes to reaffirm a slower pace of rate hikes.

Commodities Recap

Oil prices were mixed on Tuesday as concerns about global crude oil demand and uncertainty over the latest round of U.S.-China trade talks countered investor optimism around tightening supplies.

Brent crude slipped 5 cents to settle at $66.45 a barrel, hovering below its 2019 high of $66.83 reached on Monday. U.S. crude  was up 50 cents to $56.09 a barrel, its highest since November 2018.

Gold prices surged to a near 10-month high driven by concerns over slowing global growth as dovish signals from Japan and Europe's central banks followed weak data from the United States and China.

Spot gold added 0.9 percent to $1,338.62 an ounce. U.S. gold futures gained 1.54 percent to $1,342.40 an ounce.
 

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March 25 14:30 UTC Released

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