Market Roundup
- Trump administration is not considering a carbon tax -White House official - Reuters
- Japan Feb exports +11.3 pct year/year - MOF (Reuters poll: +10.6 pct) - Reuters
- Japan Feb imports +1.2 pct year/year - MOF (poll: +0.6 pct) - Reuters
- Japan Feb trade balance +813.4 bln yen - MOF (poll: +822.0 bln yen) - Reuters
- Japan Feb exports to US. +0.4 pct year/year - MOF - Reuters
- Japan trade surplus with US. at 611.3 bln yen in Feb – MOF - Reuters
- Japan Feb exports to China +28.2 pct year/year – MOF - Reuters
- Japan Feb exports to Asia +20.9 pct year/year – MOF - Reuters
- South Korea Finmin says current FX levels not a problem if volatility limited – Reuters
- North Korea may have launched several missiles Wednesday - Kyodo – Reuters
- Japan chief Government spokesman says hasn't confirmed North Korea launched missiles toward Japan
- U.S. military detected "a failed North Korean missile launch attempt" in vicinity of Kalma: US Pacific command spokesman
- POLL-Asia firms' confidence hits near 2-year high on U.S., China pick-up-Thomson Reuters/INSEAD – Reuters
- PBOC fixes USD/CNY mid-pt at 6.8889 vs 6.9071 previous
Economic Data Ahead
- (0300 ET/0700 GMT) Norway Labour Force Survey % Jan 4.40 last
- (0400 ET/0900 GMT) Eurozone Net Investment Flow,EUR bln EU Jan 121.90 last
- (0400 ET/0900 GMT) Eurozone Current Account SA, EUR bln EU Jan 31.00 last
- (0400 ET/0900 GMT) Eurozone Current Account NSA,EUR bln EU Jan 47.00 last
Key Events Ahead
- (0845 ET/1245 GMT) ECB non-monetary policy committee meeting
- (0530 ET/0930 GMT) PORTUGAL auction
- (0630 ET/1030 GMT) GERMANY 10Y 3.000B 0.250% 15/02/27 TAP
- (0630 ET/1030 GMT) UK 30Y 2.000B 1.500% 22/07/47 TAP
FX Beat
DXY: The dollar fell to a near four-month low against the yen as a bout of investor risk aversion boosted safe-haven assets. The greenback against a basket of currencies traded up at 99.79, having hit a low of 99.66 in the previous session, its lowest since Feb. 6. FxWirePro's Hourly Dollar Strength Index stood at -84.81 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro edged down after rising above the 1.0800 handle for the first time in six weeks in the previous session as centrist French presidential candidate Emmanuel Macron's performance in a debate fuelled expectations he would win. The European currency traded 0.1 percent lower at 1.0794, having touched a high of 1.0819 on Tuesday, its highest since Feb. 2. FxWirePro's Hourly Euro Strength Index stood at 15.41 (Neutral) by 0400 GMT. Investors now await Eurozone's current account figures, ahead of the U.S. housing price index and existing home sales numbers. Immediate resistance is located at 1.0828 (Feb 2 High), a break above targets 1.0873 (Dec 8 High). On the downside, support is seen at 1.0757 (5-DMA), a break below could drag it near 1.0694 (38.2% retrace of 1.0525 and 1.0819).
USD/JPY: The yen rallied, extending gains for the seventh consecutive session, after data released earlier showed Japan’s trade balance swung back into surplus in February. Japan's exports rose at an annualized 11.3 percent, while imports surged 1.2 percent. Moreover, worries that President Donald Trump will struggle to deliver promised tax cuts triggered a fresh bout of risk aversion, which boosted the yen's safe-haven appeal. The major traded lower at 111.68, having hit a low of 111.42 earlier, its lowest since Nov. 26. FxWirePro's Hourly Yen Strength Index stood at 63.65 (Bullish) by 0400 GMT. Investors’ will continue to digest upbeat Japanese trade figures, ahead of U.S. housing price index and existing home sales numbers. Immediate resistance is located at 112.00, a break above targets 113.30 (78.6% retracement of 115.50 and 111.42). On the downside, support is seen at 111.42 (Session Low), a break below could take it near 111.00.
GBP/USD: Sterling steadied after rising to a near four-week high in the previous session as better-than-expected British CPI data underpinned the sentiment around the pound. Moreover, the economy's rapidly accelerating inflation also strengthened expectations that the Bank of England will raise interest rates from their record lows. Sterling trades flat at 1.2475, having hit a high of 1.2494 the day before, its highest since Feb. 24. FxWirePro's Hourly Sterling Strength Index stood at 61.78 (Bullish) by 0400 GMT. Investors’ focus will remain on the U.S. economic data, amid a lack of macro fundamentals from the UK docket. Immediate resistance is located at 1.2500, a break above could take it near 1.2548 (Feb. 14 High)). On the downside, support is seen at 1.2450, a break below targets 1.2400. Against the euro, the pound traded 0.1 percent up at 86.55 pence, having hit a high of 86.49 the prior day, its highest since Mar 8.
AUD/USD: The Australian dollar slumped to a 1-week low as weakness in copper and other commodity prices undermined the bid tone around the major. However, the downside was limited as the U.S. dollar was heavily offered against the British pound and the Euro on Tuesday. The Aussie trades 0.3 percent down at 0.7668, having hit a low of 0.7650 earlier in the session, it’s lowest since Mar. 15. FxWirePro's Hourly Aussie Strength Index stood at -72.73 (Bearish) by 0500 GMT. Investors will continue to track sentiments around the commodity space, ahead of the U.S. economic data for further momentum on the major. Immediate support is seen at 0.7650 (38.2% retrace of 0.7491 and 0.7749), a break below targets 0.7632 (21-DMA). On the upside, resistance is located at 0.7778 (Nov 8 High), a break above could take it over 0.7800.
NZD/USD: The New Zealand dollar eased after retreating from a three-week high as a fresh bout of risk aversion hit Asian equities and sent investors towards safe-haven assets. Moreover, lower commodity prices, especially oil and copper prices continued to dampen the bid tone around the major. The Kiwi trades 0.1 percent down at 0.7036, having touched a peak of 0.7089 the day before, it’s strongest since Mar. 2. FxWirePro's Hourly Kiwi Strength Index was at 42.72 (Neutral) by 0500 GMT. Investors’ will continue to track board based market sentiment, ahead of U.S. macro fundamental drivers. Immediate resistance is located at 0.7066, a break above could take it near 0.7100. On the downside, support is seen at 0.7012 (38.2% retrace of 0.6890 and 0.7089), a break below could drag it lower 0.7000.
Equities Recap
Asian shares slumped as growing concerns about Donald Trump's economic growth plans sent investors’ towards safe-haven assets such as gold and government bonds.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.3 percent in early trade.
Tokyo's Nikkei fell 1.95 percent to 19,079.16 points, Australia's S&P/ASX 200 index eased 1.58 percent to 5,683.40 points and South Korea's KOSPI was trading 0.57 percent down at 2,165.46 points.
Shanghai composite index edged down 0.7 percent to 3,238.14 points, while CSI300 index was trading 0.65 percent lower at 3,443.48 points.
Hong Kong’s Hang Seng was trading 1.39 percent lower at 24,249.87 points. Taiwan shares shed 0.5 percent at 9,922.66 points.
Commodities Recap
Crude oil prices declined, extending previous session losses, as increasing crude stocks in the United States added to an ongoing global fuel supply overhang. International benchmark Brent crude was trading flat at $50.83 per barrel by 0355 GMT, having hit a peak of $52.62 on Thursday, its highest since Mar. 10. U.S. West Texas Intermediate crude fell 0.1 percent to $48.08 a barrel, after rising to a high of $52.62 last week, its strongest since Mar. 10.
Gold prices rose, hovering towards a near 3-week high touched the session before, as the dollar weakened and equities declined on doubts over U.S. President Donald Trump's economic plans. Spot gold edged up 0.06 percent at $1,245.02 per ounce by 0402 GMT, after rising as high as $1,247.42 on Tuesday, its strongest since March 2. U.S. gold futures were down 0.1 percent at $1,245.60.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.417 percent lower by 0.016 bps, while 5-year yield was 0.014 bps down at 1.948 percent.
The Australian bonds jumped mid-week, tracking firmness in the U.S. counterparts amid a session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note slumped 6 basis points to 2.76 percent, the yield on 15-year note nose-dived 6-1/2 basis points to 3.14 percent and the yield on short-term 2-year traded 3 basis points lower at 1.78 percent.
The New Zealand bonds closed tad higher as investors largely shrugged-off the sharp rebound in global dairy prices at the overnight GlobalDairyTrade price auction. The yield on the benchmark 10-year bond closed flat at 3.25 percent, the yield on 7-year note slipped nearly 1 basis point to 2.82 percent while the yield on short-term 2-year note traded 1/2 basis points higher at 2.12 percent.
The Canadian government bond prices rose across the yield curve, with the 2-year up half a Canadian cent to yield 0.79 percent and the 10-year rising 21.5 Canadian cents to yield 1.702 percent.
