Market Roundup
- CFTC IMM CTA data – Specs boost net long USD bets for third straight week, highest since late January, MXN shorts lowest since November 3, JPY and EUR shorts down too, 66.9k and 19.6k, AUD longs up, NZD shorts more than double.
- BoJ March 15-16 Policy Board meeting minutes – Will take time for inflation to get to 2% target, low wage hikes to impact, easy policy appropriate, BoJ Feb JGB purchase increase revealed yield curve control weaknesses - Reuters.
- Japanese manufacturers brace for possible US import tax, plan lower pay hikes this year – Reuters poll.
- Japan Feb corporate service price index +0.3% m/m, +0.8% y/y to 103.3.
- Toshiba’s Westinghouse may file bankruptcy Tuesday, seeks Kepco aid – Nikkei.
- PBOC Gov Zhou – Globalization a reality, not matter of choice, global reflation important, monetary policy not panacea, to open more to foreign investment – Reuters.
- Advisor Fan Gang – PBOC wants smooth transition to less reserves – Reuters.
- China Jan-Feb industrial profits +31.5% y/y, rise in prices of coal, steel and crude oil cited, liabilities +6.6%.
- Trump to unveil White House Office of American Innovation led by Jared Kushner aimed at federal bureaucracy overhaul using business ideas – W.Post.
- Merkel’s conservative CDU comes first in German Saarland state vote –Reuters.
- Buba Wuermeling – Next ECB policy moves are in flux – Reuters.
- ECB/BdF Villeroy warns against Le Pen’s Euro exit plans – Reuters.
- OPEC, non-OPEC committee recommends extending output cut by 6 months
- CFTC – Specs cut US crude oil net longs to lowest in ’17.
Economic Data Ahead
- (0330 ET/0730 GMT) Sweden Feb household lending; last +7.2% y/y.
- (0400 ET/0800 GMT) Germany Mar Ifo business climate index, 111.0 forecast; last 111.0.
- (0400 ET/0800 GMT) Germany Mar Ifo expectations index, 104.3 forecast; last 104.0.
- (0400 ET/0800 GMT) Germany Mar Ifo current conditions index, 118.3 forecast; last 118.4.
- (0500 ET/0900 GMT) Eurozone Feb money supply M3, +4.9% y/y forecast; last +4.9%.
- (0500 ET/0900 GMT) Eurozone Feb loans to households, +2.3% y/y forecast; last +2.2%.
- (0500 ET/0900 GMT) Eurozone Feb loans to non-financials; last +2.3% y/y.
- (1030 ET/1430 GMT) United States Mar Dallas Fed mfg business index; last 24.5.
Key Events Ahead
- N/A New Delhi Global Business Summit (till tomorrow).
- (0850 ET/1250 GMT) France E2.9-3.3/1.1-1.5/1.2-1.6 bln 3/6/12-month BTF note auctions.
- (0900 ET/1300 GMT) Chicago Fed Evans, ECB ChiefEcon Praet speak in Madrid.
- (1720 ET/2120 GMT) ECB Nouy, Lautenschlaeger speak at Frankfurt banking conference, presser.
FX Beat
DXY: The dollar slumped across the board as Presidents Trump's failure on healthcare reform raised doubts about his ability to push through tax cuts and fiscal spending to strengthen the economy. The greenback against a basket of currencies traded 0.5 percent down at 99.28, having hit a low of 99.25 earlier in the session, its lowest since Feb. 2. FxWirePro's Hourly Dollar Strength Index stood at 31.7 (Neutral) by 0530 GMT.
EUR/USD: The euro rallied to a near 4-month high as the greenback tumbled after Trumpcare bill failure to seek the House approval raised concerns over President Trump's ability to deliver on his campaign promises. Moreover, reports of German Chancellor Angela Merkel’s party victory in elections in the western state of Saarland also boosted the bid tone around the major. The European currency traded 0.5 percent higher at 1.0847, having touched a high of 1.0849 earlier, its highest since Dec. 8. FxWirePro's Euro Strength Index stood at 13.01 (Neutral) by 0400 GMT. Investors now await Eurozone's M3 money supply report, ahead of the Dallas Fed Manufacturing Business Index and Fed officials' speeches. Immediate resistance is located at 1.0873 (Dec 8 High), a break above targets 1.0920. On the downside, support is seen at 1.0785 (5-DMA), a break below could drag it near 1.0765 (23.6% retrace of 1.0525 and 1.0849).
USD/JPY: The dollar tumbled to a 4-month low as the U.S. Healthcare bill failure to clear the House vote raised worries over the Trump administration and its ability to introduce tax reforms and fiscal spending plans. Moreover, persistent risk-off sentiment amid easing Treasury yields and declining equities strengthened the Japanese yen’s safe-haven appeal. The major traded 0.8 percent down at 110.40, having hit a low of 110.25 earlier in session, its lowest since Nov. 18. FxWirePro's Yen Strength Index stood at 45.29 (Neutral) by 0400 GMT. Investors’ will continue to track price action in the U.S. Treasury yields, ahead of FOMC member Evan and Kaplan’s speeches. Immediate resistance is located at 111.36 (78.6% retracement of 115.50 and 110.25), a break above targets 111.80. On the downside, support is seen at 110.00, a break below could take it near 118.55 (Nov. 17 Low).
GBP/USD: Sterling rose to a fresh 1-month high as the dollar weakened after Trump’s withdrawal of the health care bill raised concerns about the chances of U.S. fiscal stimulus. The major trades 0.46 higher at 1.2530, having hit an early high of 1.2533, its highest since Feb. 24. FxWirePro's Sterling Strength Index stood at -6.93 (Neutral) by 0400 GMT. Investors’ focus will remain on UK PM Theresa May's meet with Scottish First Minister Nicola Sturgeon today and developments surrounding Brexit process, amid a lack of relevant data from the UK docket. Immediate resistance is located at 1.2548 (Feb. 14 High), a break above could take it near 1.2605 (Jan. 27 High). On the downside, support is seen at 1.2462 (5-DMA), a break below targets 1.2433 (23.6% retrace 1.2108 and 1.2533). Against the euro, the pound traded higher at 86.52 pence, having hit a high of 86.04 last week, its highest since Mar 3.
AUD/USD: The Australian dollar edged up, retreating from an over 1-week low touched in the previous session, as the greenback eased after Trump failed last week to get approval for his healthcare plan, which raised concerns over the future of his entire agenda. The Aussie trades 0.15 percent up at 0.7633, having hit a low of 0.7603 in the previous session, it’s lowest since Mar. 15. FxWirePro's Aussie Strength Index stood at -48.26 (Neutral) by 0530 GMT. Investors will continue to track broad based market sentiment, ahead of FOMC member Evan and Kaplan’s speeches. Immediate support is seen at 0.7600, a break below targets 0.7577 (Feb 2 Low). On the upside, resistance is located at 0.7656 (10-DMA), a break above could take it over 0.7668 (5-DMA)/ 0.7720.
NZD/USD: The New Zealand dollar gained, halting its 4-day losing streak as the U.S. dollar eased across the board following President Trump’s health care bill withdrawal after it failed to gain enough support to pass in Congress. The Kiwi trades 0.33 percent up at 0.7051, hovering towards a peak of 0.7090 touched last week, it’s strongest since Mar. 2. FxWirePro's Kiwi Strength Index was at -88.21 (Slightly Bearish) by 0530 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. macro fundamental drivers and Fed speeches. Immediate resistance is located at 0.7090, a break above could take it over 0.7100. On the downside, support is seen at 0.7004 (10-DMA)), a break below could drag it lower 0.6975.
Equities Recap
Asian shares eased as President Donald Trump's failure on healthcare reform triggered a fresh bout of risk aversion across the global markets.
MSCI's broadest index of Asia-Pacific shares outside Japan was broadly flat.
Tokyo's Nikkei eased 1.44 percent to 18,985.69 points, Australia's S&P/ASX 200 index fell 0.15 percent to 5,745.10 points and South Korea's KOSPI was trading 0.57 percent down at 2,156.58 points.
Shanghai composite index edged up 0.05 percent to 3,270.93 points, while CSI300 index was trading 0.15 percent lower at 3,484.21 points.
Hong Kong’s Hang Seng was trading 0.50 percent lower at 24,236.02 points. Taiwan shares shed 0.3 percent at 9,876.77 points.
Commodities Recap
Crude oil prices declined as rising drilling activity in the United Sates weighed on market sentiment, despite OPEC-led production cuts. International benchmark Brent crude was trading 0.5 percent down at $50.74 per barrel by 0401 GMT, having hit a low of $49.75 last week, its lowest since Nov. 30. U.S. West Texas Intermediate crude fell 0.62 percent to $47.82 a barrel, after tumbling as low as $47.08 on Wednesday, its weakest since Nov. 30.
Gold prices rose almost 1 percent to a near 1-month high as the dollar weakened after President Donald Trump failed to pass healthcare reform last week. Spot gold rose 0.9 percent to $1,256.55 per ounce by 0412 GMT, having hit a near one-month high of $1,257.94. U.S. gold futures were up 0.5 percent at $1,254.60.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.434 percent higher by 0.016 bps, while 5-year yield was 0.026 bps up at 1.968 percent.
The Australian bonds sharply rebounded on the first trading day of the week Monday as investors poured into safe-haven assets tracking firmness in U.S. Treasuries amid losses in riskier equities and oil. The yield on the benchmark 10-year Treasury note slumped 6-1/2 basis points to 2.70 percent, the yield on 15-year note plunged nearly 7 basis points to 3.10 percent and the yield on short-term 2-year traded 5 basis points lower at 1.73 percent.
The New Zealand bonds closed tad higher, slightly racing the U.S. counterparts amid a session that witnessed data of little economic significance. The yield on the benchmark 10-year bond fell 1 basis point to 3.19 percent, the yield on 7-year note also slid nearly 1 basis point to 2.80 percent while the yield on short-term 2-year note closed flat at 2.13 percent.
