Market Roundup
- Jan-Feb industrial output +7.2%, Rtrs f’cast +6.1%, last +6.2%
- China Jan-Feb retail sales +9.7% y/y, Rtrs f’cast +9.8%, last 9.4%
- China Jan-Feb fixed-asset investment +7.9% y/y, Rtrs ‘fcast +7.0%, last 7.2%
- Trump eyes tariffs on up to $60 bln Chinese goods; tech, telecoms, apparel
- Tokyo farewells "trustworthy" Tillerson, Seoul awaits seasoned Pompeo
- Pennsylvania vote down to wire in ominous sign for U.S. Republicans
- G20 financial leaders to speak against unfair trade practices -draft communique
- Japan PM Abe denies involvement by him, wife in discount land sale
- Japan Jan core machinery orders +8.2% m/m, +2.9% y/y, +5.6% and +0.6% eyed
- Britain and Russia brace for showdown as deadline expires for nerve attack explanation
Economic Data Ahead
- (0300 ET/0700 GMT) Germany Feb CPI Final, 0.5% m/m, 1.4% y/y eyed; 0.5%, 1.4% last
- (0300 ET/0700 GMT) Germany Feb HICP Final m/m, 0.5% eyed; 0.5% last
- (0400 ET/0800 GMT) Spain Jan Retail Sales y/y, 1.2% last
Key Events Ahead
- (0330 ET/0730 GMT) ECB’s Benoit Coeure participates in an event with Fintech companies organised by FinLeap in Berlin
- (0400 ET/0800 GMT) Address by ECB’s Mario Draghi at "The ECB and Its Watchers XIX" conference organised by the Institute for Monetary and Financial Stability in Frankfurt
- (0445 ET/0845 GMT) Speech by ECB Supervisor Ignazio Angeloni at annual conference "Tapering e final QE: gli effete sugli asset in gestione" organised by Itinerari Previdenziali in Rome
- (0445 ET/0845 GMT) ECB’s Peter Praet participates in Debate 1 "Assessment of Quantitative Easing and Challenges of Policy Normalization" at "The ECB and Its Watchers XIX" conference in Frankfurt
- (0600 ET/1045 GMT) ECB’s Vitor Constancio participates in Debate 2 "The Pursuit of Financial Stability and Tasks for Monetary, Regulatory and Macro-Prudential Policies" at "The ECB and Its Watchers XIX" conference in Frankfurt
- (1215 ET/1615 GMT) ECB’s Benoit Coeure participates in panel on 'Nullzinspolitik' at CDU-Wirtschaftsrat: Finanzmarktklausur in Berlin
FX Beat
DXY: The dollar index declined to a near 1-week low after U.S. President Donald Trump fired Tillerson and replaced his chief diplomat with loyalist CIA Director Mike Pompeo following a series of rifts over policy on North Korea, Russia and Iran. The greenback against a basket of currencies 0.1 percent down at 89.58, having touched a high of 90.36 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at -80.50 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro rose to a 6-day high as investors awaited European Central Bank Praet, Coeuré and Victor Constancio's speech for further clues on the central bank’s monetary policy outlook. The European currency traded 0.1 percent up at 1.2406, having touched a high of 1.2411, its highest since Mar. 8. FxWirePro's Hourly Euro Strength Index stood at 30.39 (Neutral) by 0400 GMT. Investors’ attention will remain on the Eurozone industrial production and employment change data, ahead of U.S. producer price index and retail sales. Immediate resistance is located at 1.2323 (5-DMA), a break above targets 1.2465 (Feb 14 High). On the downside, support is seen at 1.2290 (Previous Session Low), a break below could drag it lower 1.2221.
USD/JPY: The dollar eased against the yen following the sudden dismissal of U.S. Secretary of State Rex Tillerson after a series of rifts over policy on North Korea, Russia and Iran. The major was trading 0.1 percent down at 106.49, having hit a high of 107.29 on Tuesday, its highest since Feb. 28. FxWirePro's Hourly Yen Strength Index stood at -29.18 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. producer price index and retail sales. Immediate resistance is located at 107.20 (Mar 1), a break above targets 107.67 (Feb. 27). On the downside, support is seen at 105.89, a break below could take it lower 105.25.
GBP/USD: Sterling rallied to a 2-week peak after British Finance Minister Philip Hammond upgraded UK's growth forecasts and trimmed budget deficit expectations. The major traded 0.2 percent up at 1.3990, having hit a high of 1.3995 earlier, it’s highest since Feb. 27. FxWirePro's Hourly Sterling Strength Index stood at 89.35 (Slightly Bullish) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid a lack of data from the UK docket. Immediate resistance is located at 1.4010, a break above could take it near 1.4070. On the downside, support is seen at 1.3914 (21-DMA), a break below targets 1.3848 (10-DMA). Against the euro, the pound was trading 0.1 percent up at 88.69 pence, having hit a high of 88.47 pence on Monday, it’s highest since Mar 1.
AUD/USD: The Australian dollar rose, reversing most of its previous session losses, as upbeat economic news from China helped offset fresh fears of a global trade war. The Aussie trades 0.2 percent up at 0.7875, having hit a high of 0.7897 the day before; it’s highest since Feb. 21. FxWirePro's Hourly Aussie Strength Index stood at 3.42 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7837 (5-DMA), a break below targets 0.7776 (Mar 9 Low). On the upside, resistance is located at 0.7901 (Feb. 21 High), a break above could take it near 0.7988.
NZD/USD: The New Zealand dollar advanced, extending previous session gains, ahead of domestic gross domestic product data, which is expected to show the economy grew 0.7 percent in the December quarter, lifting the annual pace of expansion to a brisk 3.1 percent. The Kiwi trades 0.2 percent up at 0.7337, having touched a high of 0.7354 earlier, its highest level since Feb. 22. FxWirePro's Hourly Kiwi Strength Index was at -52.53 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7386 (Feb 21 High), a break above could take it near 0.7409 (Feb 19 High). On the downside, support is seen at 0.7288 (5-DMA), a break below could drag it below 0.7200.
Equities Recap
Asian shares retreated from a 1-1/2 month high, weighed down by losses in the technology sector, while the greenback eased after President Donald Trump fired his Secretary of State.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.7 percent.
Tokyo's Nikkei eased 1.1 percent to 21,729.03 points, Australia's S&P/ASX 200 index declined 0.6 percent to 5,936.30 points and South Korea's KOSPI plunged 0.4 percent to 2,485.07 points.
Shanghai composite index fell 0.6 percent to 3,290.72 points, while CSI300 index was trading 0.5 percent down at 4,070.02 points.
Hong Kong’s Hang Seng was trading 1.3 percent lower at 31,206.31 points. Taiwan shares shed 0.6 percent to 11,025.47 points.
Commodities Recap
Crude oil prices declined, extending losses for the third straight session, despite a report showing that U.S. crude inventories are not rising as much as expected. International benchmark Brent crude was trading 0.2 percent down at $64.57 per barrel by 0436 GMT, having hit a low of $63.41 on Thursday, its lowest since Mar. 2. U.S. West Texas Intermediate was trading 0.2 percent down at $60.73 a barrel, after falling as low as $59.99 on Thursday, its weakest since Feb. 15.
Gold prices rose on a weaker dollar following U.S. Secretary of State Rex Tillerson's sudden dismissal and after consumer price data pointed towards a path of gradual hikes in U.S. interest rates. Spot gold advanced 0.1 percent to $1,327.60 per ounce at 0438 GMT, having hit a high of $1,329.12 an ounce earlier, its highest since Mar. 7. U.S. gold futures for April delivery fell 0.1 percent to $1,325.60 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.831 percent lower by 0.016 bps, while 5-year yield was 0.019 bps down at 2.611 percent.
The Japanese government bonds remained flat after Bank of Japan (BoJ) Governor Haruhiko Kuroda voiced his opinion in favor of the central bank’s smooth exit from its ultra-loose monetary policy, but said it was too early to debate specifics with inflation still distant from its target. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note remained steady at 0.75 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.14 percent.
The Australian bonds rallied following firmness in the U.S. Treasuries as lower inflation data and news that President Donald Trump had ousted Secretary of State Rex Tillerson pushed investors towards safe-haven buying. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 6 basis points to 2.760 percent, the yield on the long-term 30-year note dipped 5 basis points to 3.349 percent and the yield on short-term 2-year down 3-1/2 basis points to 2.008 percent.
