Market Roundup
- Oil falls as coronavirus spreads beyond China
- Gold near seven-year peak amid persistent virus fears
Economic Data Ahead
- (0400 ET/0900 GMT) EZ Markit Manufacturing PMI (Feb) PREL
- (0400 ET/0900 GMT) EZ Markit Services PMI (Feb) PREL
- (0400 ET/0900 GMT) EZ Markit PMI Composite (Feb) PREL
- (0430 ET/0930 GMT) UK Markit Manufacturing PMI (Feb) PREL
- (0430 ET/0930 GMT) UK Public Sector Net Borrowing (Jan)
- (0430 ET/0930 GMT) UK Markit Services PMI (Feb) PREL
- (0500 ET/1000 GMT) EZ Consumer Price Index (YoY) (Jan)
- (0500 ET/1000 GMT) EZ Consumer Price Index (EU Norm) (MoM) (Jan)
- (0500 ET/1000 GMT) EZ Consumer Price Index (MoM) (Jan)
- (0500 ET/1000 GMT) EZ Consumer Price Index (EU Norm) (YoY) (Jan)
- (0500 ET/1000 GMT) EZ Consumer Price Index (MoM) (Jan)
- (0500 ET/1000 GMT) EZ Consumer Price Index - Core (YoY) (Jan)
- (0500 ET/1000 GMT) EZ Consumer Price Index - Core (MoM) (Jan)
- (0500 ET/1000 GMT) EZ Consumer Price Index (YoY) (Jan)
Key Events Ahead
- (1200 ET/1700 GMT) ECB's Lane speech
FX Beat
DXY: The dollar index held firm near a 3-year peak after economic data on Thursday showed factory activity in the U.S. mid-Atlantic region expanded more than expected in February, while the number of Americans filing for unemployment benefits rose modestly last week. The greenback against a basket of currencies traded flat at 99.83, having touched a high of 99.91 the day before, its highest since April 21, 2017.
EUR/USD: The euro consolidated near a 3-year low recorded in the previous session, amid concern about a eurozone economic slowdown and damage to growth from China’s coronavirus. The European currency traded 0.1 percent down at 1.0792, having touched a low of 1.0777 on Thursday, its lowest since May 2017. Investors’ attention will remain on a series of data from the Eurozone economies, EZ Markit prelim PMI figures, consumer price index and ECB Lane's speech, ahead of the U.S. Markit PMI's, existing home sales and Fed official's speech. Immediate resistance is located at 1.0810 (5-DMA), a break above targets 1.0853 (10-DMA). On the downside, support is seen at 1.0767, a break below could drag it below 1.0743.
USD/JPY: The dollar declined from a 9-1/2 month peak hit in the prior session as fears over the creeping spread of the coronavirus sent investors seeking safety into safe-haven assets. Reports released late Thursday showed increased infections in Beijing and as the virus spread in South Korea and Japan. The major was trading 0.1 percent down at 111.95, having hit a high of 112.22 on Thursday, its highest since April 25 2019. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Markit PMI's, existing home sales and Fed official's speech. Immediate resistance is located at 112.40, a break above targets 112.66. On the downside, support is seen at 111.68, a break below could take it near at 111.42.
GBP/USD: Sterling nudged higher, retreating from a near 3-month low, as yesterday's data showing a rebound in UK retail sales eased concerns of interest rate cuts by the Bank of England this year. UK retail sales rose 0.9 percent on the month in January on a seasonally adjusted basis, after a 0.5 percent fall in December, the biggest rise since March. However, the upside appears limited amid concerns that the European Union and Britain appear to be hardening their stance before talks begin next month to chalk out trading arrangements once the post-Brexit transition period ends. The major traded 0.1 percent up at 1.2894, having hit a low of 1.2848 on Thursday, it’s lowest since Nov. 27. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2926, a break above could take it near 1.2959 (10-DMA). On the downside, support is seen at 1.2849, a break below targets 1.2809. Against the euro, the pound was trading flat at 83.70 pence, having hit a low of 84.15 on Thursday, it’s lowest since Feb.12.
AUD/USD: The Australian dollar slumped to a near 11-year low, weighed down by fears of coronavirus outbreak, downbeat Australian jobs report, PBoC’s rate cut kept and the broad U.S. dollar strength. On Thursday, Beijing cut the benchmark lending rate and is likely to roll out more measures to support the Chinese economy. The Aussie trades 0.3 percent down at 0.6597, having hit a low of 0.6591 earlier, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6585, a break below targets 0.6568. On the upside, resistance is located at 0.6628 (23.6% retracement of 0.6750 and 0.6591), a break above could take it near 0.6651 (38.2% retracement).
NZD/USD: The New Zealand dollar plunged to a 4-month low, amid the weaker Aussie and as the outlook for the NZ economy remains suspect amid the coronavirus outbreak. The Kiwi trades 0.4 percent down at 0.6307, having touched a low of 0.6306 earlier, its lowest level since Oct. 17. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6374 (38.2% retracement of 0.6487 and 0.6306), a break above could take it near 0.6395 (50% retracement). On the downside, support is seen at 0.6282, a break below could drag it below 0.6255.
Equities Recap
Asian shares declined as fears over the creeping spread of the coronavirus sent investors seeking shelter in safe-haven assets.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.8 percent.
Tokyo's Nikkei fell 0.4 percent to 23,386.74 points, Australia's S&P/ASX 200 index eased 0.3 percent to 7,139.00 points and South Korea's KOSPI declined 1.5 percent to 2,162.84 points.
Shanghai composite index rose 0.3 percent to 3,038.19 points, while CSI 300 index traded 0.1 percent up at 4,147.95 points.
Hong Kong’s Hang Seng traded 0.9 percent lower at 27,352.82 points. Taiwan shares shed 0.3 percent to 11,686.35 points
Commodities Recap
Crude oil prices declined amid concerns over fuel demand as the coronavirus epidemic spread further beyond China. International benchmark Brent crude was trading 0.4 percent lower at $58.82 per barrel by 0530 GMT, having hit a high of $59.98 on Thursday, its highest since Jan. 29. U.S. West Texas Intermediate was trading 0.4 percent down at $53.48 a barrel, after rising as high as $54.45 on Thursday, its highest since Jan. 24.
Gold prices surged to a near 7-year high as nervous investors opted for safe haven assets amid fears about the economic damage from China’s coronavirus epidemic. Spot gold was trading 0.5 percent higher at $1,628.33 per ounce by 0539 GMT, having touched a high of $1628.80 earlier, its highest since Feb. 2013. U.S. gold futures were up 0.1 percent to $1,622.60.
Treasuries Recap
The 10-year U.S. Treasuries yield dropped 3.5 basis points to 1.490 percent in Asian trade to the lowest price since September.
The Japanese government bond prices gained, with the 40-year bond yield hitting a five-month low. The benchmark 10-year JGB futures advanced 0.26 point to 152.90. The 10-year JGB yield dropped 2 basis points to minus 0.065 percent. The 20-year JGB yield fell 1.5 basis points to a three-week low of 0.220 percent, while the 30-year JGB yield fell 1.5 basis points to 0.340 percent. The yield on 40-year JGBs fell 1.5 basis points to 0.360 percent, a level last seen in mid-September. At the shorter end of the market, the two-year JGB yield fell 1 basis point to minus 0.165 percent. The five-year yield fell 2 basis points to minus 0.165 percent.
