Market Roundup
- Japan FinMin Aso – Wants to debate rules for free-fair trade with US
- Japan Jan nationwide core CPI +0.1% y/y, Tokyo Feb core -0.3%, unch and -0.2% forecast, nationwide core up for first time on y/y basis since December ‘15.
- Japan Jan household spending +0.5% m/m, -1.2% y/y, +0.3% and -0.4% forecast, weak, contrasts with Jan retails 1.0% y/y gain.
- Japan Jan unemployment 3.0%, jobs-applicants ratio 1.43, 3.0% and 1.44 forecast, unemployment off notch from 3.1% in December.
- Japan Feb services PMI off to 51.3, Jan 51.9 but employment growth best in 45 months.
- BoJ reduces buying of 25-40 year JGBs by Y20 billion to Y100 billion – Reuters.
- Foreigners lead short-term bond market as BoJ steps back – Nikkei.
- China parliament to signal reform over stimulus to defuse debt bomb –Reuters.
- China Feb Caixin services PMI 52.6, composite 52.6, Jan 53.1, 52.2, services expansion slowest in four months.
- Cleveland Fed Mester – Fed hitting both employment and inflation goals, wants rate hike before shrinking balance sheet – Reuters.
- Foreign CB US debt holdings -$5.660 billion to $3.175 billion March 1 week, Treasury holdings -$4.087 billion to $2.846 trillion, agencies -$1.626 billion to $266.671 billion.
- NY Fed – Swaps with foreign CBs $1.132 billion Mar 1 week, ECB $930mln, BoJ rest.
- Lipper – Investors pour $7 billion into US-based stock funds latest week, fifth week in a row.
- BCG – Banks paid $321 billion in fines since financial crisis – Reuters.
- UK lawmakers say May’s industrial plan falls short, risks mistakes – Reuters.
- ECB Lautschlaeger sees no Frexit after Brexit, or stocks crash – Reuters.
- Australia Feb AIG PSI off 5.5 points to 49.0, below 50.
- Australia Feb VFACTS new vehicle sales -7.7% y/y, one less selling day, SUVs still in demand.
- New Zealand Feb job adverts +0.4% m/m, +18.5% y/y.
- New Zealand Feb ANZ commodity price index +2.0% m/m, +20.9% y/y, Jan -0.1%, +19.1%.
- New Zealand Q4 residential bldg work done +1.1% q/q, non-residential +3%, total +1.9%.
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Jan retail sales, +0.3% m/m forecast; last unch.
- (0200 ET/0700 GMT) Norway Feb unemployment, 3.1% forecast; last 3.2%.
- (0230 ET/0730 GMT) Sweden Feb PMI – services; last 61.1.
- (0315 ET/0815 GMT) Spain Feb PMI – services, 55.5 forecast; last 54.2.
- (0330 ET/0830 GMT) Sweden Jan industrial production, +2.0% m/m forecast; last -1.8% m/m, -0.9% y/y.
- (0330 ET/0830 GMT) Sweden Jan new manufacturing orders; last +4.7% y/y.
- (0345 ET/0845 GMT) Italy Feb PMI – services, 52.9 forecast; last 52.4.
- (0350 ET/0850 GMT) France Feb PMI – services, 56.7 forecast; flash 56.7.
- (0350 ET/0850 GMT) France Feb PMI – composite, 56.2 forecast; flash 56.2.
- (0355 ET/0855 GMT) Germany Feb PMI – services, 54.4 forecast; flash 54.4.
- (0355 ET/0855 GMT) Germany Feb PMI – composite, 56.1 forecast; flash 56.1.
- (0400 ET/0900 GMT) Eurozone Feb PMI – services, 55.6 forecast; flash 55.6.
- (0400 ET/0900 GMT) Eurozone Feb PMI – composite, 56.0 forecast; flash 56.0.
- (0400 ET/0900 GMT) Italy Q4 GDP – final, +0.2% q/q, +1.1% y/y forecast; last +0.2%, +1.1%.
- (0430 ET/0930 GMT) Great Britain Feb PMI – services, 54.1 forecast; last 54.5.
- (0500 ET/1000 GMT) Eurozone Jan retail sales, +0.4% m/m, +1.6% y/y forecast; last -0.3%, +1.1%.
- (0945 ET/1445 GMT) United States Feb Markit PMI services – final; flash 53.9.
- (0945 ET/1445 GMT) United States Feb Markit PMI composite – final; flash 54.3.
- (1000 ET/1500 GMT) United States Feb ISM non-Mfg PMI, 56.5 forecast; last 56.5.
Key Events Ahead
- (0455 ET/0955 GMT) BoE Stewart at London BBA event.
- (0600 ET/1100 GMT) UK DMO GBP0.5/0.5/1.0 bln 1/3/6-month treasury bill auctions.
- (1015 ET/1515 GMT) Chicago Fed Evans, Richmond Fed Lacker in NY USMP Forum panel discussion.
- (1130 ET/1630 GMT) BoC DepGov Wilkins in Yale Univerity Law School panel discussion.
- (1200 ET/1700 GMT) FOMC ViceChair Fischer speaks at NY US Monetary Policy Forum luncheon.
- (1215 ET/1715 GMT) Fed Gov Powell speaks at New Haven conference, BoE Hauser to attend.
- (1300 ET/1800 GMT) FOMC Chair Yellen speaks at Executives Club of Chicago.
- (1330 ET/1830 GMT) Dallas Fed Kaplan, BoJ DepGov Nakaso in NY USMP Forum panel discussion.
- (1445 ET/1945 GMT) BoE Hauser at New Haven, CT Blockchain conference.
FX Beat
DXY: The dollar eased against the euro and yen following a fall in the U.S. Treasury yields across the curve. The greenback against a basket of currencies traded 0.1 percent down at 102.05, having hit a high of 102.26 the prior day, it’s strongest since Jan. 11. FxWirePro's Hourly Dollar Strength Index stood at 100.80 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro steadied, halting its 3-day losing streak as the greenback eased following a drop in the U.S treasury yields. However, the upside in the major remains capped as Fed rate March rate hike expectations continues to support the dollar. The European currency traded 0.1 percent up at 1.0518, having hit a low of 1.0494 the prior day, it’s lowest since Feb. 22 but was down 0.5 percent for the week. FxWirePro's Hourly Euro Strength Index stood at 36.48 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone's retail sales and Markit service PMI, ahead of Fed Chair Yellen and Vice Chair Fischer speeches. Immediate resistance is located at 1.0555 (5-DMA), a break above targets 1.0573 (23.6 % retracement of 1.0828 and 1.0493). On the downside, support is seen at 1.0494 (Previous Session Low), a break below could drag it near 1.0450.
USD/JPY: The dollar edged down as the U.S. Treasury yields eased across the curve, but it stayed near 2-week peak on growing expectations the Federal Reserve could raise interest rates as early as at its meeting this month. The yen recovered some ground as mixed Japanese inflation data and downbeat Chinese service PMI figures triggered a fresh bout of risk-off sentiment, which increased demand for safe-haven assets. The major trades 0.2 percent lower at 114.09, having hit high of 114.59 in the previous session, its highest since Feb. 15 and was up more than 2 percent for the week. FxWirePro's Hourly Yen Strength Index stood at -141.43 (Highly Bearish) by 0400 GMT. Investors’ will continue to track price action in the U.S. Treasury yields, ahead of the U.S. Markit service PMI figures and speeches from Fed officials Evans, Powell, Yellen and Fischer. Immediate resistance is located at 114.54 (trendline), a break above targets 115.00. On the downside, support is seen at 114.00 (Psychological Level), a break below could take it near 113.68 (Previous Session Low).
GBP/USD: Sterling nudged up after declining in the previous five sessions, as a minor correction seen in U.S. 2-year treasury yields dragged the dollar lower. On Thursday, the major slumped to a 6-week low as uncertainty over the prospects of British economy hampered market sentiment. Sterling trades flat at 1.2267, having hit a low of 1.2242 the prior session, its weakest since Jan. 17. FxWirePro's Hourly Sterling Strength Index stood at -19.40 (Neutral) by 0400 GMT. Investors’ attention will remain on the UK Markit Service PMI, ahead of Fed officials' speeches. Immediate resistance is located at 1.2300, a break above could take it near 1.2319 (23.6 % retracement of 1.2569 and 1.2242). On the downside, support is seen at 1.2242 (Previous Session Low), a break below targets 1.2200. Against the euro, the pound trades 0.1 percent lower at 85.74 pence, having hit a 2-week low of 85.90 the day before.
AUD/USD: The Australian dollar tumbled, extending previous session losses, as downbeat Chinese services PMI data and weaker commodity prices weighed on the Aussie. The selling pressure around the major intensified after better-than-expected U.S jobless claims data boosted expectations the U.S. Federal Reserve will hike interest rates as early as this month. The pair trades 0.1 percent down at 0.7558, having touched an early low of 0.7542, it’s lowest since Jan. 31 and is down 1.4 percent this week so far. FxWirePro's Hourly Aussie Strength Index stood at -73.83 (Bearish) by 0500 GMT. Markets will continue to track overall market sentiment, ahead of Fed Chair Janet Yellen and Vice Chair Stanley Fischer speeches. Immediate support is seen at 0.7542 (Session Low), a break below could drag it near 0.7500. On the upside, resistance is located at 0.7589 (23.6 % retracement of 0.7740 and 0.7542), a break above targets 0.7600.
NZD/USD: The New Zealand dollar declined, extending losses for the third straight day, as divergent monetary policy outlooks between the Fed and RBNZ continued to hurt investor sentiment. The Kiwi trades 0.4 percent lower at 0.7033, having hit a low of 0.7030 earlier in the day, it’s lowest since Jan. 11. FxWirePro's Hourly Kiwi Strength Index was at -138.49 (Highly Bearish) by 0500 GMT. Investors’ will continue to track board based market sentiment, ahead of the U.S. macroeconomic fundamental drivers and Fed speeches for further momentum in the major. Immediate resistance is located at 0.7081 (23.6 % retracement of 0.7246 and 0.7030), a break above could take it over 0.7100. On the downside, support is seen at 0.7000, a break below could drag it till 0.6961 (Jan 11 Low).
Equities Recap
Asian shares declined as downbeat Chinese Caixin Service PMI figures triggered a fresh bout of risk aversion, while the dollar held on to broad gains on rising expectations of an imminent U.S. interest rate hike.
MSCI's broadest index of Asia-Pacific shares outside Japan down 0.9 percent.
Tokyo's Nikkei declined 0.6 percent to 19,447.79 points, Australia's S&P/ASX 200 index fell 0.81 percent to 5,729.90 points and South Korea's KOSPI was trading 1.22 percent down at 2,077.03 points.
Shanghai composite index eased 0.57 percent to 3,211.59 points, while CSI300 index was trading 0.49 percent down at 3,418.30 points.
Hong Kong’s Hang Seng was trading 0.62 percent lower at 23,579.85 points. Taiwan shares shed 0.5 percent at 9,648.21 points.
Commodities Recap
Crude oil prices steadied after declining to a 3-week low in the previous session, as the dollar eased from multi-week highs. International benchmark Brent crude was trading 0.15 percent up at $55.11 per barrel by 0406 GMT, having hit a low of $55.01 the prior day, its lowest since Feb. 8. U.S. West Texas Intermediate crude gained 0.25 percent at $52.65 a barrel, after tumbling to a trough of $52.52 on Thursday, its weakest since Feb. 9.
Gold prices declined, having shed more than one percent in the previous session and were on track for its first fall in five weeks and weakest level since December as expectations of U.S. Federal Reserve rate hike in March boosted the greenback. Spot gold was 0.1 percent down at $1,233.16 per ounce at 0411 GMT, having dropped more than 1 percent to hit an over 1-week low of $1,230.74 on Thursday. U.S. gold futures rose 0.2 percent to $1,234.90.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.4834 percent lower by 0.006 bps, while 5-year yield was down by 0.008 bps at 2.0207 percent.
The Japanese government bonds traded narrowly mixed, tracking disparate economic data that confused market movements. The benchmark 10-year bond yield fell 1/2 basis point to 0.08 percent, the long-term 30-year bond yields trade flat at to 0.87 percent while the yield on the short-term 2-year note traded 1 basis point higher at -0.27 percent.
The Australian bonds slumped on the last day of the week as investors remain cautious ahead of the Reserve Bank of Australia’s monetary policy decision scheduled to be held on March 7. The yield on the benchmark 10-year Treasury note jumped over 2-1/2 basis points to 2.82 percent, the yield on 15-year note also surged nearly 3 basis points to 3.25 percent while the yield on short-term 2-year traded nearly 2 basis points higher at 1.84 percent.
The New Zealand government bonds traded a tad lower as investors cashed in profits on the last day of the week after witnessing a long rally. The yield on the benchmark 10-year bond rose 1/2 basis point to 3.33 percent at the time of closing, the yield on 7-year note also pushed higher by nearly 1/2 basis point to 2.89 percent and the yield on mid-term 5-year note traded 1/2 basis point higher at 2.61 percent.
The Canadian government bond prices were lower across the yield curve, with the 2-year down 2.5 Canadian cents to yield 0.775 percent and the 10-year falling 11 Canadian cents to yield 1.701 percent.
