Market Roundup
- Trump in 'no rush" for deal with North Korea's Kim on second day of summit
- US trade chief sees long-term China challenges, continued tariff threat
- Fed to stop shrinking portfolio this year, Powell says
- Theresa May gains two weeks' Brexit reprieve from British lawmakers
- UK consumer morale edges up from 5-year low as Brexit uncertainty persists
- China Feb factory activity shrinks to 3-year low, export orders worst in a decade
- China consumers squeezed in 2018 as income gains slow, living costs rise
- World powers call for calm as India and Pakistan trade fire in Kashmir
- Japan Jan Industrial Output Prelim MM SA, -3.7%, -2.5% f’cast, -0.1% prev
- Japan Jan Retail Sales YY, 0.6%, 1.1% f’cast, 1.3% prev
- Australia Q4 Capital Expenditure, 2.0%, 0.5% f’cast, -0.5% prev, 0.0% rvsd
- Australia home loan growth weakest on record despite heavy discounting
Economic Data Ahead
- (0200 ET/0700 GMT) Great Britain Feb Nationwide house price mm, 0.0% f’cast, 0.3% prev
- (0200 ET/0700 GMT) Great Britain Feb Nationwide house price yy, 0.4% f’cast, 0.1% prev
- (0200 ET/0700 GMT) Germany Jan Import Prices YY, 1.3% f’cast, 1.6% prev
- (0245 ET/0745 GMT) France Jan Consumer Spending MM, 1.0% f’cast, -1.5% prev
- (0245 ET/0745 GMT) France Q4 GDP Detailed QQ, 0.3% f’cast, 0.3% prev
- (0245 ET/0745 GMT) France Feb CPI (EU Norm) Prelim YY, 1.7% f’cast, 1.4% prev
- (0800 ET/1300 GMT) Germany Feb CPI Prelim MM, 0.5% f’cast, -0.8% prev
- (0800 ET/1300 GMT) Germany Feb CPI Prelim YY, 1.5% f’cast, 1.4% prev
- (0800 ET/1300 GMT) Germany Feb HICP Prelim MM, 0.6% f’cast, -1.0% prev
- (0800 ET/1300 GMT) Germany Feb HICP Prelim YY, 1.7% f’cast, 1.7% prev
Key Events Ahead
- (0800 ET/1300 GMT) Fed Vice Chairman Richard Clarida speaks at an event in Washington
- (0850 ET/1350 GMT) Atlanta Fed President Raphael Bostic participates in a conference in Atlanta
- (1215 ET/1715 GMT) Philadelphia Fed President Patrick Harker speaks at an event in Philadelphia
- (1300 ET/1800 GMT) Dallas Fed President Robert Kaplan participates in a moderated question-and-answer session in San Antonio
FX Beat
DXY: The dollar index held firm after Federal Reserve Chairman Jerome Powell stated that the central bank will stop shrinking its $4 trillion balance sheet later this year. The greenback against a basket of currencies stood at 96.11, having touched a low of 95.88 on Wednesday, its lowest since February 5. FxWirePro's Hourly Dollar Strength Index stood at -31.37 (Neutral) by 0500 GMT.
EUR/USD: The euro steadied after easing from a 3-week peak in the previous session on Bundesbank President Jens Weidmann's comments, citing that German economic weakness may last longer than expected, but the European Central Bank need not formally delay a planned interest rate increase. The European currency traded 0.1 percent up at 1.1375, having touched a high of 1.1403 on Wednesday, its highest since Feb. 6. FxWirePro's Hourly Euro Strength Index stood at 37.63 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from Eurozone economies, ahead of the U.S. unemployment benefit claims, prelim gross domestic product and Fed Bostic's speech. Immediate resistance is located at 1.1417 (Jan. 25 High), a break above targets 1.1443 (Jan. 28 High). On the downside, support is seen at 1.1335 (10-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar eased against the Japanese yen after U.S. Trade Representative Robert Lighthizer told a Congressional hearing it was too early to predict an outcome in U.S.-China trade negotiations. The major was trading 0.1 percent down at 110.91, having hit a low of 110.35 the day before, its lowest since February 15. FxWirePro's Hourly Yen Strength Index stood at -83.39 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, prelim gross domestic product and Fed Bostic's speech. Immediate resistance is located at 111.19 (Dec. 24 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 110.25 (Feb.15 Low), a break below could take it lower at 109.60 (Feb. 7 Low).
GBP/USD: Sterling consolidated near a 7-1/2 month peak, on growing speculation that a no-deal Brexit was less likely and that Britain's departure from the European Union would be delayed. The major traded flat at 1.3302, having hit a high of 1.3350 on Wednesday; it’s highest since July 9. FxWirePro's Hourly Sterling Strength Index stood at 141.22 (Highly Bullish) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3362 (July 9 High), a break above could take it near 1.3424 (June 12 High). On the downside, support is seen at 1.3200, a break below targets 1.3138 (Oct. 16 Low). Against the euro, the pound was trading 0.1 percent down at 85.50 pence, having hit a high of 85.28 on Wednesday, it’s highest since May 2017
AUD/USD: The Australian dollar gained after data showed domestic business investment surpassed expectations with the biggest jump in three years last quarter, and companies boosted spending plans for the coming year. However, the major trimmed gains following a disappointing reading on Chinese manufacturing. The Aussie trades 0.1 percent up at 0.7145, having hit a high of 0.7198 on Wednesday; it’s highest since February 21. FxWirePro's Hourly Aussie Strength Index stood at -73.46 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7103 (Feb.19 Low), a break below targets 0.7060 (Feb.8 Low). On the upside, resistance is located at 0.7206 (Feb. 21 High), a break above could take it near 0.7245 (Feb. 6 High).
NZD/USD: The New Zealand dollar surged after dairy giant Fonterra cut its annual earnings outlook but raised its 2018/19 forecast for milk prices paid to farmers. However, surveys indicating factory activity in China eased for the third straight month in February dented the bid tone around the major. The Kiwi trades 0.05 percent up at 0.6859, having touched a high of 0.6903 on Tuesday, its highest level Feb. 6. FxWirePro's Hourly Kiwi Strength Index was at -120.53 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6941 (Feb. 1 High), a break above could take it near 0.6969 (Dec. 4 High). On the downside, support is seen at 0.6814 (Feb. 19 Low), a break below could drag it below 0.6797 (Feb. 21 Low).
Equities Recap
Asian shares traded in a volatile market after cautious comments from U.S. Trade Representative Robert Lighthizer deflated optimism over China and the United States trade deal.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.05 percent.
Tokyo's Nikkei declined 0.8 percent to 21,390.26 points, Australia's S&P/ASX 200 index gained 0.3 percent to 6,169.00 points and South Korea's KOSPI eased 1.1 percent to 2,210.03 points.
Shanghai composite index fell 0.5 percent to 2,939.43 points, while CSI300 index traded 0.3 percent down at 3,668.02 points. Hong Kong’s Hang Seng traded 0.1 percent lower at 28,728.72 points.
Commodities Recap
Crude oil prices gained, supported by supply cuts led by producer club OPEC, although weakening factory output in China and Japan and record U.S. crude output limited upside. International benchmark Brent crude was trading 0.1 percent up at $66.36 per barrel by 0419 GMT, having hit a low of $64.29 on Tuesday, its lowest since February 14. U.S. West Texas Intermediate was trading 0.1 percent lower at $56.87 a barrel, after falling as low as $55.00 on Tuesday, its lowest since the February 15.
Gold prices eased, hovering towards a near 2-week low touched in the previous session, as the dollar recouped losses after cautious comments from U.S. Trade Representative Robert Lighthizer dented investors' hopes for a closure to the tariff war with China. Spot gold was trading 0.1 percent down at $1,318.64 per ounce at 0452 GMT, having touched a low of $1,316.76 per ounce on Wednesday, its lowest level since Feb. 15. U.S. gold futures were down 0.1 percent $1,320.10 per ounce.
Treasuries Recap
The Japanese government bond yields slumped towards the end of Asian session, as investors’ risk appetite took a downturn ahead of a trade deal between the United States and China amid ongoing global economic and political uncertainties. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped nearly 2-1/2 basis points to -0.023 percent, the yield on the long-term 30-year hovered around 0.607 percent and the yield on short-term 2-year plunged 15 basis points to -0.149 percent.
The Australian government bond slumped during Asian trading session tracking a similar movement in the United States’ counterpart as investors remain optimistic on U.S.-China trade talk despite Lighthizer highlighted the challenge of trade negotiations. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4 basis points to 2.105 percent, the yield on the long-term 30-year bond jumped 3 basis points to trade at 2.675 percent and the yield on short-term 2-year climbed 1/2 basis point to 1.713 percent.
The Canadian government bond prices were lower across a steeper yield curve. The two-year fell 4 Canadian cents to yield 1.777 percent and the 10-year declined 41 Canadian cents to yield 1.915 percent.
