Market Roundup
- Centrist Macron seen most convincing in French election debate - Elabe poll – Reuters
- Polling relegates far-right leader Le Pen to 3rd place of top five contenders- Reuters
- Australia Q4 house price index +7.7 pct yr/yr – Reuters
- RBA minutes: recent data suggested a "build-up of risks" in the housing market
- RBA: home investment borrowing had picked up, debt rising faster than household incomes
- RBA minutes: home prices strong and rising briskly in Sydney and Melbourne
- RBA minutes: judged steady policy consistent with growth and inflation targets
- RBA minutes: a rising AUD would complicate economic transition
- RBA noted any move to protectionist policies in U.S. would be harmful for global economy
- RBA minutes: global economic outlook more positive, China set to support growth in the near-term
- RBA: slow growth in incomes could restrain consumption given high debt levels
- EXCLUSIVE-Tillerson plans to skip NATO meeting, visit Russia in April -sources – Reuters
- PBOC sets mid-point USD/CNY reference rate at 6.9071 versus 6.8998 prev- Reuters
- China Premier Li says will further open services, industries - Xinhua – Reuters
- FBI head confirms Russia election probe, says Moscow backed Trump – Reuters
Economic Data Ahead
- (0300 ET/0700 GMT) Switzerland Trade mln CH Feb 4733.00
- (0530 ET/0930 GMT) Great Britain CPI YY % Feb 1.80 last
- (0530 ET/0930 GMT) Great Britain RPI Index Feb 265.50 last
- (0530 ET/0930 GMT) Great Britain RPIX YY % Feb 2.90 last
- (0530 ET/0930 GMT) Great Britain RPI MM % Feb -0.60 last
- (0530 ET/0930 GMT) Great Britain CPI MM % Feb -0.50 last
- (0530 ET/0930 GMT) Great Britain Core CPI MM % Feb -1.00 last
- (0530 ET/0930 GMT) Great Britain Core CPI YY % Feb 1.60 last
- (0530 ET/0930 GMT) Great Britain RPI YY % Feb 2.60 last
- (0530 ET/0930 GMT) Great Britain RPI-X (Retail Prices) MM % Feb -0.60 last
- (0700 ET/1100 GMT) Great Britain CBI Trends - Orders Mar 8.00 last
Key Events Ahead
- (0600 ET/1000 GMT) Bank of England Governor Mark Carney will speak on banking.
- (1200 ET/1600 GMT) Kansas City Fed President Esther George's speech
- (1800 ET/2200 GMT) Cleveland Fed President Loretta Mester and Boston's speech
- (2145 ET/0145 GMT) Fed President Eric Rosengren's speech
- N/A Federal Reserve Bank of New York President William Dudley speak
FX Beat
DXY: The dollar was on the defensive versus its major peers after Chicago Federal Reserve President Charles Evans reiterated the central bank's call for two more interest rate hikes this year. The greenback against a basket of currencies traded 0.1 percent down at 100.25, having hit a low of 100.02 in the previous session, its lowest since Feb. 7. FxWirePro's Hourly Dollar Strength Index stood at -63.84 (Bearish) by 0500 GMT.
EUR/USD: The euro rose, extending previous session gains, as the greenback eased after Chicago Federal Reserve President Charles Evans repeated the central bank's call for two more interest rate increases this year. However, an additional hike was possible if inflation were to pick up, he added. Moreover, Macron’s strong performance at the first French Presidential debate strengthened the bid tone around the major. The European currency traded 0.2 percent higher at 1.0757, hovering towards a high of 1.0782 hit on Friday, its highest since Feb. 6. FxWirePro's Hourly Euro Strength Index stood at -34.05 (Neutral) by 0400 GMT. Investors now await Fed officials' speeches, amid a lack of economic data from the Eurozone. Immediate resistance is located at 1.0791 (Feb 6 High), a break above targets 1.0830. On the downside, support is seen at 1.0721 (23.6% retrace of 1.0782 and 1.0525), a break below could drag it near 1.0684 (38.2% retrace).
USD/JPY: The dollar gained after declining to a fresh 3-week low on the back of Chicago Federal Reserve President Charles Evans comments, which disappointed investors who had anticipated rates to be increased more aggressively. The major halted its five-day losing streak as anti-EU candidate Marine Le Pen’s loss in the French Presidential election debate boosted risk-on market sentiment. The pair traded 0.14 percent up at 112.71, having hit a low of 112.25 earlier, its lowest since Feb 28. FxWirePro's Hourly Yen Strength Index stood at 80.14 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track overall market sentiment, ahead of Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester, and Boston Fed President Eric Rosengren's speeches. Immediate resistance is located at 112.96 (78.6% retracement of 115.50 and 112.25), a break above targets 113.52 (61.8% retracement of 115.50 and 112.25). On the downside, support is seen at 112.15 (trendline), a break below could take it lower 112.00.
GBP/USD: Sterling steadied after falling from a 3-week high in the previous session as investors attention shifted on the UK CPI report and Bank of England Governor Carney’s speech. On Monday, the major eased after Prime Minister Theresa May stated that she will trigger Britain's separation proceedings with the European Union on March 29, launching two years of negotiations. Sterling trades flat at 1.2361, having hit a high of 1.2435 the day before, its highest since Feb. 28. FxWirePro's Hourly Sterling Strength Index stood at 80.68 (Slightly Bullish) by 0400 GMT. Investors’ focus will also remain on the U.S. current account data and Fed officials’ speeches for further clues on the pair. Immediate resistance is located at 1.2430 (Jan 6 High), a break above could take it near 1.2471 (78.6 % retracement of 1.2569 and 1.2109). On the downside, support is seen at 1.2321 (21-DMA), a break below targets 1.2300. Against the euro, the pound traded 0.1 percent down at 87.00 pence, having hit a high of 86.58 the prior day, its highest since Mar 9.
AUD/USD: The Australian dollar eased after the RBA minutes cautioned on the growing risk in nation's housing market, leading investors to slash expectations of a further cut in interest rates. The Aussie trades 0.3 percent down at 0.7706, having hit a high of 0.7747 in the previous session, it’s highest since Nov. 9. FxWirePro's Hourly Aussie Strength Index stood at 29.82 (Neutral) by 0500 GMT. Investors will continue to digest the RBA minutes ahead of Fed officials' speeches and U.S. economic data for further momentum on the major. Immediate support is seen at 0.7687 (23.6% retrace of 0.7491 and 0.7747), a break below targets 0.7650 (38.2% retrace). On the upside, resistance is located at 0.7778 (Nov 8 High), a break above could take it over 0.7800.
NZD/USD: The New Zealand dollar declined from a 2-week high despite broad-based U.S. dollar weakness and positive oil prices. The weakness in the major comes in after data released overnight showed New Zealand's visitor arrivals rose at an annualized rate of 1.8 percent in February, as compared to a previous gain of 11.0 percent. The Kiwi trades 0.2 percent down at 0.7039, having touched a peak of 0.7073 the day before, it’s strongest since Mar. 3. FxWirePro's Hourly Kiwi Strength Index was at 37.29 (Neutral) by 0500 GMT. Investors’ will continue to track board based market sentiment, ahead of Fed officials' speeches. Immediate resistance is located at 0.7067 (50.0% retrace of 0.7244 and 0.6890), a break above could take it near 0.7100. On the downside, support is seen at 0.7003 (5-DMA), a break below could drag it near 0.6963 (10-DMA).
Equities Recap
Asian shares touched 15-month highs, while the greenback eased as Federal Reserve's intended gradual pace of hikes disappointed dollar bulls.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.4 percent.
Tokyo's Nikkei fell 0.33 percent to 19,458.10 points, Australia's S&P/ASX 200 index eased 0.10 percent to 5,773.20 points and South Korea's KOSPI was trading 1.01 percent up at 2,178.23 points.
Shanghai composite index edged up 0.17 percent to 3,256.29 points, while CSI300 index was trading 0.33 percent higher at 3,460.80 points.
Hong Kong’s Hang Seng was trading 0.23 percent higher at 24,557.40 points. Taiwan shares added 0.6 percent at 9,972.49 points.
Commodities Recap
Crude oil prices edged up as strong demand was seen to slowly reduce a global fuel supply overhang. International benchmark Brent crude was trading 0.3 percent higher at $51.84 per barrel by 0403 GMT, having hit a high of $52.62 on Thursday, its highest since Mar. 10. U.S. West Texas Intermediate crude rose 1.93 percent to $49.09 a barrel, after rising to a peak of $52.62 last week, its strongest since Mar. 10.
Gold prices eased, reversing most of its previous session gains, however, it held near two-week highs touched in the previous session after the Chicago Federal Reserve's president stated that the U.S. central bank would not rush to hike interest rates. Spot gold edged down 0.4 percent at $1,228.69 per ounce by 0407 GMT, having hit a peak of $1,235.35 on Monday, the highest since March 6. U.S. gold futures fell 0.5 percent to $1,228.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.482 percent higher by 0.011 bps, while 5-year yield was 0.012 bps up at 2.005 percent.
The Australian bonds traded in a tight range as investors refrained from any major activity amid a light trading session. The yield on the benchmark 10-year Treasury note, hovered around 2.82 percent, the yield on 15-year note also traded flat at 3.21 percent and the yield on short-term 2-year remained steady at 1.81 percent.
The New Zealand bonds closed mixed as investors wait to watch the GlobalDairyTrade price auction, scheduled to be held later today. The yield on the benchmark 10-year bond closed flat at 3.25 percent, the yield on 7-year note slipped nearly 1 basis point to 2.82 percent while the yield on short-term 2-year note traded 1/2 basis points higher at 2.12 percent.
The Canadian government bond prices rose across the yield curve, with the 2-year up 2.5 Canadian cents to yield 0.792 percent and the 10-year rising 28 Canadian cents to yield 1.727 percent. The yields on both the 2-year and 10-year issues were their lowest since March 7.
