Market Roundup
- RBA sticks to script, holds OCR at 1.5%, global economic conditions improved over recent months, unchanged policy consistent with growth-inflation targets, rising AUD could complicate economic transition.
- BoJ Policy Board Masai – Big yen swings cause for concern, economy better but BoJ ready to expand stimulus if necessary, no change in commitment to QQE and yield curve control – Reuters.
- BoJ Gov Kuroda faces bond buying dilemma as his skeptics head out – Reuters.
- Japan PM Abe – Trump said the US with Japan 100% on North Korea missile issue.
- Japan end-February foreign reserves $1.2323 trln, end-January $1.2315 trln.
- Starbucks to debut 7-year global JPY bond via MUFG, Morgan Stanley – IFR.
- Toyota sees Europe sales up 5% this year as hybrids push pays off – Reuters.
- Asia investors put aside trade war fears to bet on reflation – Reuters.
- China FinMin Xiao– To strictly control local government debt quotas –Reuters.
- UK Feb BRC like-for-like retail sales -0.4% y/y, total sales +0.4%, Jan -0.6%, +0.1%, total non-food sales 3-mos to Feb -0.2% y/y, first fall since Nov ’11, Brexit-higher inflation dampening sales, cut-back on luxuries.
- Australia Feb AIG/HIA PCI +5.4 points to 53.1, highest since mid-‘16.
- RBNZ DepGov Spencer – RBA to review bank capital requirements – Reuters.
- IMF – High NZ household debt a risk to stability – Reuters.
- New Zealand Q4 wholesale sales +0.7% q/q, +3.8% y/y, Q3 +1.0% q/q.
Economic Data Ahead
- (0200 ET/0700 GMT) Norway Jan manufacturing output, +0.2% m/m eyed; last +1.1%.
- (0200 ET/0700 GMT) Germany Jan industrial orders, -2.5% m/m, +4.3% y/y eyed; last +5.2%, +8.1%.
- (0245 ET/0745 GMT) France Jan budget balance; last E68.98 bln deficit.
- (0300 ET/0800 GMT) Switzerland Feb foreign currency reserves; last CHF643.7 bln.
- (0330 ET/0830 GMT) Great Britain Feb Halifax house price index, +0.4% m/m eyed; last -0.9%.
- (0400 ET/0900 GMT) Italy Jan producer prices; last +0.6% m/m, +0.9% y/y.
- (0500 ET/1000 GMT) Eurozone Q4 GDP – revised, +0.4% q/q, +1.7% y/y eyed; prelim +0.4%, +1.7%.
- (0830 ET/1330 GMT) United States Jan int’l trade bal, $48.5 bln deficit eyed; last $44.3 bln deficit.
- (0830 ET/1330 GMT) Canada Jan trade balance, C$700 mln surplus eyed; last C$920 mln surplus.
- (1500 ET/2000 GMT) United States Jan consumer credit, $17.1 bln eyed; last $14.16 bln.
- (1645 ET/2145 GMT) New Zealand Q4 manufacturing sales; last +2.1%.
Key Events Ahead
- N/A China National People’s Congress.
- N/A ESM 10-year benchmark via Barclays, CA, DB - IFR.
- N/A Italy ’28 Euro linker via DB, JPM, MPS, SocGen and UBS – IFR.
- (0430 ET/0930 GMT) ECB zero% 7-day refi, E23 bln allotment eyed, E25.3 bln maturing.
- (0440 ET/0940 GMT) Spain 6 and 12-month treasury bill auctions.
- (0500 ET/1000 GMT) OECD interim economic outlook.
- (0500 ET/1000 GMT) Austria E1.32 bln total 0.75% and 2.4% 2026 and 2034 RAGB auctions.
- (0530 ET/1030 GMT) German FinMin Schaeuble press conference ahead of G20 meeting.
- (0530 ET/1030 GMT) Germany E500 mln 0.5% 2030 index-linked Bund auction.
- (0540 ET/1040 GMT) Belgium E1.7-2.1 bln 3 and 12-month treasury certificate auctions.
- (0630 ET/1130 GMT) ESM E1.5 bln 3-month bill auction.
- (0700 ET/1200 GMT) NZ Fonterra dairy auction, GDT price index.
- (0900 ET/1400 GMT) Norges Bank DepGov Matsen speaks in Trondheim, Norway.
FX Beat
DXY: The dollar eased across the board as investors worried about U.S. President Donald Trump's lack of focus on economic policies. The greenback against a basket of currencies traded 0.05 percent down at 101.65, having hit a low of 101.22 the prior day, it’s lowest since Feb. 28. FxWirePro's Hourly Dollar Strength Index stood at -17.05 (Neutral) by 0500 GMT.
EUR/USD: The euro rose after declining from a 2-week high in the previous session as concerns over President Donald Trump's ability to focus on economic policies weighed on the greenback. However, the upside in the major remained limited as investors remained cautious ahead of Thursday's European Central Bank meeting, where it is widely expected to keep rates on hold and remain neutral on the policy stance. The European currency traded 0.1 percent up at 1.0591, having hit a high of 1.0639 on Monday, it’s highest since Feb. 17. FxWirePro's Hourly Euro Strength Index stood at 106.91 (Highly Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone's gross domestic product figures, ahead of U.S. Trade balance and consumer credit data. Immediate resistance is located at 1.0605 (21-DMA), a break above targets 1.0621 (38.2 % retracement of 1.0828 and 1.0494). On the downside, support is seen at 1.0564 (10-DMA), a break below could drag it near 1.0500.
USD/JPY: The dollar was little changed as global political uncertainties continued to support the safe-haven assets amid growing expectations of Federal Reserve interest rates hike next week. Investors remain concerned over U.S. President Donald Trump ability to focus on his promised economic policies after he alleged over the weekend that he was wiretapped by his predecessor, Barack Obama. The major traded flat at 113.90, having hit a low of 113.55 hit in the previous session, its lowest since Mar. 1. FxWirePro's Hourly Yen Strength Index stood at 43.13 (Neutral) by 0400 GMT. Investors’ will continue to track overall market sentiment, ahead of the U.S. economic data. Immediate resistance is located at 114.30, a break above targets 114.75. On the downside, support is seen at 113.50, a break below could take it near 113.18 (21-DMA).
GBP/USD: Sterling steadied as the dollar weakened amid renewed geopolitical concerns. However, it traded near 6-week lows as uncertainty over when the formal process for Britain's departure from the European Union would be triggered continued to weigh on the major. Sterling trades flat at 1.2237, having hit a low of 1.2214 on Friday, its weakest since Jan. 17. FxWirePro's Hourly Sterling Strength Index stood at -92.78 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on UK Halifax house prices, ahead of U.S. trade balance and consumer credit figures. Immediate resistance is located at 12250, a break above could take it near 1.2298 (23.6 % retracement of 1.2569 and 1.2214). On the downside, support is seen at 1.2214(Mar 3 Low), a break below targets 1.2200. Against the euro, the pound trades flat at 86.47 pence, having hit a 2-week low of 86.66 the prior session.
AUD/USD: The Australian dollar rallied above the 0.7600 handle after the Reserve bank of Australia kept interest rates unchanged at 1.5 percent as widely expected and showed no hint of considering another easing. However, rising March Fed rate hike bets limited the gains in the major. The Aussie trades 0.5 percent up at 0.7615, having touched an early high of 0.7632, it’s highest since Mar. 2. FxWirePro's Hourly Aussie Strength Index stood at 125.71 (Highly Bullish) by 0500 GMT. Markets will continue to digest RBA policy statement, ahead of U.S. economic data. Immediate support is seen at 0.7570 (Previous Session Low), a break below could drag it near 0.7540. On the upside, resistance is located at 0.7640 (23.6 % retracement of 0.7740 and 0.7542), a break above targets 0.7656 (21-DMA).
NZD/USD: The New Zealand dollar steadied after declining for seven consecutive sessions, ahead of a global dairy auction due late Tuesday. Investors expect a sharp drop in prices of around 8 percent after it declined 3.2 percent in the previous auction. The Kiwi trades 0.2 percent higher at 0.7007, having hit a low of 0.6982 earlier in the day, it’s lowest since Jan. 11. FxWirePro's Hourly Kiwi Strength Index was at -124.49 (Highly Bearish) by 0500 GMT. Investors’ will continue to track board based market sentiment, ahead of the U.S. macroeconomic fundamental drivers for further momentum in the major. Immediate resistance is located at 0.7055 (23.6 % retracement of 0.7246 and 0.6997), a break above could take it near 0.7100. On the downside, support is seen at 0.6961 (Jan. 11 Low), a break below could drag it near 0.6900.
Equities Recap
Asian shares remained flat after the Wall Street declined on worries about U.S. President Trump's ability to focus on economic policies.
MSCI's broadest index of Asia-Pacific shares outside Japan remained flat.
Tokyo's Nikkei declined 0.2 percent to 19,338.67 points, Australia's S&P/ASX 200 index rose 0.24 percent to 5,760.20 points and South Korea's KOSPI was trading 0.62 percent up at 2,094.35 points.
Shanghai composite index climbed 0.05 percent to 3,235.55 points, while CSI300 index was trading 0.02 percent up at 3,447.46 points.
Hong Kong’s Hang Seng was trading 0.41 percent higher at 23,692.29 points. Taiwan shares added 0.6 percent at 9,738.07 points.
Commodities Recap
Crude oil prices edged down after rising in the previous two sessions, as concern over rising U.S. shale output offsets efforts of OPEC and non-OPEC members to cut production. International benchmark Brent crude was trading 0.1 percent down at $55.91 per barrel by 0412 GMT, having hit a low of $55.01 on Thursday, its lowest since Feb. 8. U.S. West Texas Intermediate crude trades flat at $53.16 a barrel, after tumbling to a trough of $52.52 last week, its weakest since Feb. 9.
Gold prices edged up, reversing some of its previous session losses as growing political uncertainties in Europe and the U.S. boosted the metal's safe haven appeal. Spot gold rose 0.1 percent to $1,226.47 per ounce at 0417 GMT, having hit a low of $1,222.72 on Friday, the lowest since Feb. 15. U.S. gold futures for April delivery were little changed at $1,225.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.4962 percent higher by 0.003 bps, while 5-year yield was up by 0.005 bps at 2.0192 percent.
The Australian bonds plunged after the Reserve Bank of Australia remained on hold at today’s monetary policy meeting, hinting at no further policy easing in the near-term. The yield on the benchmark 10-year Treasury note rose 1 basis point to 2.82 percent, the yield on 15-year note also nearly 1-1/2 basis points to 3.23 percent while the yield on short-term 2-year traded nearly 1/2 basis point lower at 1.84 percent.
The New Zealand government bonds traded flat as investors remain sidelined in any major trading activity amid a subdued session. The yield on the benchmark 10-year bond hovered around 3.33 percent at the time of closing, the yield on 7-year note also trade flat at 2.89 percent and the yield on short-term 2-year note also traded 1/2 basis point lower at 2.20 percent.
Canadian government bond prices were mixed and little changed across the yield curve, with the 2-year flat to yield 0.765 percent and the 10-year down 6 Canadian cents to yield 1.707 percent.
