Market Roundup
- China February trade balance -60.36 bln yuan
- China February Yuan-denominated imports +44.7 pct y/y
- China February Yuan-denominated exports +4.2 pct y/y
- New Zealand q4 s/adj manufacturing sales volumes -1.8 pct on previous qtr
- PBOC sets yuan mid-point at 6.9032 / dlr vs last close 6.9043
- Japan Q4 GDP cap ex rev qq increase to 2 % (forecast 1.7 %) vs previous 0.9 %
- Japan Q4 GDP rev QQ annualised increase to 1.2 % (forecast 1.6 %) vs previous 1.0 %
- Japan Feb bank lending YY increase to 2.8 % vs previous 2.5 %
- Japan Q4 GDP revised QQ* increase to 0.3 % (forecast 0.4 %) vs previous 0.2 %
- NZ's Fonterra: Dairy prices fall 6.3%, with avg selling price NZD 3,512/tonne, volumes +9% at auction
- Atlanta’ Fed’s GDPNow f/c for Q1 2017-0.5% to 1.3% from 1.8% on March 1, peaked at 2.7% in early Feb
- Pres Trump backs House Republican healthcare plan, aims to cut drug prices
- Fillon backers seek unity to revive French presidential bid, New poll again shows Fillon knocked out in round one
Economic Data Ahead
- (0200 ET/0700 GMT) Turkey Industrial Prod Adj YY
- (0245 ET/0745 GMT) France Current Account
- (0245 ET/0745 GMT) France Trade balance
- (0245 ET/0745 GMT) France Imports
- (0245 ET/0745 GMT) France Exports
- (0300 ET/0800 GMT) Germany Industrial Output MM
- (0300 ET/0800 GMT) Spain Ind Output
- (0300 ET/0800 GMT) Czech republic Unemployment Rate
- (0315 ET/0815 GMT) Switzerland CPI MM
- (0315 ET/0815 GMT) Switzerland CPI YY
- (0400 ET/0900 GMT) Indonesia Consumer Conf Index
- (0430 ET/0930 GMT) South Africa Business Conf Index
- (0600 ET/1100 GMT) Brazil Industrial Output MM
- (0600 ET/1100 GMT) Brazil Industrial Output YY
Key Events Ahead
- N/A UK Annual Budget release
- N/A UK finance minister Hammond speech
FX Beat
DXY: The dollar fell versus the safe-haven Japanese yen as downbeat China's trade figures re-ignited risk-off market sentiment. The greenback against a basket of currencies traded flat at 101.81, having hit a high of 101.91 the prior day. FxWirePro's Hourly Dollar Strength Index stood at 95.84 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro declined, extending losses for the third consecutive session, as the greenback strengthened as Federal Reserve officials talked up the prospects of a rate hike this month. The European currency traded lower at 1.0562, having hit a low of 1.0558 in the previous session. FxWirePro's Hourly Euro Strength Index stood at -41.61 (Neutral) by 0400 GMT. Investors’ attention will remain on U.S. economic fundamentals, amid a lack of data from the Eurozone docket. Immediate resistance is located at 1.0597 (21-DMA), a break above targets 1.0621 (38.2 % retracement of 1.0828 and 1.0494). On the downside, support is seen at 1.0551, a break below could drag it near 1.0500.
USD/JPY: The dollar eased as the Japanese yen strengthened following the release of downbeat Chinese trade figures, which triggered risk-off sentiment across the financial markets. China posted a trade deficit in the month of February after recording a bigger-than-expected trade surplus in January. The major traded 0.2 percent lower at 113.67, having hit an early low of 113.60. FxWirePro's Hourly Yen Strength Index stood at 153.80 (Highly Bullish) by 0400 GMT. Investors’ will continue to track overall market sentiment, ahead of the U.S. ADP employment change data, nonfarm productivity and wholesale inventories figures. Immediate resistance is located at 114.15 (Previous Session High), a break above targets 114.75. On the downside, support is seen at 113.34 (10-DMA), a break below could take it near 113.30.
GBP/USD: Sterling steadied after slumping to a 7-week low in the previous session, following the release of weak consumer spending data, which added to worries of Britain's slowing economic growth. However, the downside remains exposed as the Brexit Bill failed to pass through the House of Lords for the second time yesterday. Sterling trades flat at 1.2199, having hit a low of 1.2169 on Tuesday, its weakest since Jan. 17. FxWirePro's Hourly Sterling Strength Index stood at -80.69 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on the UK Annual Budget release, with the finance minister Hammond is expected to provide an upbeat assessment of the economy. Immediate resistance is located at 1.2258 (5-DMA), a break above could take it near 1.2322 (38.2 % retracement of 1.2569 and 1.2169). On the downside, support is seen at 1.2169 (Previous Session Low), a break below targets 1.2100. Against the euro, the pound trades flat at 86.55 pence, having hit a 7-week low of 86.82 the prior session.
AUD/USD: The Australian dollar trimmed gains after China reported an unexpected trade deficit for the month of February. The Chinese trade report showed imports advanced 44.7 percent y/y in CNY terms, beating estimated figure of 23.1 percent, while exports rose 4.2 percent, falling well short of projected rise of 14.6 percent. The Aussie trades 0.06 percent up at 0.7589, having touched a high of 0.7632 in the previous session, it’s highest since Mar. 2. FxWirePro's Hourly Aussie Strength Index stood at 21.56 (Neutral) by 0500 GMT. Markets will continue to track overall market sentiment, ahead of U.S. economic data. Immediate support is seen at 0.7570 (Mar 6 Low), a break below could drag it near 0.7540. On the upside, resistance is located at 0.7617 (38.2 % retracement of 0.7740 and 0.7542), a break above targets 0.7653 (21-DMA).
NZD/USD: The New Zealand dollar steadied after declining for eight consecutive sessions following the latest dairy auction results which showed milk prices suffered heavy losses. The major tumbled to a two-month low earlier in the day as Global Dairy Trade price index dropped by 6.3 percent compared to the previous result of -3.20 percent. The Kiwi trades 0.1 percent higher at 0.6963, having hit an early low of 0.6950, it’s lowest since Jan. 9. FxWirePro's Hourly Kiwi Strength Index was at -135.92 (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 0.7020 (23.6 % retracement of 0.7246 and 0.6950), a break above could take it near 0.7050. On the downside, support is seen at 0.6950 (Session Low), a break below could drag it near 0.6900.
Equities Recap
Asian shares gained after falling in early trade as markets digested downbeat Chinese trade figures and shifted their focus on next week's Federal Reserve monetary policy meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.25 percent.
Tokyo's Nikkei eased 0.49 percent to 19,249.23 points, Australia's S&P/ASX 200 index fell 0.08 percent to 5,756.60 points and South Korea's KOSPI was trading 0.06 percent up at 2,095.40 points.
Shanghai composite index declined 0.16 percent to 3,237.21 points, while CSI300 index was trading 0.16 percent down at 3,447.03 points.
Hong Kong’s Hang Seng was trading 0.29 percent higher at 23,748.75 points. Taiwan shares added 0.2 percent at 9,753.45 points.
Commodities Recap
Crude oil prices edged up, after declining from a 1-week high in the previous session after industry data indicated a potential ninth straight week of inventory pileup, despite output cuts by OPEC and non-OPEC members. International benchmark Brent crude was trading 0.1 percent up at $55.63 per barrel by 0409 GMT, having hit a high of $56.61 on Tuesday, its highest since Mar. 1. U.S. West Texas Intermediate crude trades flat at $52.79 a barrel, after rising to a peak of $53.77 the day before, its strongest since Mar. 1.
Gold prices steadied after declining to a 4-week low in the previous session on increased expectations of a U.S. rate hike in March, ahead of U.S. payrolls data this week. Spot gold rose 0.2 percent to $1,217.61 per ounce at 0414 GMT, having touched its lowest since Feb. 3 at $1,214.0 an ounce on Tuesday. U.S. gold futures were flat at $1,216.4.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.5125 percent higher by 0.002 bps, while 5-year yield was at 2.0442 percent.
The Australian bonds continued to slump as investors cashed in profits after the Reserve Bank of Australia remained on hold at the latest monetary policy meeting held yesterday, hinting at no further policy easing in the near-term. The yield on the benchmark 10-year Treasury note jumped nearly 5 basis points to 2.87 percent, the yield on 15-year note also climbed nearly 5 basis points to 3.28 percent while the yield on short-term 1-year traded 1 basis point lower at 1.61 percent.
The New Zealand government bonds gained modestly at the time of closing following a drop in global dairy prices at the latest GlobalDairyTrade price auction held late yesterday. The yield on the benchmark 10-year bond fell 1 basis point to 3.34 percent at the time of closing, the yield on 7-year note also slipped nearly 1 basis point to 2.90 percent and the yield on short-term 5-year note also traded 1 basis point lower at 2.61 percent.
Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The 2-year dipped 6 Canadian cents to yield 0.800 percent, and the 10-year declined 24 Canadian cents to yield 1.738 percent.
