Market Roundup
- MSCI to quadruple weighting of China A-shares in its global benchmarks
- China Feb Caixin Mfg PMI Final, 49.9, 48.5 f’cast, 48.3 prev
- Trump warns he could abandon China trade deal as advisers tout progress
- Pompeo says world should have eyes wide open about Chinese tech risks
- S.Korea to work with U.S. and N.Korea after failed nuclear talks
- Fed's Powell: 'Muted' inflation gives room for wages to rise
- Japan Feb CPI Tokyo Ex fresh food YY, 1.1%, 1.0% f’cast, 1.1% prev
- Japan Jan Unemployment Rate, 2.5%, 2.4% f’cast, 2.4% prev
- Japan Q4 Business Capex (MOF) YY, 5.7%, 4.5% prev
- Japan Feb Nikkei Mfg PMI, 48.9, 48.5 prev
- Investors favor equity ETFs, junk bonds as risk appetite grows -Lipper
- Foreign CB US debt holdings +$10.428 bln to $3.442 tln Feb 27 week
- Treasuries +$10.404 bln to $3.046 tln, agencies -681 mln to $324.007 bln
Economic Data Ahead
- (0250 ET/0850 GMT) France Feb Markit Mfg PMI, 51.4 f’cast, 51.4 prev
- (0255 ET/0855 GMT) Germany Feb Markit/BME Mfg PMI, 47.6 f’cast, 47.6 prev
- (0255 ET/0855 GMT) Germany Feb Unemployment Chg SA, -5k f’cast, -2k prev
- (0255 ET/0855 GMT) Germany Feb Unemployment Rate SA, 5.0% f’cast, 5.0% prev
- (0400 ET/0900 GMT) EZ Feb Markit Mfg Final PMI, 49.2 f’cast, 49.2 prev
- (0430 ET/0930 GMT) Great Britain Jan BOE Consumer Credit, 0.800 bln f’cast, 0.687 bln prev
- (0430 ET/0930 GMT) Great Britain Jan Mortgage Lending, 3.900 bln f’cast, 4.112 bln prev
- (0430 ET/0930 GMT) Great Britain Jan Mortgage Approvals, 63.400k f’cast, 63.793k prev
- (0430 ET/0930 GMT) Great Britain Feb Markit/CIPS Mfg PMI, 52.0 f’cast, 52.8 prev
- (0500 ET/1000 GMT) EZ Feb HICP Flash YY, 1.5% f’cast, 1.4% prev
- (0500 ET/1000 GMT) EZ Feb HICP-X F&E Flash YY, 1.1% f’cast, 1.2% prev
- (0500 ET/1000 GMT) EZ Jan Unemployment Rate, 7.9% f’cast, 7.9% prev
Key Events Ahead
- (0400 ET/0900 GMT) Portuguese Central Bank Governor Carlos Costa speaks at a conference in Delphi, Greece
- (0415 ET/0915 GMT) Rohan Churm, head of foreign exchange division, Bank of England, speaks at an event in London
- (1315 ET/1815 GMT) Atlanta Fed President Raphael Bostic speaks at a conference in Washington
FX Beat
DXY: The dollar index rose, extending gains for the third straight session after data showed U.S. gross domestic product increased at a 2.6 percent annualized rate in the fourth quarter, above forecasts for a 2.3 percent gain. The greenback against a basket of currencies traded 0.05 percent up at 96.27, having touched a low of 95.82 on Thursday, its lowest since February 5. FxWirePro's Hourly Dollar Strength Index stood at 35.98 (Neutral) by 0600 GMT.
EUR/USD: The euro consolidated within narrow ranges, after a survey showed the European Central Bank is set to delay hiking interest rates from record lows until next year amid a slowdown in eurozone economic growth. The European currency traded flat at 1.1371, having touched a high of 1.1419 on Thursday, its highest since Feb. 5. FxWirePro's Hourly Euro Strength Index stood at -33.37 (Neutral) by 0600 GMT. Investors’ attention will remain on a series of data from Eurozone economies and EZ prelim consumer price index, ahead of the U.S. personal consumption expenditures, manufacturing PMI's from both Markit and ISM, 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 1.1343 (10-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar rallied to a 2-1/2 month peak, underpinned by a surge in the U.S. Treasury yields after data showed U.S. gross domestic product surpassed expectations. However, mounting concerns over a slowdown in global growth dented the bid tone around the dollar. The major was trading 0.3 percent up at 111.72, having hit a high of 111.77, its highest since December 20. FxWirePro's Hourly Yen Strength Index stood at -110.62 (Highly Bearish) by 0600 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditures, manufacturing PMI's from both Markit and ISM, and Fed Bostic's speech. Immediate resistance is located at 112.00, a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 110.66 (Feb.28 Low), a break below could take it lower at 110.25 (Feb.15 Low).
GBP/USD: Sterling eased as investors assessed the continued uncertainty about when Britain will exit the European Union and on what terms. The major traded 0.5 percent down at 1.3255, having hit a high of 1.3350 on Wednesday; it’s highest since July 9. FxWirePro's Hourly Sterling Strength Index stood at 73.66 (Bullish) 0600 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 85.79 pence, having hit a high of 85.28 on Wednesday, it’s highest since May 2017
AUD/USD: The Australian dollar plunged to a 1-week low, on data that showed Australian households have been reining in spending amid sluggish wage growth and sliding home prices. The Aussie trades 0.05 percent down at 0.7091, having hit a low of 0.7085; it’s lowest since February 22. FxWirePro's Hourly Aussie Strength Index stood at -121.23 (Highly Bearish) by 0600 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7060 (Feb.8 Low), a break below targets 0.7016 (Dec.26 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 data released earlier in the day showed China's Caixin/Markit Manufacturing Purchasing Managers' Index rose to 49.9 in February, from 48.3 in January, surpassing expectations. The Kiwi trades 0.1 percent up at 0.6816, having touched a high of 0.6903 on Tuesday, its highest level Feb. 6. FxWirePro's Hourly Kiwi Strength Index was at -122.00 (Highly Bearish) by 0600 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6853 (Feb. 22 High), a break above could take it near 0.6941 (Feb. 1 High). On the downside, support is seen at 0.6797 (Feb. 21 Low), a break below could drag it below 0.6774(Feb. 6 Low).
Equities Recap
Asian shares advanced, boosted by a rally in Chinese markets after a survey of China's manufacturing surprised on the higher side.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei rallied 1.02 percent to 21,602.69 points, Australia's S&P/ASX 200 index gained 0.4 percent to 6,192.70 points.
Shanghai composite index rose 1.4 percent to 2,981.56 points, while CSI300 index traded 0.3 percent up at 3,735.88 points. Hong Kong’s Hang Seng traded 0.5 percent higher at 28,772.70 points.
Commodities Recap
Crude oil prices rose, extending gains for the fourth straight session, as markets tightened amid output cuts by producer cartel OPEC, however, surging U.S. supply and a global economic slowdown limited the upside. International benchmark Brent crude was trading 0.3 percent up at $66.54 per barrel by 0508 GMT, having hit a low of $64.29 on Tuesday, its lowest since February 14. U.S. West Texas Intermediate was trading 0.2 percent higher at $57.35 a barrel, after falling as low as $55.00 on Tuesday, its lowest since the February 15.
Gold prices slumped to a 2-week low as upbeat U.S. economic data boosted the greenback. Spot gold was trading 0.05 percent down at $1,312.81 per ounce at 0512 GMT, having touched a low of $1,312.17 per ounce earlier, its lowest level since Feb. 15. U.S. gold futures were down 0.1 percent at $1,314.80 per ounce.
Treasuries Recap
The Australian government bond slumped during Asian trading session tracking a similar movement in the United States’ counterpart as stronger-than-expected U.S. Q4 GDP growth boosted investors risk-taking appetite. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4-1/5 basis points to 2.15 percent, the yield on the long-term 30-year bond jumped 3 basis points to trade at 2.71 percent and the yield on short-term 2-year climbed 2-1/2 basis points to 1.74 percent.
The Canadian government bond prices were lower across a steeper yield curve. The two-year fell 1.5 Canadian cents to yield 1.783 percent and the 10-year declined 28 Canadian cents to yield 1.948 percent.
