Market Roundup
- Powell's Fed likely to raise rates, may upgrade 2018 outlook
- U.S. Congress leaders near deal on government funding bill -senators
- Trump praises U.S. military sales to Saudi as he welcomes crown prince
- Trump, deemed 'not above the law,' faces legal storm
- G20 sees need for 'dialogue,' fails to defuse trade war threat
- S.Korea's Moon says three-way summit with N.Korea, U.S. possible
- Japan gets its way at G20 on warning against recent market rout
- Fitch affirms China's A+ rating, says commitment to debt stabilisation key
- China will safeguard national interests in response to U.S. trade investigations-vice commerce min
- Ex-PBOC gov: China will continue to adopt proactive fiscal, neutral monetary policies
- Cambridge Analytica CEO claims influence on U.S. election, Facebook questioned
- Asian business sentiment edges up to hit 7-year high - Thomson Reuters/INSEAD
Economic Data Ahead
- (0530 ET/0930 GMT) Great Britain Jan Average Earnings (Ex-Bonus), 2.6% eyed; 2.5% last
- (0530 ET/0930 GMT) Great Britain Jan ILO Unemployment Rate, 4.4% eyed; 4.4% last
- (0530 ET/0930 GMT) Great Britain Jan Average Week Earnings 3M YY, 2.6% eyed; 2.5% last
- (0530 ET/0930 GMT) Great Britain Feb PSNB Ex Banks GBP, 1.1 bln eyed; -10.01 bln last
- (0530 ET/0930 GMT) Great Britain Feb Claimant Count Unemployment Change, -5k eyed; -7.2k last
- (0530 ET/0930 GMT) Great Britain Jan Employment Change, 84 eyed; 88 last
- (0530 ET/0930 GMT) Great Britain Feb PSNCR, GBP, -26.38 bln last
- (0530 ET/0930 GMT) Great Britain Feb PSNB, GBP, 0.0 bln eyed; -11.62 bln last
Key Events Ahead
- N/A ECB Governing Council meets in Frankfurt. No interest rate announcements scheduled
- N/A World Bank Group President Jim Yong Kim will visit Uruguay
- (0400 ET/0800 GMT) Austrian Finance Minister Hartwig Loeger gives budget speech in Vienna
- (1230 ET/1630 GMT) Riksbank Deputy Governor Martin Floden tells about the central bank's history and on the development of money in Karlstad, Sweden
- (1400 ET/1800 GMT) U.S. Federal Reserve's Federal Open Market Committee (FOMC) announces the decision on interest rate, followed by a statement in Washington
- (1430 ET/1830 GMT) U.S. Federal Reserve Chair Jerome Powell holds a news conference on FOMC interest rate decision
FX Beat
DXY: The dollar index edged down as investors waited for clarity on whether the Federal Open Market Committee will forecast four rate hikes this year, instead of the median three hikes seen in December's quarterly forecast. The greenback against a basket of currencies 0.2 percent down at 90.27, having touched a high of 90.45 on Tuesday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at 48.08 (Neutral) by 0500 GMT.
EUR/USD: The euro rebounded after falling to a 3-week low in the previous session, as the greenback eased on speculation that hawkish expectations are overdone and Powell will likely avoid being too hawkish. The European currency traded 0.2 percent up at 1.2262, having touched a low of 1.2239 the day before, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at -125.44 (Highly Bullish) by 0500 GMT. Investors’ attention will remain on the ECB non-monetary policy meeting and a German bond auction, ahead of the FOMC announcement and Jerome Powell's first news conference as Fed chief. Immediate resistance is located at 1.2307 (5-DMA), a break above targets 1.2383 (Mar. 15 High). On the downside, support is seen at 1.2300 (Mar. 15 Low), a break below could drag it lower 1.2251 (Mar. 2 Low).
USD/JPY: The dollar slightly eased as investors refrained from taking big positions on concerns that whether the U.S. Federal Reserve will indicate faster monetary tightening this year. The major was trading 0.05 percent down at 106.47, having hit a high of 106.60 on Tuesday, its highest since Mar. 14. FxWirePro's Hourly Yen Strength Index stood at 6.04 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of FOMC decision and Fed chief Powell's speech. Immediate resistance is located at 106.74 (Mar. 14 Low), a break above targets 106.97 (Mar 12 High). On the downside, support is seen at 105.92 (Previous Session Low), a break below could take it lower 105.25.
GBP/USD: Sterling steadied above the 1.4000 handle as a Brexit transition deal was agreed between Britain and the European Union. Investors now await the Bank of England decision on Thursday, with the central bank signalling that it wants to see wage pressures building before it hikes rates. The major traded 0.1 percent up at 1.4014, having hit a high of 1.4088 on Monday, it’s highest since Feb. 16. FxWirePro's Hourly Sterling Strength Index stood at 95.28 (Slightly Bullish) by 0500 GMT. Investors’ focus will remain on UK wage growth and employment numbers, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.4066 (Previous Session Low), a break above could take it near 1.4145. On the downside, support is seen at 1.3973 (5-DMA), a break below targets 1.3928 (10-DMA). Against the euro, the pound was trading 0.1 percent down at 87.51 pence, having hit a high of 87.44 pence the day before, it’s highest since Feb 8.
AUD/USD: The Australian dollar rose after falling for four straight sessions on worries that Trump's actions could escalate into a trade war if China and other countries retaliate with similar measures. The Aussie trades 0.2 percent up at 0.7697, having hit a low of 0.7678 the day before; it’s lowest since Dec. 21. FxWirePro's Hourly Aussie Strength Index stood at -45.34 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7653 (Dec. 21 Low), a break below targets 0.7626 (Dec 14 Low). On the upside, resistance is located at 0.7731 (78.6% retracement of 0.7916 and 0.7678), a break above could take it near 0.7756 (5-DMA).
NZD/USD: The New Zealand dollar slumped to a 1-1/2 month low as reports that President Donald Trump would announce import tariffs on $60 billion of Chinese goods and services as early as Friday undermined market sentiment. The Kiwi trades 0.1 percent down at 0.7176, having touched a low of 0.7167 earlier, its lowest level since Jan. 10. FxWirePro's Hourly Kiwi Strength Index was at -114.3 (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 0.7208 (78.6% retracement of 0.7354 and 0.7167), a break above could take it near 0.7248 (Mar 20 High). On the downside, support is seen at 0.7144 (Jan. 5 Low), a break below could drag it below 0.7100.
Equities Recap
Asian shares steadied, while the greenback consolidated within narrow ranges as investors anticipated a quarter-point hike in the Fed's policy rate and awaited guidance on the number of rate hikes to expect this year.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.1 percent.
Australia's S&P/ASX 200 index gained 0.3 percent to 5,950.30 points and South Korea's KOSPI rallied 0.1 percent to 2,487.06 points.
Shanghai composite index rose 0.4 percent to 3,303.20 points, while CSI300 index was trading 0.4 percent up at 4,092.76 points.
Hong Kong’s Hang Seng was trading 0.1 percent higher at 31,866.75 points. Taiwan shares ended flat at 11,011.07 points.
Commodities Recap
Crude oil prices eased after rising to an over 3-week high in the previous session on the back of day tensions in the Middle East and healthy demand. International benchmark Brent crude was trading 0.05 percent down at $67.52 per barrel by 0449 GMT, having hit a high of $67.84 on Tuesday, its highest since Feb. 26. U.S. West Texas Intermediate was trading 0.1 percent down at $63.65 a barrel, after rising as high as $63.95 the day before, its strongest since Mar. 27.
Gold prices rose as the dollar fell as investors await the outcome of the U.S. Federal Reserve's meeting for signs of the pace of monetary tightening. Spot gold gained 0.2 percent to $1,313.47 per ounce at 0452 GMT, having hit a low of $1,307.05 an ounce on Tuesday, its lowest since Mar. 1. U.S. gold futures for April delivery fell 0.1 percent to $1,313.80 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.897 percent higher by 0.017 bps, while 5-year yield was 0.017 bps high at 2.699 percent.
The Australian bonds slumped on following weakness in the U.S. Treasuries as hopes of interest rate hike reign market sentiments. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.715 percent, the yield on the long-term 30-year note traded 2 basis points higher at 3.306 percent and the yield on short-term 2-year climbed 3 basis points to 2.035 percent.
The New Zealand government bonds ended lower even as global dairy prices fell further at the country’s latest GlobalDairyTrade (GDT) auction. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.86 percent, the yield on 20-year jumped 2-1/2 basis points to 3.37 percent and the yield on short-term 2-year closed 1 basis point higher at 1.92 percent.
The Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The 10-year declined 29 Canadian cents to yield 2.205 percent.
