Market Roundup
- EUR/USD -0.2%, USD/JPY flat, GBP/USD -0.3%, DXY -0.05%
- DAX +1.0%, CAC +0.7%, Brent +1.3%, Gold +0.6%, Copper +1.4%
- Dollar steadies after worst fall in two months
- EZ Feb Inflation final 0.4% m/m, 2.0% y/y vs previous -0.8%/2.0%. 0.4%/2.0% forecast
- SNB left policy unchanged: Sight depo rate -0.75%-3m Libor -0.25%-1.25%
- SNB says will remain active in FX market as necessary
- Norway's central bank leaves interest rates unchanged
- BoJ leaves monetary policy as is, as eyed
- German FinMin Schaeuble: U.S administration brings some uncertainty to G20 talks
Economic Data Preview
- (0830 ET/1230 GMT) The U.S. Department of Commerce is expected to report that housing starts increased to a 1.260 million units in February from 1.246 million units in January.
- (0830 ET/1230 GMT) The U.S. building permits are likely to have decreased to a 1.260 million-unit pace in February from a 1.293 million-unit pace in January.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 3,000 to a seasonally adjusted 240,000 for the week ended Mar. 10 while continuing claims for the week ended Mar. 3 is expected to decline to 2.050 m from 2.058 m.
- (0830 ET/1230 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity declined to a reading of 30.0 in March from 43.3 in February.
- (0830 ET/1230 GMT) The Statistics Canada will report foreign portfolio investment in domestic stocks for the month of January.
- (0830 ET/1230 GMT) The Statistics Canada will release investment in foreign securities figures for the month of January.
- (1000 ET/1400 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of January. The report is expected to show job openings fell to 5.450 million from 5.501 million in December.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending March 10.
- (1730 ET/2130 GMT) New Zealand will release its Business PMI index for the month of March. The index stood at 51.6 in the previous month.
Key Events Ahead
- (1030 ET/1430 GMT) FedTrade 15-yr Fannie Mae/Freddie Mac (max $550 mn)
- N/A Canada's Minister of International Trade Francois-Philippe Champagne will meet Mexican Trade Secretary Ildefonso Guajardo and will address to the members of Canada-Mexico Chamber of Commerce.
FX Beat
DXY: The dollar attempted a minor recovery versus its major peers following a solid rebound in the U.S. Treasury yields. The greenback against a basket of currencies traded 0.05 percent up at 100.60, having hit a low of 100.43 earlier, its lowest since Feb. 16. FxWirePro's Hourly Dollar Strength Index stood at -112.91 (Highly Bearish) by 1100 GMT.
EUR/USD: The euro eased from a 5-week high touched earlier in the session, as the dollar attempted a minor recovery across the board on the back of rising U.S. Treasury yields. The major failed to benefit from upbeat consumer price index, which rose 0.4 percent in February in line with estimates. The European currency traded 0.1 percent lower at 1.0719, having hit a high of 1.0746 earlier, its highest since Feb. 7. FxWirePro's Hourly Euro Strength Index stood at -14.94 (Neutral) by 1000 GMT. Any close above 1.0700 confirms minor bullishness, a jump till 1.07840 (161.8% 1.07140 and 1.05990) /1.0800/1.0828 is likely. On the lower side, any minor weakness can be seen below 1.06980 (100- day EMA) and break below will drag the pair till 1.06500 (100- day MA)/1.05990.
USD/JPY: The dollar steadied after declining to a 2-week low as the Federal Reserve sounded less hawkish than anticipated on future rate rises. The major tumbled below the 113.00 handle earlier in the day, however, it turned positive as Dutch centre-right Prime Minister Mark Rutte victory in the Netherlands elections boosted risk-on market profile. The major traded 0.1 percent up at 113.50, having hit a low of 112.90 earlier, its lowest since Mar 1. FxWirePro's Hourly Yen Strength Index stood at 107.95 (Highly Bullish) by 1000 GMT. On the higher side, any break above 113.56 (daily Kijun-Sen) will take the pair till 113.91 (21- day EMA)/114.30. The near term support is around 112.30 (100 day EMA) and any break below will drag it till 111.59.
GBP/USD: Sterling eased after Britain's queen Elizabeth gave formal approval to Brexit legislation, which gave PM May power to begin EU exit talks. Moreover, a solid rebound staged by the U.S. treasury yields boosted the dollar versus its major peers, which intensified the selling pressure behind the major. Sterling trades 0.3 percent down at 1.2252, having hit a high of 1.2308 in the previous session, its highest since Mar. 1. FxWirePro's Hourly Sterling Strength Index stood at -90.33 (Slightly Bearish) by 1000 GMT. On the higher side, any break above 1.2330 will take the pair to next level 1.23450/1.23800. The next immediate support stands at 1.2200 and any break below will drag it down till 1.21300/ 1.2080/ 1.20300.
USD/CHF: The Swiss franc rose to a 1-month high as the dollar slumped after the U.S. Federal Reserve signaled a cautious stance on interest rate policy this year. The major traded 0.2 percent lower at 0.9980, having touched a low of 0.9977 earlier, its weakest since Feb. 17. FxWirePro's Hourly Swiss Franc Strength Index stood at 26.89 (Neutral) by 1000 GMT. The pair should break above 1.0060 (support turned into resistance) for minor bullishness till 1.0110 (10- day MA). On the lower side, 0.9960 will be acting as immediate support and any break below will drag it down till 0.9908 (200- day MA).
AUD/USD: The Australian dollar eased after rising above the 0.7700 handle in the previous session as disappointing domestic jobs report weighed on Aussie bulls' sentiments. The major trades 0.35 percent down at 0.7681, drifting away from a high of 0.7719 touched on Wednesday, it’s highest since Feb. 24. FxWirePro's Hourly Aussie Strength Index stood at 53.91 (Bullish) by 1100 GMT. On the lower side, the next immediate support stands at 0.7660 (23.6% retracement of 0.74910 and 0.77193) and any break below will drag the pair down till 0.7605 (21- day EMA). The major resistance is around 0.7740 (Feb 23 high) and a break above will take it till 0.7800.
Equities Recap
European shares advanced to their highest level in 15 months following a rally in the basic resource and banking stocks, while the dollar steadied near a one-month low after the Fed hiked U.S. interest rates but signalled no pick-up in the pace of tightening.
The pan-European STOXX 600 index rallied 0.68 percent to 377.65 points, while the FTSEurofirst 300 index advanced 0.75 percent to 1,489.35 points.
Britain's FTSE 100 trades 0.94 percent up at 7,437.86 points, while mid-cap FTSE 250 added 0.43 percent to 19,045.10 points.
Germany's DAX edged up 1.04 percent at 12,134.88 points; France's CAC 40 trades 0.86 percent higher at 5,029.07 points.
Tokyo's Nikkei rallied 0.07 percent to 19,590.14 points, Australia's S&P/ASX 200 index rose 0.04 percent to 5,776.10 points and South Korea's KOSPI gained 0.79 percent to 2,133.78 points.
Shanghai composite index rose 0.8 percent to 3,268.94 points, while CSI300 index climbed 0.5 percent to 3,481.51 points. Hong Kong’s Hang Seng added 2.1 percent to 24,288.28 points.
Commodities Recap
Crude oil prices advanced, extending gains for the fourth consecutive session after official data showed U.S. stockpiles had eased from record highs. International benchmark Brent crude was trading 0.65 percent up at $52.34 per barrel by 0945 GMT, retreating from a low of $50.23 hit on Tuesday, its lowest since Nov. 30. U.S. West Texas Intermediate crude rallied 0.8 percent to $49.32 a barrel, after falling to a trough of $47.07 earlier in the week, its weakest since Nov end.
Gold prices rallied to a one-week high earlier in the day, as the dollar tumbled across the board after the Federal Reserve sounded less hawkish on further interest rate hikes this year. Spot gold gained 0.4 percent to $1,224.01 per ounce by 0952 GMT, having touched an early high of $1228.71, its highest since March 6. U.S. gold futures for April delivery were up 2.1 percent at $1,226.3 an ounce.
Treasuries Recap
The U.S. Treasuries slumped after the Federal Reserve Chair Janet Yellen delivered a 25 basis points rate hike in an overnight policy meeting, as was broadly anticipated by market participants. The yield on the benchmark 10-year Treasury jumped nearly 3 basis points to 2.53 percent, the super-long 30-year bond yield climbed nearly 4 basis points to 3.14 percent and the yield on short-term 2-year note traded 2 basis points higher at 1.34 percent.
The UK gilts traded nearly flat ahead of the Bank of England’s (BoE) monetary policy decision, scheduled to be held later today. The yield on the benchmark 10-year gilts, hovered around 1.22 percent, the super-long 30-year bond yields remained flat at 1.82 percent and the yield on the short-term 2-year traded around 0.06 percent.
German bunds plunged post steady Eurozone consumer price inflation in February. The yield on the benchmark 10-year bond, which moves inversely to its price, jumped 3 basis points to 0.44 percent, the long-term 30-year bond yields also climbed 3 basis points to 1.20 percent and the yield on the short-term 2-year bonds rose 1 basis point to -0.79 percent.
The Japanese government bonds gained ground, tracking firmness in the U.S. Treasuries after the Federal Reserve delivered a 25 basis points rate hike on Wednesday, in tandem with market pricing. Also the Bank of Japan (BoJ), in its 2-day monetary policy meeting that concluded on Thursday, kept its interest rate unchanged. The benchmark 10-year bond yield, plunged 2 basis points to 0.07 percent, the long-term 30-year bond yields slumped 3-1/2 basis points to 0.84 percent and the yield on the short-term 2-year note traded nearly 1 basis point lower at -0.25 percent.
The New Zealand bonds nose-dived, tracking weakness in the U.S. counterpart, with the 10-year yields sinking to over 2-week low after investors crowded demand in safe-haven assets, following lower-than-expected fourth-quarter gross domestic product (GDP). The yield on the benchmark 10-year bond, plunged 10 basis points to 3.28 percent, while the yield on 7-year note also slumped 10 basis points to 2.85 percent while the yield on short-term 2-year note dived 6-1/2 basis points to 2.12 percent.
The Australian bonds jumped as investors poured into safe-haven assets after reading the higher-than-expected unemployment rate for the month of February. The yield on the benchmark 10-year Treasury note, slumped 11-1/2 basis points to 2.82 percent, the yield on 15-year note also plunged nearly 11-1/2 basis points to 3.21 percent and the yield on short-term 2-year traded 7-1/2 basis points lower at 1.81 percent.
