Market Roundup
- Italy Jan 2019 flash trade bal Non-EU decrease to -0.58 eur vs previous 4.28 eur
- Eurozone Feb 2019 selling price expectations decrease to 8.9 balance vs previous 10.7 balance (revised from 10.9 balance)
- Eurozone Feb 2019 consumer inflation expectations increase to 18 balance vs previous 15.5 balance
- Eurozone Feb 2019 industrial sentiment decrease to -0.4 balance (forecast 0.1 balance) vs previous 0.6 balance (revised from 0.5 balance)
- Eurozone Feb 2019 services sentiment increase to 12.1 balance (forecast 11 balance) vs previous 11 balance
- Eurozone Feb 2019 economic sentiment decrease to 106.1 (forecast 106 ) vs previous 106.3 (revised from 106.2 )
- Eurozone Feb 2019 business climate stays flat at 0.69 (forecast 0.6 ) vs previous 0.69
- Eurozone Feb 2019 consumer confidence Final stays flat at -7.4 balance (forecast -7.4 balance) vs previous -7.4 balance
- Eurozone Jan 2019 broad money increase to 12374319 eur vs previous 12373174 eur (revised from 12368206 eur)
- Eurozone Jan 2019 loans to non-fin decrease to 3.3 % vs previous 4 %
- Eurozone Jan 2019 loans to households decrease to 3.2 % vs previous 3.3 %
- Eurozone Jan 2019 Money-M3 annual growth decrease to 3.8 % (forecast 4 %) vs previous 4.1 %
- Italy Feb 2019 consumer confidence decrease to 112.4 (forecast 113 ) vs previous 113.9 (revised from 114 )
- Italy Feb 2019 manufacturing business confidence decrease to 101.7 (forecast 101.4 ) vs previous 102 (revised from 102.1 )
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Census Bureau reports its preliminary wholesale inventories for the month of December. The indicator posted a gain of 1.1 percent in November.
- (0830 ET/1330 GMT) The United States releases goods trade balance data for the month of December. The economy recorded a trade deficit of $70.48 billion in the previous month.
- (0830 ET/1330 GMT) The U.S. durable goods orders are expected to have increased 0.2 percent in January after rising 1.2 percent in November, while non-defense capital goods orders excluding aircraft fell 0.7 percent the prior month.
- (0830 ET/1330 GMT) Statistics Canada is expected to report that annual inflation rate rose 1.5 percent in January, compared to 2.0 percent in December.
- (1000 ET/1500 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 0.4 percent in January after declining 2.2 percent in December.
- (1000 ET/1500 GMT) The United States is likely to report that factory orders increased 0.5 percent in December, after posting a fall of 0.6 percent in the prior month.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 18.
Key Events Ahead
- (1000 ET/1500 GMT) U.S. Federal Reserve Chairman Jerome Powell is scheduled to testify before the House Financial Services Committee, discussing monetary policy and economy.
- N/A U.S. Trade Representative Robert Lighthizer will testify at a U.S. House of Representatives hearing on U.S.-China trade issues.
FX Beat
DXY: The dollar index plunged to a 3-week low on comments from Federal Reserve Chairman Jerome Powell about the central bank's stance to a more patient policy approach. The greenback against a basket of currencies trades 0.1 percent down at 95.93, having touched a low of 95.92, its lowest since February 5. FxWirePro's Hourly Dollar Strength Index stood at -95.44 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro rose, extending gains for the third straight session after data showed Eurozone economic sentiment came in at 106.1 points in February from an upwardly revised 106.3 in January but beating the forecast of 106.0. The European currency traded 0.05 percent up at 1.1392, having touched a high of 1.1402 on Tuesday, its highest since Feb. 6. FxWirePro's Hourly Euro Strength Index stood at -55.26 (Bullish) by 1000 GMT. Investors’ will continue to digest data out of Eurozone, ahead of U.S. wholesale inventories goods trade balance, durable goods, pending home sales, factory orders and Fed Chair Powel's testimony. 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 1.1349 (5-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar slumped to a near 2-week low, as news that Pakistan shot down two Indian jets in its territory sent investors seeking safety in safe-haven assets. The major was trading 0.1 percent down at 110.43, having hit a low of 110.35 earlier, its lowest since February 15. FxWirePro's Hourly Yen Strength Index stood at -88.51 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. wholesale inventories goods trade balance, durable goods, pending home sales, factory orders and Fed Chair Powel's testimony. Immediate resistance is located at 111.19 (Dec. 24 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 110.25 (Feb.15 Low), a break below could take it lower at 109.60 (Feb. 7 Low).
GBP/USD: Sterling rallied to a fresh 5-month high as investors bet that Britain could avoid a no-deal Brexit after Prime Minister Theresa May offered lawmakers the chance to vote on delaying Brexit and avoiding a no-deal departure from the European Union. The major traded 0.3 percent up at 1.3289, having hit a high of 1.3291 earlier; it’s highest since September 20. FxWirePro's Hourly Sterling Strength Index stood at 108.30 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.3314 (June 22 High), a break above could take it near 1.3362 (July 9 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 0.2 percent up at 85.73 pence, having hit a high of 85.62 on Tuesday, it’s highest since May 2017
USD/CHF: The Swiss franc surged to an over 3-week peak, as investors rushed out of riskier assets after Islamabad said it had carried out airstrikes in Indian-controlled Kashmir and shot down two Indian jets in its own airspace. The major trades 0.3 percent down at 0.9968, having touched a low of 0.9965 earlier; it’s lowest since February 11. FxWirePro's Hourly Swiss Franc Strength Index stood at -14.08 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0024 (February 22 High) and any break above will take the pair to next level till 1.0054 (February 18 High). The near-term support is around 0.9939 (January 23 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares tumbled, snapping a 3-day winning streak, while sterling rallied on speculation that Britain can avoid no-deal Brexit.
The pan-European STOXX 600 index plunged 0.6 percent at 371.54 points, while the FTSEurofirst 300 index slumped 0.6 percent to 1,460.39 points.
Britain's FTSE 100 trades 0.7 percent down at 7,100.54 points, while mid-cap FTSE 250 eased 0.7 to 19,145.34 points.
Germany's DAX declined 0.5 percent at 11,479.65 points; France's CAC 40 trades 0.2 percent lower at 5,226.66 points
Commodities Recap
Crude oil prices rose after a report showed a decline in the U.S. crude inventories and as producer cartel OPEC seemed to stick to its supply cuts despite pressure from U.S. President Donald Trump. International benchmark Brent crude was trading 0.05 percent up at $65.65 per barrel by 0941 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 $56.08 a barrel, after falling as low as $55.00 on Tuesday, its lowest since the February 15.
Gold prices eased as the greenback steadied near three-week lows after U.S. Federal Reserve Chairman Jerome Powell reiterated that the central bank will be patient in hiking interest rates. Spot gold was trading 0.2 percent down at $1,326.52 per ounce as of 0944 GMT, having touched a high of $1,346.61 per ounce last week, its highest level since April 20. U.S. gold futures were flat at $1,329.
Treasuries Recap
The U.S. Treasuries remained nearly flat during late European session ahead of Federal Reserve Chairman Jerome Powell’s scheduled second testimony on the economic outlook and recent monetary policy actions before the Joint Economic Committee, in Washington DC, due today at 15:00GMT. The yield on the benchmark 10-year Treasury yield remained flat at 2.636 percent, the super-long 30-year bond yields traded tad higher at 3.016 percent and the yield on the short-term 2-year too remained steady at 2.484 percent.
The United Kingdom’s gilts remained tad lower during the afternoon session, as investors have turned their bet towards higher chances of a rate hike by the Bank of England (BoE) after Prime Minister Theresa May, in her overnight speech, left the door open for a second Brexit referendum, thus leading to a rise in pound as well. The yield on the benchmark 10-year gilts, rose 1-1/2 basis points to 1.224 percent, the super-long 30-year bond yields remained tad higher at 1.752 percent and the yield on the short-term 2-year jumped nearly 2 basis points higher at 0.804 percent
The German bunds remained nearly flat during European session ahead of the country’s manufacturing PMI and unemployment change for the for the month of February, due to be released on March 1 by 08:55GMT. The German 10-year bond yields, which move inversely to its price, remained 1 basis point higher at 0.125 percent, the yield on 30-year note also edged 1 basis point higher at 0.753 percent and the yield on short-term 2-year traded flat at -0.549 percent.
The Japanese government bond yields plunged towards the end of Asian session, following a fall in the U.S. Treasury yields after Jerome Powell, Chair of the Federal Reserve stood by a patient stance to hike rates in the future despite his hopes of a sturdy economic growth through this year. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped nearly 2-1/2 basis points to -0.023 percent, the yield on the long-term 30-year hovered around 0.606 percent and the yield on short-term 2-year plunged 16 basis points to -0.160 percent.
The Australian government bond yields slumped during Asian trading session tracking a similar movement in the United States’ counterpart after Federal Reserve Chair Jerome Powell stressed on a 'patient' monetary policy stance despite expectations of a solid economic growth this year. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2-1/2 basis points to 2.068 percent, the yield on the long-term 30-year bond suffered nearly 2 basis points to trade at 2.628 percent and the yield on short-term 2-year plunged over 2-1/2 basis points to 1.711 percent
