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Europe Roundup: Sterling eases as Brexit deadline looms, euro rebounds on upbeat EZ Q4 GDP, investors await ECB policy meeting outcome - Thursday, March 7th, 2019

Market Roundup

  • Eurozone Q4 2018 employment overall final increase to 158895.4 person vs previous 158749.6 person
     
  • Eurozone Q4 2018 GDP revised yy decrease to 1.1 % (forecast 1.2 %) vs previous 1.2 %
     
  • Eurozone Q4 2018 GDP revised qq stays flat at 0.2 % (forecast 0.2 %) vs previous 0.2 %
     
  • Eurozone Q4 2018 employment final yy increase to 1.3 % (forecast 1.2 %) vs previous 1.2 %
     
  • Eurozone Q4 2018 employment final qq stays flat at 0.3 % (forecast 0.3 %) vs previous 0.3 %
     
  • Italy Jan 2019 retail sales nsa yy increase to 1.3 % vs previous -0.6 %
     
  • Italy Jan 2019 retail sales sa mm increase to 0.5 % vs previous -0.7 %
     
  • United Kingdom Feb 2019 Halifax house price 3m/yy increase to 2.8 % (forecast 1 %) vs previous 0.8 %
     
  • United Kingdom Feb 2019 Halifax house prices mm increase to 5.9 % (forecast 0.1 %) vs previous -3 % (revised from -2.9 %)

Economic Data Ahead

  • (0745 ET/1245 GMT) The European Central Bank will announce its interest rate decision.
     
  • (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased to a seasonally adjusted 225,000 for the week ended Mar. 2, while continuing claims for the week ended Feb. 23 is expected to decline to 1.775 million from a previous reading of 1.089 million.
     
  • (0830 ET/1330 GMT) The U.S. Labor Department will release labor costs report for the fourth quarter. The indicator is expected to nudge up 1.6 percent after posting a gain of 0.9 percent in the previous quarter.  
     
  • (0830 ET/1330 GMT) The U.S. Labor Department is likely to report that non-farm productivity edged higher 1.6 percent in the fourth quarter after rising to 2.3 percent in the previous quarter.
     
  • (0830 ET/1330 GMT) Statistics Canada is likely to report that building permits dropped 5.0 percent in January, compared to a rise of 6 percent in December.
     
  • (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending March 1.
     
  • (1400 ET/1900 GMT) The U.S. Federal Reserve is likely to report that consumer credit declined to $16.0 billion in January from $16.55 billion the month before.
     

Key Events Ahead

  • (0830 ET/1330 GMT) ECB President Mario Draghi releases the monetary policy statement and holds a press conference.
     
  • (0900 ET/1400 GMT) German Finance Minister Olaf Scholz talks about preparations for Brexit at a DHL hub in Leipzig
     
  • (1215 ET/1715 GMT) Federal Reserve Governor Lael Brainard participates in a lecture series at Princeton University in New Jersey
     
  • (1230 ET/1730 GMT) ECB executive board member Peter Praet participates in a conference in Paris
     
  • (1245 ET/1745 GMT) Bank of Canada's deputy governor Lynn Patterson speaks at an event in Hamilton
     

FX Beat

DXY: The dollar index eased as investors continued to digest soft U.S. economic data that showed goods trade deficit surged to a record high in 2018. The greenback against a basket of currencies traded 0.05 percent down at 96.82, having touched a high of 97.01 on Tuesday, its highest since February 19. FxWirePro's Hourly Dollar Strength Index stood at 78.08 (Slightly Bullish) by 1000 GMT.

EUR/USD: The euro rebounded from a 2-week low hit in the previous session after data showed Eurozone gross domestic product rose 0.2 percent quarter on quarter in the October-December period. However, the recovery appears fragile as investors remain cautious ahead of a European Central Bank meeting that is expected to slash growth forecasts and hint at a new round of ultra-cheap loans for eurozone banks. The European currency traded 0.1 percent up at 1.1312, having touched a low of 1.1285 the day before, its lowest since Feb. 19. FxWirePro's Hourly Euro Strength Index stood at -36.17 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1341 (Feb. 13 High), a break above targets 1.1371 (Feb. 20 High). On the downside, support is seen at 1.1275 (Feb. 19 Low), a break below could drag it till 1.1234 (Feb. 15 Low).

USD/JPY: The dollar slumped to a 6-day low against the Japanese yen as financial investors turned cautious about the outlook for global growth. The major was trading 0.1 percent down at 111.65, having hit a high of 112.13 on Tuesday, its highest since December 20.  FxWirePro's Hourly Yen Strength Index stood at 127.76 (Highly Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. unemployment benefit claims, consumer claims and Fed Brainard's speech. Immediate resistance is located at 112.20, a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 111.32 (Mar. 1 Low), a break below could take it lower at 110.66 (Feb.28 Low).

GBP/USD: Sterling eased, extending previous session losses, as investors waited for some clarity to emerge out of Brexit negotiations between Britain and the European Union. The major traded 0.1 percent down at 1.3158, having hit a low of 1.3097 on Tuesday; it’s lowest since Feb.26. FxWirePro's Hourly Sterling Strength Index stood at 24.16 (Neutral) 1000 GMT. Immediate resistance is located at 1.3254 (March 4 High), a break above could take it near 1.3288 (Feb.26 High). On the downside, support is seen at 1.3093 (Feb. 26 Low), a break below targets 1.3011 (Feb. 20 Low). Against the euro, the pound was trading 0.2 percent down at 86.00 pence, having hit a low of 86.45 on Tuesday, it’s lowest since Feb 26.

USD/CHF: The Swiss franc rose, retreating from a 2-week low touched in the previous session as investors awaited some kind of resolution to U.S.-China trade negotiations. The major trades 0.1 percent down at 1.0037, having touched a high of 1.0056 on Wednesday; it’s highest since February 19. FxWirePro's Hourly Swiss Franc Strength Index stood at -95.15 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0060 (February 19 High) and any break above will take the pair to next level till 1.0099 (February 11 High). The near-term support is around 1.0001 (February 19 Low), and any close below that level will drag it till 0.9983 (February 25 Low).

Equities Recap

European shares slumped, drifting further away from 5-month highs as investors cautiously prepared for the European Central Bank meeting

The pan-European STOXX 600 index slumped 0.4 percent at 374.09 points, while the FTSEurofirst 300 index declined 0.4 percent to 1,470.03 points.

Britain's FTSE 100 trades 0.5 percent down at 7,163.15 points, while mid-cap FTSE 250 eased 0.7 to 19,222.34 points.

Germany's DAX fell 0.5 percent at 11,525.11 points; France's CAC 40 trades 0.5 percent lower at 5,262.63 points

Commodities Recap

Crude oil prices surged to a near 1-week peak amid ongoing OPEC-led supply cuts and U.S. sanctions against exporters Venezuela and Iran, however, record U.S. crude output and rising commercial fuel inventories capped gains. International benchmark Brent crude was trading 1.1 percent up at $66.60 per barrel by 1027 GMT, having hit a high of $66.67, its highest since March 1. U.S. West Texas Intermediate was trading 0.8 percent higher at $56.60 a barrel, after rising as high as $57.85 on Friday, its highest since the November 16.

Gold prices slumped to a fresh 1-1/2 month low, as the greenback traded near its more than two-week high, while investors awaited European Central Bank's policy meeting due later in the day. Spot gold was 0.05 percent down at $1,285.89 per ounce by 1035 GMT, having touched a low of $1,280.57 earlier, its lowest since January 25. U.S. gold futures slipped 0.2 percent to $1,284.90 an ounce.

Treasuries Recap

The U.S. Treasuries traded tad higher during afternoon session ahead of the country’s weekly initial jobless claims data, scheduled to be released today by 13:30GMT, besides, the Q4 non-farm productivity, also due today. The yield on the benchmark 10-year Treasury yield slipped nearly 1 basis point to 2.684 percent, the super-long 30-year bond yields remained tad lower at 3.065 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points lower at 2.508 percent.

The German bunds remained flat during European session ahead of the European Central Bank’s (ECB) monetary policy meeting, due to be held today by 12:45GMT. The German 10-year bond yields, which move inversely to its price, hovered around 0.121 percent, the yield on 30-year note remained flat at 0.781 percent and the yield on short-term 2-year too remained barely changed at -0.518 percent.

The Australian government bonds surged during the Asian trading session after the country’s retail sales for the month of January missed market expectations, albeit showing an improvement from the prior reading in December last year. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 2.077 percent, the yield on the long-term 30-year bond also fell nearly 2 basis points to trade at 2.643 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at 1.677 percent.

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June 19 12:30 UTC Released

CACPI YY SA

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2.33 Percent

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2.11 Percent

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CACPI NSA

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136.6 Index

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136 Index

January 31 00:00 UTC 726602726602m

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January 22 19:00 UTC 738422738422m

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-1541 %

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January 22 19:00 UTC 738422738422m

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January 31 00:00 UTC 726602726602m

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Bln AR bln ARS

January 31 00:00 UTC 726602726602m

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Bln AR bln ARS

January 31 00:00 UTC 726602726602m

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