Market Roundup
- EUR/USD -0.2%, USD/JPY -0.3%, GBP/USD -0.1%, DXY +0.1%
- DAX -0.6%, FTSE -0.8%, Brent -1.3%, Gold +0.1%, Copper -0.7%
- USD/JPY hits 4-month low on waning risk appetite
- LME copper hits near two-week low on Trump policy doubts
- EZ Jan S/A Current account balance 24.1bln vs previous 30.8bln
- ECB Villeroy: Clearly not the time to stop pursuing accommodative policies
- Markit UK Mar household finance index 45.3 vs 48.1 Feb, 40mth low
- UK households most downbeat about outlook since 2013 - Markit
- Swedish central bank says ultra-loose policy has had desired effect
- ZAR bucks softer EM bias as S.A Q4 C/A Def. narrows
Economic Data Ahead
- (0900 ET/1300 GMT) The Federal Housing Finance Agency releases its housing price index for the month of January. The index is expected to rise 0.4 percent after posting a similar gain in the previous month.
- (1000 ET/1400 GMT) National Association of Realtors is likely to report that U.S. existing home sales declined 2.0 percent to a 558,000 million units rate in February.
- (1000 ET/1400 GMT) Swiss National Bank releases its Quarterly Bulletin report.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending March 17.
- (1600 ET/2000 GMT) The Reserve Bank of New Zealand will announce its interest rate decision and release monetary policy statement.
- (1600 ET/2000 GMT) The Canadian government will release its second budget under Liberal Prime Minister Justin Trudeau.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade 30-year Fannie Mae/Freddie Mac (max $1.15 bn)
FX Beat
DXY: The dollar tumbled to a 4-month low against the yen as investors rushed towards safe havens on concerns about President Trump's economic growth agenda. The greenback against a basket of currencies traded 0.1 percent up at 99.84, having hit a low of 99.62 earlier, its lowest since Feb. 6. FxWirePro's Hourly Dollar Strength Index stood at -47.95 (Neutral) by 1000 GMT.
EUR/USD: The euro eased, retreating from a 6-week high following dovish comments from ECB governing council member Villeroy, stating that accommodative policy is still needed. Moreover, worse-than-expected Eurozone current account data, which came in at EUR 24.1 billion in January undermined the bid tone around the major. The European currency traded 0.2 percent lower at 1.0787, having touched a high of 1.0819 on Tuesday, its highest since Feb. 2. FxWirePro's Hourly Euro Strength Index stood at -16.33 (Neutral) by 1000 GMT. Any break above 1.0828 will take the pair till 1.08735 in the short term. On the lower side, any break below 1.07890will drag it till 1.0749 (61.8% retracement of 1.0706 and 1.08193)/1.07189 (Mar 20th low).
USD/JPY: The dollar tumbled to a fresh 4-month low as persistent weakness in the U.S. Treasury yields, amid widespread risk aversion boosted the Japanese yen. Moreover, the yen was also supported by better-than-expected Japan’s trade balance report, which showed the economy posted the largest trade surplus in seven years in February. The major traded 0.4 percent lower at 111.26, having hit a low of 111.14 earlier, its lowest since Nov. 23. FxWirePro's Hourly Yen Strength Index stood at 75.60 (Slightly Bullish) by 1000 GMT. On the higher side, any break above 112 (support turned into resistance) will take the pair till 113.47 (21- day EMA)/114.30. The near term support is around 111 and any break below will drag it till 110.
GBP/USD: Sterling declined after rising to a near 4-week high above the 1.2500 handle as speculation that the Bank of England will raise rates within the next year eased. The major weakened despite broad base U.S. dollar weakness as investors remained concerned about a Brexit-driven slowdown in the UK economy. Sterling trades 0.1 percent down at 1.2459, having hit a high of 1.2505 earlier in the day, its highest since Feb. 24. FxWirePro's Hourly Sterling Strength Index stood at 51.92 (Bullish) by 1000 GMT. The pair is facing strong resistance around 1.2520 and any break above will take the pair till 1.2580. On the lower side, near term support is around 1.2450 and any break below targets 1.2409 (23.6% retracement of 1.2109 and 1.25059)/1.2345/1.2320 level. Against the euro, the pound traded flat at 86.59 pence, having hit an early high of 86.43, its highest since Mar 7.
USD/CHF: The Swiss franc rose to a 6-week high as investors sought safe havens on growing doubts about U.S. President Donald Trump's economic plans. The major traded 0.06 percent lower at 0.9933, hovering towards an early low of 0.9911, its weakest since Feb. 7. FxWirePro's Hourly Swiss Franc Strength Index stood at 26.38 (Neutral) by 1000 GMT. On the lower side, major support is around 0.9915 and any close below will drag the pair till 0.9860 (Jan 31st low)/ 0.97850 (61.8% retracement of 0.95370 and 1.01700). The near term resistance is around 0.9960 (support turned into resistance) and any break above will take the pair till 1.000/1.0040 (10- day MA)/1.0060.
AUD/USD: The Australian dollar slumped, extending previous session losses as a fresh wave of risk-aversion in the FX market drove investors towards safe-haven assets. Moreover, weaker commodity prices, especially copper and crude oil undermined the bid tone around the major. The Aussie trades 0.4 percent down at 0.7656, having hit a low of 0.7639 earlier in the session, it’s lowest since Mar. 15. FxWirePro's Hourly Aussie Strength Index stood at -26.94 (Neutral) by 1000 GMT. On the lower side, the next immediate support stands at 0.7635 (21- day EMA) and any break below will drag the pair down till 0.7556 (100- day EMA). The major resistance is around 0.7750 (Feb 23 high) and a break above will take the pair till 0.7800.
Equities Recap
European shares declined in early deals, weighed down by basic resources and banks stocks, while the dollar hit a four-month low against the yen on growing doubts that President Trump will be able to deliver on a promise of tax cuts.
The pan-European STOXX 600 index tumbled 0.8 percent to 372.67 points, while the FTSEurofirst 300 index declined 0.75 percent to 1,469.85 points.
Britain's FTSE 100 trades 0.88 percent down at 7,313.55 points, while mid-cap FTSE 250 shed 1.16 percent to 18,767.46 points.
Germany's DAX edged down 0.72 percent at 11,876.22 points; France's CAC 40 trades 0.77 percent lower at 4,964.09 points.
Tokyo's Nikkei fell 2.13 percent to 19,041.38 points, Australia's S&P/ASX 200 index eased 1.58 percent to 5,683.40 points and South Korea's KOSPI plunged 0.46 percent to 2,168.30 points.
Shanghai composite index declined 0.5 percent to 3,245.22 points, while CSI300 index dropped 0.5 percent to 3,450.05 points. Hong Kong’s Hang Seng shed 1.1 percent to 24,320.41 points.
Commodities Recap
Crude oil prices declined to a 1-week low as U.S. crude oil inventories rose by 4.5 million barrels last week to 533.6 million barrels, which added to an ongoing global fuel supply overhang. International benchmark Brent crude was trading 0.6 percent down at $50.51 per barrel by 0916 GMT, having hit a trough of $50.42 earlier, its lowest since Mar. 14. U.S. West Texas Intermediate crude fell 0.6 percent to $47.83 a barrel, after falling to an early low of $47.75, its weakest since Mar. 14.
Gold prices rallied to a fresh three-week high as investors sought safe havens on growing doubts about U.S. President Donald Trump's economic plans. Spot gold rose 0.2 percent to $1,246.92 per ounce by 0927 GMT, after rising as high as $1,248.98 earlier, its strongest since March 2. U.S. gold futures were firm at $1,246.30 per ounce.
Treasuries Recap
The U.S. Treasuries recovered ahead of the Chicago Federal Reserve President Charles Evans scheduled speech for the day. The yield on the benchmark 10-year Treasury fell 3 basis points to 2.40 percent, the super-long 30-year bond yield slumped 3-1/2 basis points to 3.01 percent and the yield on short-term 2-year note traded 1-1/2 basis points lower at 1.25 percent.
The UK gilts climbed as investors wait to watch the February retail sales data and the Bank of England (BoE) member Broadbent’s speech, scheduled to be held on March 23. The yield on the benchmark 10-year gilts, plunged nearly 5 basis points to 1.20 percent, the super-long 30-year bond yields slumped over 4 basis points to 1.78 percent and the yield on the short-term 2-year traded 2 basis points lower at 0.12 percent.
The German bunds witnessed a sharp rebound, following expectations of a modest drop in the country’s manufacturing Purchasing Managers’ Index (PMI) from the month of March. The yield on the benchmark 10-year bond, slumped 3-1/2 basis points to 0.42 percent, the long-term 30-year bond yields plunged 5 basis points to 1.14 percent and the yield on short-term 2-year bond also traded 1-1/2 basis points lower at -0.74 percent.
The New Zealand bonds closed tad higher as investors largely shrugged-off the sharp rebound in global dairy prices at the overnight GlobalDairyTrade price auction. The yield on the benchmark 10-year bond, which moves inversely to its price closed flat at 3.25 percent, the yield on 7-year note slipped nearly 1 basis point to 2.82 percent while the yield on short-term 2-year note traded 1/2 basis points higher at 2.12 percent.
The Australian bonds jumped, tracking firmness in the U.S. counterparts amid a session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note, slumped 6 basis points to 2.76 percent, the yield on 15-year note nose-dived 6-1/2 basis points to 3.14 percent and the yield on short-term 2-year traded 3 basis points lower at 1.78 percent.
