Market Roundup
- EUR/USD 0.36%, USD/JPY -0.22%, GBP/USD 0.01%, EUR/GBP 0.37%
- DXY -0.26%, DAX -0.11%, FTSE -0.72%, Brent -0.81%, Gold 0.41%
- Trump walks away from deal with N.Korea's Kim over sanctions demand
- Consumers, weak exports seen curbing U.S. fourth-quarter growth
- Britain's Labour Party leader backs Brexit referendum
- Swiss franc leads gains on weak China data, trade talk fears
- Great Britain Feb Nationwide house price yy, 0.4%, 0.4% f’cast, 0.1% prev
- Germany Jan Import Prices YY, 0.8%, 1.3% f’cast, 1.6% prev
- France Q4 GDP Detailed QQ, 0.3%, 0.3% f’cast, 0.3% prev
- France Jan Consumer Spending MM, 1.2%, 1.0% f’cast, -1.5% prev
- France Feb CPI (EU Norm) Prelim YY, 1.5%, 1.7% f’cast, 1.4% prev
Economic Data Ahead
- (0800 ET/1300 GMT) Germany reports its preliminary consumer price index for the month of February. The index is expected to edge up 0.5 percent, after falling 0.8 percent in the previous month. On an annualized basis, it is likely to rise 1.5 percent from 1.4 percent in January.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 4,000 to a seasonally adjusted 220,000 for the week ended Feb. 23, while continuing claims for the week ended Feb. 15 is expected to decline to 1.733 million from a previous reading of 1.725 million.
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that preliminary gross domestic product increased at an annual rate of 2.3 percent in the fourth quarter after expanding at a 3.4 percent pace in the third quarter.
- (0830 ET/1330 GMT) The U.S. Commerce Department releases the preliminary personal consumption expenditures (PCE) price index for the fourth quarter. The index rose 1.6 percent in the previous quarter, while core PCE also increased 1.6 percent in the same period.
- (0830 ET/1330 GMT) Statistics Canada releases its Raw Material Price Index for the month of January. The index posted a rise of 3.7 percent in December.
- (0830 ET/1330 GMT) Statistics Canada will report its industrial producer prices for the month of January. The indicator eased 0.7 percent in the prior month.
- (0830 ET/1330 GMT) Statistics Canada is likely to report that current account deficit widened to C$13.50 billion in the fourth quarter, compared with a deficit of C$10.34 billion in the previous quarter.
- (0945 ET/1445 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions rose to 57.0 in February from 56.7 last month
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending February 22.
- (1100 ET/1600 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of February. The indicator stood at 2 in the previous month.
Key Events Ahead
- (0800 ET/1300 GMT) Federal Reserve Vice Chairman Richard Clarida is scheduled to speak on "A View from the Federal Reserve Board" before the National Association for Business Economics' 35th Annual NABE Economic Policy Conference in Washington.
- (0850 ET/1350 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic participates in a discussion titled "The Economic and Housing Landscape: an Update" at the "Big Data, Big Money: Exploring Banking's Next Horizon" Conference hosted by the Federal Reserve Bank of Atlanta in Atlanta, Georgia.
- (1215 ET/1715 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on the economic outlook before the Philadelphia Inquirer 2019 Influence of Finance Awards in Philadelphia.
- (1300 ET/1800 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated question-and-answer session before the Real Estate Council of San Antonio in San Antonio, Texas.
- (1900 ET/0000 GMT) Federal Reserve Bank of Cleveland President Loretta Mester speaks on "Women in Economics" at the Second Annual Women in Economics Symposium hosted by the Federal Reserve Bank of St. Louis.
FX Beat
DXY: The dollar index slumped to a 3-week trough after the United States and North Korea failed to reach an agreement on denuclearisation of the Korean peninsula after two days of meetings. The greenback against a basket of currencies declined 0.3 percent at 95.85, having touched a low of 95.83 earlier, its lowest since February 5. FxWirePro's Hourly Dollar Strength Index stood at -4.80 (Neutral) by 1100 GMT.
EUR/USD: The euro rallied to an over 3-week peak as the greenback plunged amid growing cautiousness about a possible trade deal between Washington and Beijing. The European currency traded 0.4 percent up at 1.1417, having touched a high of 1.1418, its highest since Feb. 5. FxWirePro's Hourly Euro Strength Index stood at 80.65 (Slightly Bullish) by 1100 GMT. Immediate resistance is located at 1.1424 (Jan. 16 High), a break above targets 1.1443 (Jan. 28 High). On the downside, support is seen at 1.1335 (10-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar plunged, reversing some of its previous session losses, as weak Chinese factory data and lack of progress at U.S.-China trade talks stoked risk-averse sentiment across the financial markets. The major was trading 0.2 percent down at 110.75, having hit a low of 110.35 the day before, its lowest since February 15. FxWirePro's Hourly Yen Strength Index stood at -41.39 (Neutral) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, prelim gross domestic product and Fed Bostic's speech. 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 surged, extending gains for the fifth straight session, as traders bet Britain's departure from the European Union would be delayed. The major traded 0.1 percent up at 1.3317, having hit a high of 1.3350 on Wednesday; it’s highest since July 9. FxWirePro's Hourly Sterling Strength Index stood at 85.05 (Slightly Bullish) 1100 GMT. Immediate resistance is located at 1.3362 (July 9 High), a break above could take it near 1.3424 (June 12 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 0.4 percent down at 85.71 pence, having hit a high of 85.28 on Wednesday, it’s highest since May 2017
USD/CHF: The Swiss franc advanced to a near 4-week peak, as weak Chinese PMI data and concerns about the progress of U.S.-China trade talks dented investor risk appetite. The major trades 0.8 percent down at 0.9938, having touched a low of 0.9936 earlier; it’s lowest since February 1. FxWirePro's Hourly Swiss Franc Strength Index stood at 126.91 (Highly Bullish) by 1100 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 0.9921 (January 25 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares tumbled, extending previous session losses, as investors grew cautious about a possible trade deal between Washington and Beijing.
The pan-European STOXX 600 index plunged 0.4 percent at 370.97 points, while the FTSEurofirst 300 index slumped 0.3 percent to 1,459.07 points.
Britain's FTSE 100 trades 0.7 percent down at 7,060.94 points, while mid-cap FTSE 250 eased 0.5 to 19,061.99 points.
Germany's DAX declined 0.2 percent at 11,467.53 points; France's CAC 40 trades 0.1 percent lower at 5,218.27 points
Commodities Recap
Crude oil prices declined, weighed down by persisting U.S.-China trade tensions, signs of slowing in the Chinese economy and record U.S. production. International benchmark Brent crude was trading 0.4 percent down at $66.03 per barrel by 1115 GMT, having hit a low of $64.29 on Tuesday, its lowest since February 14. U.S. West Texas Intermediate was trading 0.7 percent lower at $56.55 a barrel, after falling as low as $55.00 on Tuesday, its lowest since the February 15.
Gold prices rebounded from a near two-week low touched in the previous session, as the dollar recouped losses after cautious comments from U.S. Trade Representative Robert Lighthizer dented hopes for a closure to the tariff war with China. Spot gold was trading 0.4 percent up at $1,325.26 per ounce at 1116 GMT, having touched a low of $1,316.76 per ounce on Wednesday, its lowest level since Feb. 15. U.S. gold futures were up 0.1 percent at $1,322.
Treasuries Recap
The U.S. Treasuries jumped during late European session ahead of the country’s Q4 2018 gross domestic product (GDP), scheduled for release today by 13:30GMT. The yield on the benchmark 10-year Treasury yield slumped 2 basis points to 2.674 percent, the super-long 30-year bond yields traded nearly 1-1/2 basis points lower at 3.056 percent and the yield on the short-term 2-year plunged nearly 2-1/2 basis points to 2.484 percent.
The German bunds remained tad lower during European session ahead of the country’s consumer price inflation (CPI) for the month of February, scheduled to be released today by 13:00GMT. The German 10-year bond yields, which move inversely to its price, remained 1/2 basis point higher at 0.159 percent, the yield on 30-year note hovered around 0.778 percent and the yield on short-term 2-year too traded flat at -0.546 percent.
The Japanese government bond yields slumped towards the end of Asian session, as investors’ risk appetite took a downturn ahead of a trade deal between the United States and China amid ongoing global economic and political uncertainties. 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 0.607 percent and the yield on short-term 2-year plunged 15 basis points to -0.149 percent.
The Australian government bond slumped during Asian trading session tracking a similar movement in the United States’ counterpart as investors remain optimistic on U.S.-China trade talk. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4 basis points to 2.105 percent, the yield on the long-term 30-year bond jumped 3 basis points to trade at 2.675 percent and the yield on short-term 2-year climbed 1/2 basis point to 1.713 percent.
