Market Roundup
- EUR/USD -0.4%, USD/JPY +0.8%, GBP/USD -0.1%, DXY +0.7%
- DAX +1.4%, CAC +1.45%, Brent +0.5%, Gold -0.2%, Copper +1.7%
- Dollar Index hits 7-week high at 101.78. +0.7%
- Dollar surges as Fed speakers raise hopes of March hike
- Eurozone Feb Markit Mfg final PMI 55.4 vs previous 55.5. 55.5 forecast
- German state CPIs quite a way above last month's y/y reads
- Germany Feb adjusted jobless total falls by 14,000 to 2.592million in Feb
- Great Britain Feb Nationwide house prices 0.6% m/m, 4.5% y/y. 0.2%/4.0% forecast
- Great Britain Jan BOE consumer credit +1.416bln vs previous +0.984bln revised 1.2bln forecast
- Great Britain Jan Mortgage lending +3.379bln vs previous +3.693bln revised 3.7bln forecast
- Great Britain Jan Mortgage approvals 69.928k vs previous 68.266k revised 68.650k forecast
- Great Britain Jan M4 money supply +0.9% vs previous -0.5%
- Great Britain Feb Markit/CIP Manufacturing PMI 54.6 vs previous 55.9. 55.6 forecast
- Swiss Jan UBS consumption indicator 1.43 vs previous 1.38 revised
- Swiss Feb Manufacturing PMI 57.8 vs previous 54.6. 55.6 forecast
- Swedish central bankers divided over rate path - minutes
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Commerce Department releases personal income figures for January, which is expected to rise 0.3 percent after posting a similar gain in the previous month.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of January. The index stood at 0.2 percent in the prior month, while core PCE is likely to have increased 0.2 percent in January after edging up 0.1 percent in the previous month.
- (0830 ET/1330 GMT) The U.S. Personal spending is likely to rise 0.3 percent in the month of January after surging 0.5 percent in December.
- (0830 ET/1330 GMT) The Statistics Canada reports its current account figures for the fourth quarter. The economy posted a deficit of C$18.30 billion in the third quarter.
- (0930 ET/1430 GMT) The RBC will release Canada's Manufacturing PMI for the Month of February. The indicator stood at 53.5 in the prior month.
- (0945 ET/1445 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of February. The index showed a final reading of 54.3 in the previous month.
- (1000 ET/1500 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. manufacturing Purchasing Managers' index rose to 55.7 in February from 56.0 in January.
- (1000 ET/1500 GMT) The Commerce Department is likely to report that U.S. construction spending increased 0.6 percent in January after falling 0.2 percent in the previous month.
- (1000 ET/1500 GMT) Bank of Canada will meet to announce its benchmark interest rate, where it is expected to hold interest rates at 0.50 percent.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 24.
- (1400 ET/1900 GMT) The Fed issues its Beige Book, a summary of anecdotes on the health of the economy.
- N/A Autodata Corp is expected to report that U.S. auto sales figures dropped to 17.70 million units in January from 17.61 million units in December.
- (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending February 24.
- (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending February 24.
Key Events Ahead
- (1145 ET/1645 GMT) FedTrade operation 30-yr Ginnie Mae (max $1.325 bn)
- (1300 ET/1800 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated Q&A session before the "Dialogue with the Fed" event hosted by Paul Quinn College, in Dallas, Texas.
- (1800 ET/2300 GMT) Federal Reserve Board Governor Lael Brainard speaks on the economic outlook and monetary policy before the Malcolm Wiener Lecture in International Political Economy event hosted by the John F. Kennedy School of Government at Harvard University, in Cambridge, Massachusetts.
FX Beat
DXY: The dollar rallied across the board on the back of growing chances of a Fed interest rate hike this month and U.S. President Trump's announcement of a $ 1 trillion infrastructure program. The greenback against a basket of currencies traded 0.3 percent up at 101.71, having hit an early high of 101.78, it’s strongest since Feb. 15. FxWirePro's Hourly Dollar Strength Index stood at 96.47 (Highly Bullish) by 1100 GMT.
EUR/USD: The euro fell to a 1-week low as the dollar strengthened after Federal Reserve policymakers boosted expectations of a rate hike this month. The selling pressure around the major intensified after data showed Eurozone's Markit manufacturing PMI edged down to 55.4 from 55.5 in February, indicating that business sentiment weakened in the same period. The European currency traded 0.4 percent down at 1.0534, having hit a low of 1.0525, it’s lowest since Feb. 20. FxWirePro's Hourly Euro Strength Index stood at 41.36 (Neutral) by 0900 GMT. On the lower side, next immediate support stands at 1.0520 and any break below targets 1.04935 (Feb 22 low)/1.04530 (Jan 11 low)/1.03400. The short term bearish invalidation is only above 1.0680.
USD/JPY: The dollar rallied to a 1-week peak above the 113.50 level after the U.S. President Donald Trump pledged $1 trillion of infrastructure spending in his first speech to Congress. Moreover, increasing expectations for a March interest rate hike and higher U.S. Treasury yields boosted the bid tone around the greenback. The major trades 0.8 percent higher at 113.64, having hit high of 113.67 earlier, its highest since Feb. 22. FxWirePro's Hourly Yen Strength Index stood at -96.52 (Slightly Bearish) by 0900 GMT. The minor resistance is around 113.78 (Feb 21st high) and any break above will take the pair till 114.30 (61.8% retracement of 118.61 and 111.59)/114.95 (Feb 15th high). On the lower side, minor support is around 112.90 (200- H MA) and any break below 112.90 will drag it till 112/111.65.
GBP/USD: Sterling slumped to multi-week lows as slightly weaker than expected manufacturing PMI and a broadly stronger dollar weighed on the British currency. Markets seem to have ignored better than expected M4 Money Supply figures, which expanded at an annualized 7.0 percent, while net lending to individuals rose to £4.8 billion in January. The major trades 0.1 percent lower at 1.2370, having hit a low of 1.2349 earlier, its weakest since Feb. 07. FxWirePro's Hourly Sterling Strength Index stood at -10.26 (Neutral) by 0900 GMT. On the lower side, major weakness can be seen only below 1.23450 (Feb 7th low) and any violation below will drag the pair down till 1.2260/1.2200 likely. The minor intraday bullishness can happen only above 1.2380 (daily Tenken-Sen and resistance turned into support) and any break above will take it till 1.2410 (daily Kijun-Sen)/1.2450 (200- H MA). Against the euro, the pound trades 0.2 percent up at 85.20 pence, having hit a 1-week low of 85.49 the day before.
USD/CHF: The Swiss franc declined, reversing most of its previous session gains, as the dollar rallied across the board following hawkish Fed policymakers comments and U.S. President Trump’s pro-growth comments. The major trades 0.3 percent higher at 1.0087, having hit an early high of 1.0108, its strongest since Feb. 23. FxWirePro's Hourly Swiss Franc Strength Index stood at 27.37 (Neutral) by 0900 GMT. The pair has formed a temporary top around 1.01405 and any minor bullishness can be seen above that level. Any break above targets 1.0160 (61.8% retracement of 1.03436 and 0.98696)/1.0200. On the lower side, 1.0065 (200- HMA) will be acting as major intraday support and any break below will drag it till 1.000/0.9965 (Feb 16th low).
AUD/USD: The Australian dollar edged up after data showed the economy grew 1.1 percent in the fourth quarter from the third, surpassing expectations of a 0.7 percent rise. However, the major trimmed gains as the greenback rebound against its major peers on the back of rallying treasury yields and increasing Fed interest rate hike expectations. The Aussie trades up at 0.7660, having touched a low of 0.7636 earlier, it’s lowest since Feb. 15. FxWirePro's Hourly Aussie Strength Index stood at -13.65 (Neutral) by 0900 GMT. On the lower side, the major support stands at 0.7603 (23.6% retracement of 0.71599 and 0.7740) and any break below will drag the pair down till 0.7565 (55- day EMA)/0.7500 (50- day MA)/0.74450 (Jan 13th low). The major resistance is around 0.77497 (161.8% fibo) and a break above will take it till 0.77783 (Nov 8th high)/0.7800.
Equities Recap
European shares advanced after U.S. President Donald Trump pledged $1 trillion of infrastructure spending in his first speech to Congress.
The pan-European STOXX 600 index increased 1.0 percent to 374.00 points, while the FTSEurofirst 300 index rallied 1.0 percent to 1,473.92 points.
Britain's FTSE 100 trades 0.71 percent higher at 7,315.25 points, while mid-cap FTSE 250 added 0.1 percent to 18,791.20 points.
Germany's DAX edged up 1.25 percent at 11,981.79 points; France's CAC 40 trades 1.31 percent higher at 4,922.20 points.
Tokyo's Nikkei rose 1.44 percent to 19,393.54 points, Australia's S&P/ASX 200 index fell 0.8 percent to 5,695.50 points.
Shanghai composite index gained 0.2 percent to 3,246.93 points, while CSI300 index advanced 0.2 percent to 3,458.44 points. Hong Kong’s Hang Seng added 0.2 percent to 23,776.49 points.
Commodities Recap
Crude oil prices rose, extending gains for the third consecutive session, as OPEC production cuts continued to support traders’ sentiment, while investors in the fuel market await weekly inventories data from the U.S. Energy Information Administration due later in the day. International benchmark Brent crude was trading 0.5 percent up at $56.78 per barrel by 0945 GMT, having hit a low of $55.60 on Tuesday, its lowest since Feb. 17. U.S. West Texas Intermediate crude gained 0.5 percent to $54.25 a barrel, after falling to a trough of $54.20, its weakest since Feb. 17.
Gold prices slumped, hitting a 1-week low as the dollar strengthened across the board after comments from U.S. Federal Reserve officials boosted expectations of a rate hike in March. Spot gold declined 0.3 percent to $1,244.61 per ounce by 0948 GMT, having hit its lowest since Feb. 23 at $1,242.44 earlier. U.S. gold futures fell 0.8 percent to $1,244.30.
Treasuries Recap
The U.S. Treasuries dived ahead of Federal Open Market Committee (FOMC) member Kaplan’s scheduled speech later in the day. The yield on the benchmark 10-year Treasury jumped 6 basis points to 2.42 percent, the super-long 30-year bond yield surged 5 basis points to 3.01 percent and the yield on short-term 2-year note also bounced 7 basis points to 1.28 percent.
The UK gilts plunged after investors largely shrugged off lower-than-expected manufacturing Purchasing Managers’ Index (PMI) for the month of February. The yield on the benchmark 10-year gilts, jumped nearly 3-1/2 basis points to 1.18 percent, the super-long 30-year bond yields also rose 1-1/2 basis points to 1.75 percent and the yield on the short-term 2-year traded higher by nearly 2-1/2 basis points at 0.12 percent.
The German government bunds plunged, following expectations of a rebound in eurozone's consumer price inflation (CPI), scheduled to be released on Thursday. The yield on the benchmark 10-year bond, jumped 2-1/2 basis points to 0.23 percent, the long-term 30-year bond yields also jumped nearly 3 basis points to 1.02 percent while the yield on short-term 2-year bond moved higher by nearly 1 basis point to -0.89 percent.
The Japanese government bonds slumped as investors remain cautious ahead of the 10-year auction scheduled to be held on March 2. The benchmark 10-year bond yield, rose 1 basis point to 0.06 percent, the long-term 30-year bond yields jumped nearly 3-1/2 basis points to 0.83 percent and the yield on the short-term 3-year note remained traded 1 basis point higher at -0.18 percent.
The New Zealand government bonds declined as investors remained sidelined in a subdued session that witnessed data of little economic significance. The yield on the benchmark 10-year bond, rose 1 basis point to 3.32 percent at the time of closing, the yield on 7-year note jumped nearly 2-1/2 basis points to 2.87 percent and the yield on short-term 2-year note traded 1 basis point higher at 2.21 percent.
The Australian 10-year government bond yields hit a 1-week high, after reading strong Q4 gross domestic product (GDP) of the country, widely beating what markets had initially anticipated. The yield on the benchmark 10-year Treasury note, jumped nearly 7 basis points to 2.81 percent, the yield on 15-year note also surged nearly 7 basis points to 3.24 percent and the yield on short-term 2-year rose 3-1/2 basis points to 1.86 percent.
