Menu

Search

  |   Market Roundups

Menu

  |   Market Roundups

Search

Europe Roundup: Sterling off 2-week peak despite upbeat economic data, dollar eases as U.S. Treasury yields slide, European shares down amid risk-off sentiment - Friday, February 24th, 2017

Market Roundup

  • EUR/USD +0.1%, USD/JPY -0.2%, GBP/USD +0.1%, DXY -0.2%,      
     
  • DAX -1.2%, CAC -1.1%, Brent -0.6%, Gold +0.6%, Copper +0.6%
     
  • Dollar slips, set for the first week of falls in three
     
  • China says has no intention of using currency devaluation to its advantage
     
  • Germany says unsure of Trump trade stance, but keen for US talks
     
  • Macron seen beating Le Pen in second round with 61 pct of vote - Opinionway poll
     
  • Greek PM Tsipras: Greek bailout review must be concluded by Mar 20
     
  • May's Conservatives gain UK parliament seat as rivals suffer setbacks
     
  • Great Britain Jan BBA Mortgage approvals 44.657k vs previous 43.581k revised
     
  • Swedish Feb inflation expectations jump to 2.7% 12month vs 2.2% in Jan
     
  • Swedish Feb Consumer confidence 104.5 pts vs previous 104.6. 104.1 pts forecast
     
  • Swedish Feb overall sentiment index 111.6 pts
     

Economic Data Ahead

  • (0830 ET/1330 GMT) The Statistics Canada is expected to report that annual inflation rate rose 1.6 percent in January from 1.2 percent in December, bringing it closer to the Bank of Canada’s 2 percent target. While core consumer price index is likely to rise 0.3 percent from -0.2 percent recorded in the prior month.
     
  • (0900 ET/1400 GMT) Mexican retail sales are likely to have gained 0.3 percent in December after rising 1.0 percent in the previous month.
     
  • (1000 ET/1500 GMT) The U.S. new home sales are expected to have rebounded 6.3 percent to a 593,000 units rate in January, after declining 10.4 percent in December.
     
  • (1000 ET/1500 GMT) The University of Michigan is likely to report that U.S. consumer sentiment index rose to 96.0 in February, compared with a preliminary reading of 95.7.
     
  • (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count. 
     

Key Events Ahead

  • (1145 ET/1645 GMT) FedTrade operation 30-year Ginnie Mae (max $1.150 bn)

FX Beat

DXY: The dollar slumped to a 2-week low versus the Japanese yen, as a continuous slide in the U.S. Treasury bond yields and growing uncertainty over the Trump administration triggered a fresh bout of risk aversion. The greenback against a basket of currencies traded 0.1 percent down at 100.89, having hit a low of 100.82 earlier, it’s weakest since Feb. 20. FxWirePro's Hourly Dollar Strength Index stood at -119.72 (Highly Bearish) by 1000 GMT.

EUR/USD: The euro rose above the 1.0600 handle as persistent weakness in the greenback boosted the bid tone around the major. However, it failed to benefit from the ongoing dollar weakness as political uncertainty in France continued to weigh on market sentiment. The European currency traded 0.1 percent up at 1.0590, having hit a low of 1.0493 on Wednesday, it’s lowest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at 3.58 (Neutral) by 1000 GMT. The intraday trend is slightly weak as long as resistance 1.0680 holds and any violation above will take the pair till 1.07200/1.0745/1.0800. On the lower side, any break below the low made on Feb 22nd at 1.04938 will drag it down till 1.04550/1.03450.

USD/JPY: The dollar tumbled to a fresh 2-week low below the 112.50 level, weighed down by diminishing optimism surrounding the U.S President Donald Trump's proposed fiscal policies and fading prospects of a Fed rate hike at the upcoming meeting in March. Moreover, prevalent cautious investors' sentiment surrounding European equity markets also boosted the Japanese Yen's safe-haven appeal. The pair trades 0.2 percent lower at 112.35, having hit low of 112.34 earlier in the session, its lowest since Feb. 9. FxWirePro's Hourly Yen Strength Index stood at 124.92 (Highly Bullish) by 1000 GMT. The minor resistance is around 113.80 and any break above will take the pair till 114.30 (61.8% retracement of 118.61 and 111.59)/114.95 (Feb 15 high). On the lower side, minor support is around 112 and any break below 112 will drag it till 111.66.

GBP/USD: Sterling eased after rising to a fresh 2-week high earlier in the session, as the differential between the 10-year UK Gilts yields and treasury yields supported the U.S. dollar. Markets seem to have ignored UK BBA mortgage approvals data, which arrived at 44.7k versus 42k expectations as concerns surrounding the Article 50 trigger weakened the bid tone around the British currency. Sterling trades lower at 1.2549, having hit an early high of 1.2569, its strongest since Feb. 9. FxWirePro's Hourly Sterling Strength Index stood at 44.00 (Neutral) by 1000 GMT. On the lower side, major weakness can be seen only below 1.2400 and any violation below will drag the pair down till 1.23450 (50% retracement of 1.19860 and 1.27060). Any break below 1.23450 confirms further weakness, a decline till 1.2260/1.2200 is likely. The minor trend reversal can happen only above that 1.2580 level and any break above will take the pair till 1.2705 (Feb 2 high)/1.27750 (Dec 6 high). Against the euro, the pound trades 0.10 percent lower at 84.34 pence, having hit a 2-month high of 84.02 on Wednesday.

USD/CHF: The Swiss franc edged up, extending previous session gains, as the greenback continued to decline after the Federal Reserve meeting minutes disappointed dollar bulls.  The major trades 0.07 percent down at 1.0055, drifting away from a high of 1.0140 touched on Wednesday, its highest since Jan 12. FxWirePro's Hourly Swiss Franc Strength Index stood at 33.06 (Neutral) by 1000 GMT. Any break above 1.01600 confirms minor bullishness, a jump till 1.02480 is likely. On the lower side, major support is around 1.0040 and any break below targets 1.000 (daily Kijun- Sen)/0.9960 (Feb 17 low)/0.9927 (Feb 8 low).

AUD/USD: The Australian dollar eased, retreating from a near three-month peak after comments from Reserve Bank of Australia Governor Phillip Lowe dampened expectations of further interest rate cut action. Moreover, weak sentiment surrounding commodity space and equity markets triggered a fresh bout of risk-off market profile, which dragged the major lower.  The major trades 0.2 percent down at 0.7698, having hit a high of 0.7740 in the previous session, its highest since Nov. 10 FxWirePro's Hourly Aussie Strength Index stood at -78.66 (Bearish) by 1000 GMT. On the lower side, the major support stands at 0.7638 (21- day EMA) and any break below will drag the pair down till 0.7555 (55- day EMA)/0.7515/0.74450 (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 tumbled following an underwhelming earnings update from a German chemical company, while the dollar was poised for weekly losses as uncertainties surrounding U.S. President Donald Trump's policies triggered risk-off sentiment.

The pan-European STOXX 600 index decreased 0.34 percent to 371.59 points, while the FTSEurofirst 300 index eased 0.37 percent to 1,464.74 points.

Britain's FTSE 100 trades 0.19 percent down at 7,257.88 points, while mid-cap FTSE 250 added 0.06 percent to 18,655.50 points.

Germany's DAX declined 0.36 percent at 11,906.46 points; France's CAC 40 trades 0.57 percent lower at 4,863.53 points.

Tokyo's Nikkei eased 0.45 percent to 19,283.54 points, Australia's S&P/ASX 200 index fell 0.81 percent to 5,738.00 points and South Korea's KOSPI dropped 0.64 percent to 2,094.12 points.

Shanghai composite index rose 0.1 percent to 3,253.43 points, while CSI300 index gained 0.02 percent to 3,473.85 points. Hong Kong’s Hang Seng shed 0.6 percent to 23,965.70 points.

Commodities Recap

Crude oil prices declined, reversing most of its previous session gains after official data released late on Thursday showed U.S. crude inventories rose by 564,000 barrels last week for a seventh straight week. International benchmark Brent crude was trading 0.53 percent down at $56.15 per barrel by 0926 GMT, having hit a peak of $57.23 on Thursday. U.S. West Texas Intermediate crude fell 0.5 percent at $54.05 a barrel, after gaining 1.6 percent in the previous session.

Gold prices rose to their highest level in about 3-1/2-months, as uncertainties surrounding U.S. President Donald Trump's policies and elections in Europe strengthened the metal's safe-haven appeal. Spot gold was up 0.6 percent at $1,256.41 per ounce at 0935 GMT, after hitting its highest since Nov. 11 at $1,256.45 earlier. U.S. gold futures edged higher 0.3 percent to $1,255.

Treasuries Recap

The 10-year U.S treasury yield stood at 2.3685 percent lower by 0.02 bps, while 5-year yield was down by 0.02 bps at 1.8569 percent.

The German short-dated government bond yields fell to fresh record lows and were set to end a stellar week with their biggest weekly drop since the euro debt crisis in 2012. The 10-year Bund yield fell 2 basis points to a five-week low around 0.21 percent, pushing the gap with Italian peers close to three-year highs above 200 basis points. French 10-year bond yields on track for their biggest weekly fall in two months, while Dutch 10-year bond yields fell to 0.36 percent, their lowest level in almost two months.

The Japanese government bond prices gained, supported by a regular Bank of Japan buying operation, with the yield curve at its flattest in three weeks. The benchmark 10-year JGB yield fell a basis point to 0.065 percent, its lowest in a month, while the 30-year yield fell 4 basis points to 0.810 percent. The yield curve flattened as a result, with the 10-year/30-year yield spread at its tightest in three weeks.

The Australian government bond futures rallied, with the 3-year bond contract up 4 ticks at 98.010. The 10-year contract gained 5.5 ticks to 97.2400 while the 20-year contract added 5.5 ticks to 96.3600. The New Zealand government bonds gained, sending yields 4.5 basis points lower at the long end of the curve.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.