Market Roundup
- EUR/USD +0.5%, USD/JPY flat, GBP/USD +0.9%, DXY -0.5%
- DAX +0.1%, CAC +0.3%, Brent +0.7%, Gold -0.1%, Copper -0.8%
- Dollar index dips below 100, first time since early Feb
- Euro briefly tops $1.08 after French presidential debate
- Macron still odds-on to win French presidency
- UK Feb CPI +2.3% y/y vs +2.1% forecast. Highest y/y rate since Sept 2013
- UK Feb PPI core output 0.0% m/m, +2.4% y/y vs previous 0.5%/2.5% revised 0.2%/2.5% forecast
- UK Feb PSNB 1.083bln vs previous -11.72bln revised 2.500bln forecast
- UK Feb PSNCR 12.875bln vs previous -22.74bln revised
- Swiss Feb Trade surplus narrows to 3.3bln vs revised 4.83bln
- Swiss economy estimated to grow 1.6% in 2017 vs 1.8% previous forecast - SECO
- Swiss government sees 2017 inflation at 0.5% vs 0.0% previous forecast
- Greece won't last in euro zone in long-run - Bavarian finmin
- Japan Aso: G20 accept importance of free trade
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department is likely to report that current account deficit widened to $128.2 billion in the fourth quarter after contracting to $113.0 billion in the previous quarter.
- (0830 ET/1230 GMT) Statistics Canada is expected to report that retail sales gained 1.0 percent in January after falling 0.5 percent in December. While excluding autos, retail sales are likely to have risen 1.1 percent, after easing 0.3 percent in the previous month.
- (0830 ET/1230 GMT) Federal Reserve Bank of Philadelphia releases non-manufacturing business outlook survey for the month March.
- (1000 ET/1400 GMT) The Conference Board releases China's Leading Economic Index for the month of February. The index stood at 1.1 percent in the previous month.
- (1000 ET/1400 GMT) Mexico’s national statistics agency will release private spending and aggregate demand data for the fourth quarter of 2016.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1930 ET/2330 GMT) The Faculty of Economics and Commerce Melbourne Institute will release Australia's Westpac consumer confidence for the month of February. The index remained unchanged in January.
- (1950 ET/2350 GMT) Japan's Ministry of Finance reports merchandise trade balance for the month of February. The economy posted a deficit of 1,086.9 billion yen in the prior month.
- (1950 ET/2350 GMT) Bank of Japan publishes the minutes of its latest monetary policy meeting.
Key Events Ahead
- (0945 ET/1345 GMT) FedTrade 15-year Fannie Mae / Freddie Mac (max $600 mn)
- (1200 ET/1600 GMT) Federal Reserve Bank of Kansas City President Esther George will speak before an event hosted by Women in Housing and Finance in Washington.
- (1545 ET/1945 GMT) Bank of Canada Deputy Governor Lawrence Schembri will give a speech before the Greater Vancouver Board of Trade on business investment and the economic outlook.
- (1800 ET/2200 GMT) Cleveland Fed chief Loretta Mester speaks on "Outlook and Communications" before the University of Richmond Robins School of Business Speaker Series.
- (2145 ET/0145 GMT) Federal Reserve Bank of Boston President Eric Rosengren will speak at a closed meeting of the Twelfth Asia-Pacific High-Level Meeting on Banking Supervision in Bali, Indonesia.
FX Beat
DXY: The dollar slumped across the board after Chicago Fed President Charles Evans reinforced the view that the U.S. central bank won't accelerate the pace of its interest rate hikes. The greenback against a basket of currencies traded 0.5 percent down at 99.88, having hit a low of 99.86 earlier in the session, its lowest since Feb. 6. FxWirePro's Hourly Dollar Strength Index stood at -141.09 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro rose to a fresh 6-week high above the 1.0800 handle, as the selling pressure around the greenback intensified following yesterday’s less hawkish comments from Fed officials Harker and Evans. Moreover, latest news of a Macron win at the first French presidential debate eased concerns over a potential France exit from the European Union. The European currency traded 0.5 percent higher at 1.0795, hovering towards a high of 1.0804 hit earlier in the day, its highest since Feb. 2. FxWirePro's Hourly Euro Strength Index stood at 0.00 (Neutral) by 1000 GMT. On the lower side, near-term minor support is around 1.07500 and any break below will drag the pair down till 1.07220 (23.6% retracement of 1.05250 and 1.07824)/1.06700 (61.8% retracement of 1.05998 and 1.07825)/1.06000 (61.8% retracement of 1.04948 and 1.07825). Any break above 1.0800 will take the pair to next level till 1.0828 (Feb 2 high)/1.08735.
USD/JPY: The dollar tumbled, extending losses for the sixth consecutive session, amid persistent greenback selling pressure against the backdrop of less hawkish Fed outlook. However, Macron’s win in the first French Presidential debate triggered a fresh wave of risk-on sentiment, which weakened the bid tone around the safe-haven Japanese Yen. The major traded flat at 112.54, having hit a low of 112.25 earlier, its lowest since Feb 28. FxWirePro's Hourly Yen Strength Index stood at 34.07 (Neutral) by 1000 GMT. On the higher side, any break above 113.75 (21- day MA) will take the pair till 114.30/114.95. The near term support is around 112.35 (100 day EMA) and any break below will drag it till 111.59.
GBP/USD: Sterling rallied to a fresh 3-week high after data showed British inflation surpassed the Bank of England's 2 percent target for the first time since late 2013 in February. The economy's consumer prices rose at an annualized rate of 2.3 percent, beating expectations of a 2.1 percent rise, and previous reading of 1.8 percent. Sterling trades 0.8 percent up at 1.2458, having hit a high of 1.2471 earlier, its highest since Feb. 27. FxWirePro's Hourly Sterling Strength Index stood at 191.49 (Highly Bullish) by 1000 GMT. Any break above 1.24350 (trend line joining 1.27060 and 1.25695) will take the pair till 1.2520/1.2580. On the lower side, near term support is around 1.2320 and any break below targets 1.2283 (100- 4H EMA)/1.2250 level. Against the euro, the pound traded 0.3 percent up at 86.64 pence, having hit an early high of 86.50, its highest since Mar 8.
USD/CHF: The Swiss franc gained after declining for two straight sessions, as the greenback eased after Chicago Fed President Charles Evans stated that the Fed is likely to wait at least until June policy meeting to decide whether to hike U.S. interest rates again. The major traded 0.3 percent lower at 0.9959, hovering towards a low of 0.9942 hit on Friday, its weakest since Feb. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at -97.01 (Slightly Bearish) by 1000 GMT. The pair should break above 1.0030 for minor jump till 1.0060/1.0100.On the lower side, 0.9914 will be acting as immediate support and any break below will drag it down till 0.9860.
AUD/USD: The Australian dollar climbed, reversing RBA minutes led-losses as renewed selling pressure around the U.S. dollar supported the major. The Aussie trades 0.1 percent up at 0.7734, having hit a high of 0.7747 in the previous session, it’s highest since Nov. 9. FxWirePro's Hourly Aussie Strength Index stood at 33.75 (Neutral) by 1000 GMT. On the lower side, the next immediate support stands at 0.7660 (23.6% retracement of 0.74910 and 0.77193) and any break below will drag it down till 0.7605 (21- day EMA). The major resistance is around 0.7740 (Feb 23 high) and a break above will take it till 0.7800.
Equities Recap
European shares gained, boosted by banking and oil stocks, while euro rose to six-week highs after Macron's performance in the first French Presidential debate raised expectations that he would win over the far-right's Marine Le Pen.
The pan-European STOXX 600 index rallied 0.03 percent to 377.80 points, while the FTSEurofirst 300 index added 0.07 percent to 1,489.47 points.
Britain's FTSE 100 trades 0.07 percent down at 7,424.28 points, while mid-cap FTSE 250 shed 0.09 percent to 19,133.63 points.
Germany's DAX edged down 0.06 percent at 12,046.19 points; France's CAC 40 trades 0.23 percent higher at 5,023.81 points.
Tokyo's Nikkei fell 0.34 percent to 19,455.88 points, Australia's S&P/ASX 200 index eased 0.10 percent to 5,773.20 points and South Korea's KOSPI gained 0.99 percent to 2,178.38 points.
Shanghai composite index rose 0.33 percent to 3,261.61 points, while CSI300 index dropped 0.49 percent to 3,466.35 points. Hong Kong’s Hang Seng added 0.37 percent to 24,593.12 points.
Commodities Recap
Crude oil prices gained as strong demand was seen to slowly reduce a global fuel supply overhang. International benchmark Brent crude was trading 0.7 percent higher at $52.03 per barrel by 0912 GMT, having hit a high of $52.62 on Thursday, its highest since Mar. 10. U.S. West Texas Intermediate crude rose 2.45 percent to $49.34 a barrel, after rising to a peak of $52.62 last week, its strongest since Mar. 10.
Gold prices edged lower on profit taking, however, it remained within the sight of a 2-week high hit in the previous session on prospects of a less-hawkish Federal Reserve policy. Spot gold fell 0.2 percent at $1,231.64 per ounce, as of 0916 GMT, having hit a peak of $1,235.35 on Monday, its highest since March 6. U.S. gold futures fell 0.4 percent to $1,228.60.
Treasuries Recap
The U.S. Treasuries slumped ahead of the Federal Open Market Committee (FOMC) member Esther L. George’s scheduled speech for the day. The yield on the benchmark 10-year Treasury jumped 2-1/2 basis points to 2.49 percent, the super-long 30-year bond yield climbed 1-1/2 basis points to 3.10 percent and the yield on short-term 2-year note also trade 1/2 basis point higher at 1.30 percent.
The UK gilts continued to disappoint after reading the higher-than-expected consumer price inflation for the month of February. The yield on the benchmark 10-year gilts, jumped 5 basis points to 1.28 percent, the super-long 30-year bond yields climbed 4 basis points to 1.85 percent and the yield on the short-term 2-year traded 5-1/2 basis points higher at 0.14 percent.
The German bunds plunged as investors remain keen to watch the 10-year auction, scheduled to be held on March 22 which will remain crucial in determining the future direction of the bond market. The yield on the benchmark 10-year bond, jumped nearly 3 basis points to 0.46 percent, the long-term 30-year bond yields climbed 2-1/2 basis points to 1.21 percent and the yield on short-term 2-year bond also traded 2-1/2 basis points higher at -0.75 percent.
The New Zealand bonds closed mixed as investors wait to watch the GlobalDairyTrade price auction, scheduled to be held later today. Also, markets are now looking forward to the Reserve Bank of New Zealand’s monetary policy decision, due to be held on March 22 for further direction in the debt market. The yield on the benchmark 10-year bond, 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 traded in a tight range as investors refrained from any major activity amid a light trading session. Also, the Reserve Bank of Australia’s (RBA) March monetary policy meeting minutes, painted a mixed picture of the economy, adding sluggishness to market sentiments. The yield on the benchmark 10-year Treasury note, hovered around 2.82 percent, the yield on 15-year note also traded flat at 3.21 percent and the yield on short-term 2-year remained steady at 1.81 percent.
