Market Roundup
- EUR/USD +0.1%, USD/JPY +0.1%, GBP/USD +0.1%, DXY flat
- DAX -0.4%, CAC -0.5%, Brent -1.2%, Gold +0.4%, Copper -0.6%
- Dollar falls for 4th day after G20 trade message
- GBP/USD rises to 3-week high of 1.2436 in early London trade
- Germany Feb Producer prices 0.2% m/m, 3.1% y/y vs previous 0.7%/2.4%. 0.3%/3.2% forecast
- EZ Q4 Labor cost growth 1.6% vs previous 1.4% revised from 1.5%
- EZ Q4 Wage growth 1.6% y/y vs previous 1.5% revised from 1.6%
- SNB domestic deposits rise to 470.893bln w/e Mar 17 vs previous 467.429
- Germany's economic advisers reject criticism of current account surplus
- Scottish leader softens stance on possible independence vote timing
- Russian finmin says rouble overvalued by up to 12% - agencies
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of February. The index stood at -0.05 in the prior month.
- (0830 ET/1230 GMT) Statistics Canada will release its wholesale trade data for the month of January. The report is likely to show a 0.5 percent rise after growing 0.7 percent in December.
- (1030 ET/1430 GMT) The Conference Board releases Australia's Leading Indicator for the month of January. The indicator declined 0.1 percent in the month before.
- (1745 ET/2145 GMT) The Statistics New Zealand will release visitor arrivals report for the month of February. The indicator posted an annualized gain of 11.0 percent in the prior month.
Key Events Ahead
- (0830 ET/1230 GMT) Chicago Fed President Charles Evans participates in a live interview on Fox Business News, from New York.
- (1145 ET/1545 GMT) FedTrade 30-year Ginnie Mae (max $825 mn)
- (1245 ET/1645 GMT) Deutsche Bundesbank President Dr. Jens Weidmann speech.
- (1310 ET/1710 GMT) Federal Reserve Bank of Chicago President Charles Evans speaks on the economy before the New York Association for Business Economics, in New York.
- (1420 ET/1820 GMT) Bank of England Chief Economist Andy Haldane will give a lecture on productivity growth at the London School of Economics.
- (1930 ET/2330 GMT) The United States President Donald Trump gives a speech.
FX Beat
DXY: The dollar slumped to multi-week lows versus its major peers as the Federal Reserve slashed expectations that it would hike interest rates at an aggressive pace this year. The greenback against a basket of currencies traded 0.1 percent down at 100.19, having hit a low of 100.02 earlier, its lowest since Feb. 7. FxWirePro's Hourly Dollar Strength Index stood at -60.49 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro rose towards a 5-1/2 - week high touched in the previous session, as the greenback tumbled after the Federal Reserve's dovish outlook on the pace of rate hikes this year continued to disappoint dollar bulls. Moreover, the major strengthened after Odoxa Poll released over the weekend showed Macron keeping the edge in the French election race ahead of the first debate. The European currency traded 0.15 percent higher at 1.0752, within the sight of a high of 1.0782 hit on Friday, its highest since Feb. 6. FxWirePro's Hourly Euro Strength Index stood at -29.06 (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 1.0722 (23.6% retracement of 1.0525 and 1.07824)/1.0670 (61.8% retracement of 1.05998 and 1.07825)/1.06000 (61.8% retracement of 1.04948 and 1.07825). The nearby resistance is around 1.07850 and any break above targets 1.08288 (Feb 2 high)/1.08735.
USD/JPY: The dollar edged up against the Japanese yen after declining for four consecutive sessions, despite a poor performance from yields in the U.S. money markets. However, the recovery appears fragile as concerns about the United States' global trade relations triggered a fresh bout of risk aversion, which benefited yen's the safe-haven appeal. The major traded 0.1 percent up at 112.80, having hit a low of 112.45 earlier, its lowest since Feb 28. FxWirePro's Hourly Yen Strength Index stood at 35.92 (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 rose above the 1.2400 handle to hit a fresh three-week high as the greenback tumbled in wake of perceived less hawkish Fed outlook. Investors now await MPC voting member Andy Haldane's speech, which could provide further insights on the BoE policy stance in near future. Sterling trades 0.1 percent up at 1.2410, having hit a high of 1.2435 earlier, its highest since Feb. 28. FxWirePro's Hourly Sterling Strength Index stood at 143.50 (Highly Bullish) by 1000 GMT. The upside is capped by 1.24350 (trend line joining 1.27060 and 1.25695) and any break above will take the pair till 1.2520. On the lower side, near term support is around 1.2380 and any break below targets 1.2320/1.2283 (100- 4H EMA)/1.2250 level. Against the euro, the pound traded 0.07 percent down at 86.67 pence, having hit a high of 86.58 earlier, its highest since Mar 9.
USD/CHF: The Swiss franc rose, recovering some of its previous session losses, as the dollar continued to ease versus its major peers following last week’s dovish FOMC outcome. The major traded lower at 0.9976, having touched a low of 0.9942 on Friday, its weakest since Feb. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at -75.18 (Slightly Bearish) by 1000 GMT. The pair is facing intraday major resistance at 0.99865 and any break above that level will take it till 1/1.00294 (38.2% retracement of 1.01704 and 0.99423)/1.0065 (200- H MA). On the lower side, 0.99120 will be acting as immediate support and any break below will drag it down till 0.9860.
AUD/USD: The Australian dollar rose to a more than 3-week high above the 0.7700 handle as persistent bearish sentiment surrounding the greenback boosted the bid tone around the major. The Aussie trades 0.3 percent up at 0.7728, having hit a high of 0.7747 earlier, it’s highest since Nov. 9. FxWirePro's Hourly Aussie Strength Index stood at 41.20 (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 the pair 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 eased from 15-month highs, weighed down by oil and bank stocks, while the greenback slumped to a near 6-week low after the Federal Reserve's dovish outlook on the pace of rate hikes this year continued to hurt dollar bulls.
The pan-European STOXX 600 index declined 0.11 percent to 377.89 points, while the FTSEurofirst 300 index eased 0.14 percent to 1,489.80 points.
Britain's FTSE 100 trades 0.20 percent down at 7,409.97 points, while mid-cap FTSE 250 shed 0.04 percent to 19,087.20 points.
Germany's DAX edged down 0.22 percent at 12,069.17 points; France's CAC 40 trades 0.25 percent lower at 5,016.80 points.
Australia's S&P/ASX 200 index fell 0.50 percent to 5,770.70 points and South Korea's KOSPI gained 0.79 percent to 2,133.78 points.
Shanghai composite index rallied 0.4 percent to 3,250.81 points, while CSI300 index rose 0.1 percent to 3,449.61 points. Hong Kong’s Hang Seng added 0.8 percent to 24,501.99 points.
Commodities Recap
Crude oil prices tumbled over 1 percent as increasing U.S. drilling activity and steady supplies from OPEC countries added to the global supply glut despite touted production cuts. International benchmark Brent crude was trading 0.9 percent lower at $51.24 per barrel by 0920 GMT, having hit a high of $52.62 on Thursday, its highest since Mar. 10. U.S. West Texas Intermediate crude fell 1.03 percent to $48.18 a barrel, after rising to a peak of $52.62 last week, its strongest since Mar. 10.
Gold prices rallied to a two-week high as the greenback declined to 5-1/2 week lows following the Federal Reserve's less hawkish outlook on the pace of rate increases this year. Spot gold rose 0.3 percent to $1,233.08 per ounce by 0924GMT, having hit a peak of $1,235.35 an ounce, its highest since March 6. U.S. gold futures gained 0.3 percent to $1,234.10.
Treasuries Recap
The U.S. Treasuries remained flat ahead of the President Donald Trump’s scheduled speech later in the day. The yield on the benchmark 10-year Treasury traded flat at 2.50 percent, the super-long 30-year bond yield hovered around 3.11 percent and the yield on short-term 2-year note also remained steady at 1.32 percent.
The UK gilts slid following expectations of a rebound in the country’s consumer price inflation (CPI) for the month of February. The yield on the benchmark 10-year gilts rose 1-1/2 basis points to 1.25 percent, the super-long 30-year bond yields jumped nearly 2 basis points to 1.84 percent and the yield on the short-term 2-year traded over 2 basis points higher at 0.11 percent.
The German bunds maintained cautious trade, following upbeat producer prices during the month of February. The yield on the benchmark 10-year bond jumped nearly 2 basis points to 0.44 percent, the long-term 30-year bond yields climbed 1-1/2 basis points to 1.18 percent and the yield on short-term 3-year bond also traded 1-1/2 basis points higher at -0.65 percent.
The New Zealand bonds closed higher as investors wait to watch the GlobalDairyTrade price auction, scheduled to be held on later in today. The yield on the benchmark 10-year bond slumped 4 basis points to 3.25 percent at the time of closing, the yield on 7-year note also plunged 4 basis points to 2.82 percent while the yield on short-term 2-year note traded 2 basis points lower at 2.11 percent.
The Australian bonds posted a sharp rebound at the start of the week as investors covered previous short positions. The yield on the benchmark 10-year Treasury note slumped 5 basis points to 2.82 percent, the yield on 15-year note also plunged 5 basis points to 3.21 percent and the yield on short-term 2-year traded nearly 4 basis points lower at 1.80 percent.
