Market Roundup
- EUR/USD +0.2%, USD/JPY -0.1%, GBP/USD +0.4%, DXY +0.2%
- DAX +0.05%, CAC +0.05%, Brent +1.5%, Gold +0.4%, Copper +1.0%
- GBP softer on the back of the lower than expected UK earnings growth numbers
- Dollar subdued as market awaits Fed rate message
- EU's Tusk warns "no deal" Brexit would hit Britain hardest
- UK has not assessed economic impact of leaving EU without deal - minister
- ECB Praet: Inflation outlook does not warrant current policy reassessment
- EZ Q4 Employment 0.3% q/q, 1.1% y/y vs previous 0.2%/1.2%
- Great Britain Feb Claimant count -11.3k vs previous -41.4k revised -5.0k forecast
- Great Britain Jan ILO Unemployment rate 4.7% vs previous 4.8%. 4.8% forecast. Lowest since 2005
- Great Britain Average weekly earnings (ex-bonuses) +2.3% y/y in 3 months to Jan vs previous 2.6%. 2.5% forecast
- Switzerland Feb Producer/Import price -0.2% m/m, 1.3% y/y vs previous 0.4%/0.8%
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of New York is expected to report that manufacturing activity in New York State grew 15 percent in March after rising 18.70 percent in February.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that retail sales edged up 0.1 percent in February after advancing 0.4 percent in January. While excluding autos, retail sales are likely to have gained 0.2 percent, after surging 0.8 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. consumer price index is likely to remain unchanged in February after rising 0.6 percent in January, while in the 12 months through January, the CPI is expected to have risen 2.7 percent. Excluding food and energy, the core CPI probably rose 0.2 percent, after increasing 0.3 percent in the previous month.
- (1000 ET/1400 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.3 percent in January after rising 0.4 percent in February.
- (1000 ET/1400 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index remained unchanged at 65 in March.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending March 10.
- (1745 ET/2145 GMT) Statistics New Zealand will release fourth quarter Gross Domestic Product figures. The economy is expected to grow at an annualized rate of 3.1 percent, after rising 3.5 percent in the prior quarter.
- (1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending March 10.
- (1950 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending March 10.
Key Events Ahead
- N/A The Bank of Japan (BoJ) begins its two-day monetary policy meeting.
- (1400 ET/1800 GMT) The Federal Open Market Committee concludes its two-day meeting on interest rate policy and releases its statement.
- (1430 ET/1830 GMT) The Federal Reserve Chair Janet Yellen holds a press conference following Federal Open Market Committee meeting.
FX Beat
DXY: The dollar tumbled across the board as investors refrained from placing big bets ahead of FOMC policy outcome. The greenback against a basket of currencies traded 0.2 percent down at 101.57, having hit a low of 101.01 on Monday, its lowest since Feb. 28. FxWirePro's Hourly Dollar Strength Index stood at -41.08 (Neutral) by 1000 GMT.
EUR/USD: The euro rose as the greenback eased on profit taking ahead of FOMC interest rate decision and economic projections. Investors have already priced in a 25 bp rate hike, however, markets focus will remain on the press conference by Chair Yellen for further clues on the pace of U.S. interest rate hikes this year. The European currency traded 0.1 percent higher at 1.0619, having hit a high of 1.0714 on Monday, its highest since Feb. 7. FxWirePro's Hourly Euro Strength Index stood at -108.66 (Highly Bearish) by 1000 GMT. Any close above 1.0700 will take the pair till 1.07400/1.0800/1.0828. On the lower side, any weakness can be seen below 1.0490 and break below will drag it till 1.0453/1.0345 (Jan 1st low).
USD/JPY: The dollar continued to consolidate between a narrow range as investors refrained from taking big positions ahead of FOMC monetary policy decision. Meanwhile, the Bank of Japan also holds it two-day monetary policy meeting, where it is expected to leave its policy unchanged on Thursday. The major traded 0.08 percent down at 114.65, having hit a high of 115.50 last week, its highest since Jan. 19. FxWirePro's Hourly Yen Strength Index stood at 37.38 (Neutral) by 1000 GMT. On the higher side, any break above 115.50 will take the pair till 115.95/ 116.12/ 116.70 (127% retracement of 115.62 and 111.59). The near term support is around 114.30 and any break below will drag it till 113.85/113.55 (Mar 6th low).
GBP/USD: Sterling trimmed gains to trade below the 1.2200 handle after data released showed more-than-expected fall in the pace of wages growth in the three months to January. The economy's unemployment rate declined unexpectedly, however, the pay growth deteriorated to 2.2 percent, its weakest since last April. Sterling trades 0.2 percent up at 1.2183, having hit a high of 1.2254 earlier in the session, its highest since Mar. 6. FxWirePro's Hourly Sterling Strength Index stood at 5.36 (Neutral) by 1000 GMT. On the higher side, any break above 1.2250 will take the pair to next level 1.2300/1.2345. The next immediate support stands at 1.2130 and any break below will drag it down till 1.2080/1.20300. Against the euro, the pound trades 01 percent up at 87.16 pence, having hit a fresh 6-day high of 86.63 pence.
USD/CHF: The Swiss franc rose as uncertainty over the outcome of Dutch elections and cautious tone ahead of FOMC policy decision supported safe-haven buying. The major traded 0.1 percent lower at 1.0089, having touched a low of 1.0060 on Monday, its weakest since Mar. 1. FxWirePro's Hourly Swiss Franc Strength Index stood at -34.35 (Neutral) by 1000 GMT. The pair should break above the weekly high of 1.01700 for further jump till 1.0200/1.02480. On the lower side, 1.0060 will be acting as immediate support and any break below will drag it down till 1.000/0.9960 (Feb 16th high).
AUD/USD: The Australian dollar rose towards the 0.7600 handle as subdued action around the U.S. treasury yields failed to support to the greenback. Moreover, positive sentiment around the equity and commodity markets boosted the bid tone around the major. The Aussie trades 0.3 percent up at 0.7584, having touched a high of 0.7592 touched on Monday, it’s highest since Mar. 8. FxWirePro's Hourly Aussie Strength Index stood at 99.88 (Slightly Bullish) by 1000 GMT. On the lower side, the next immediate support stands at 0.7534 (200- day MA) and any break below will drag the pair down till 0.7490/0.74450/0.7380 (61.8% retracement of 0.71599 and 0.77406). The major resistance is around 0.7598 (21- day EMA) and a break above will take it till 0.7635/0.7680.
Equities Recap
European shares advanced in early deals, strengthened by basic resource and oil stocks, while investors focused remained on the U.S. central bank policy meeting outcome.
The pan-European STOXX 600 index rallied 0.27 percent to 374.47 points, while the FTSEurofirst 300 index advanced 0.35 percent to 1,477.67 points.
Britain's FTSE 100 trades 0.17 percent up at 7,370.27 points, while mid-cap FTSE 250 shed 0.20 percent to 18,913.05 points.
Germany's DAX edged up 0.2 percent at 12,012.85 points; France's CAC 40 trades 0.13 percent higher at 4,980.69 points.
Tokyo's Nikkei fell 0.16 percent to 19,57.38 points, Australia's S&P/ASX 200 index rose 0.22 percent to 5,771.60 points and South Korea's KOSPI gained 0.79 percent to 2,133.78 points.
Shanghai composite index rose 0.1 percent to 3,241.76 points, while CSI300 index climbed 0.2 percent to 3,463.64 points. Hong Kong’s Hang Seng shed 0.2 percent to 23,792.85 points.
Commodities Recap
Crude oil prices retreated from three-month lows after industry data showed U.S. crude stocks surprisingly fell by 531,000 barrels last week. International benchmark Brent crude was trading 0.5 percent down at $51.57 per barrel by 0925 GMT, having hit a low of $50.23 the prior day, its lowest since Nov. 30. U.S. West Texas Intermediate crude rose 0.05 percent to $48.50 a barrel, after falling to a trough of $47.07 on Tuesday, its weakest since Nov end.
Gold prices rose above the $1200 level as uncertainty over the outcome of Dutch elections strengthened safe-haven buying, while markets await clues on the pace of U.S. interest rate hikes this year. Spot gold gained 0.4 percent to $1,203.50 per ounce by 0927 GMT, having declined to its weakest since Jan. 31 at $1,194.86 last week. U.S. gold futures rose 0.1 percent to $1,203.30 per ounce.
Treasuries Recap
The U.S. Treasuries gained on expectations of a fall in the country’s consumer price index for the month of February and ahead of the FOMC’s monetary policy meeting, scheduled to be held later in the day. The yield on the benchmark 10-year Treasury slumped over 1 basis point to 2.58 percent, the super-long 30-year bond yield skid nearly 1 basis point to 3.16 percent and the yield on short-term 2-year note traded 1/2 basis point lower at 1.37 percent.
The UK gilts traded modestly higher ahead of the Bank of England’s (BoE) monetary policy decision, scheduled to be held on March 16. The yield on the benchmark 10-year gilts, fell nearly 1 basis point to 1.22 percent, the super-long 30-year bond yields slid 1/2 basis point to 1.82 percent and the yield on the short-term 2-year traded nearly 1 basis point lower at 0.06 percent.
The German bunds jumped ahead of the Eurozone’s February consumer price inflation, scheduled to be released on Thursday. The yield on the benchmark 10-year bond, which moves inversely to its price, fell 1 basis point to 0.48 percent, the long-term 30-year bond yields slumped 1-1/2 basis points to 1.19 percent and the yield on short-term 1-year bond plunged 2-1/2 basis points to -0.86 percent.
The Japanese government bonds remained flat as investors wait to watch the Bank of Japan’s (BoJ) 2-day monetary policy meeting, scheduled to be held on March 15-16, announcing its decision on Thursday. The benchmark 10-year bond yield, hovered around 0.09 percent, the long-term 30-year bond yields also traded flat at 0.87 percent and the yield on the short-term 2-year note remained rose by 1/2 basis points to -0.25 percent.
The New Zealand government bonds traded mixed as investors wait to watch the country’s fourth-quarter gross domestic product (GDP), scheduled to be released on March 16. The yield on the benchmark 10-year bond, rose 1 basis point to 3.38 percent, while the yield on 7-year note dipped nearly 1 basis point to 2.93 percent while the yield on short-term 2-year note also traded 1 basis point lower at 2.18 percent.
The Australian bonds traded modestly higher as investors poured into safe-haven assets ahead of the February employment report, scheduled to be released on March 16. The yield on the benchmark 10-year Treasury note, fell 1/2 basis point to 2.93 percent, the yield on 15-year note dived nearly 1 basis point to 3.32 percent and the yield on short-term 2-year also traded 1 basis point lower at 1.89 percent.
