Market Roundup
- EUR/USD -0.2%, USD/JPY -0.2%, GBP/USD -0.2%, DXY +0.1%
- DAX +0.4%, CAC +0.1%, FTSE flat, Brent +0.7%, Gold +0.1%
- Dollar index pulls away from 4-1/2-month lows to 99,953
- GBP/USD reverses early losses, lifts to 1.2460
- Oil rises on Libya disruption, likely extension to OPEC output cut
- British PM May to fire starting gun on Brexit
- Great Britain Feb BOE Consumer credit 1.441bln vs previous 1.609 revised 1.300bln forecast
- Great Britain Feb Mortgage lending 3.489bln vs previous 3.226 revised 3.450bln forecast
- Great Britain Feb Mortgage approvals 68.315k vs previous 69.114k revised 69.900k forecast
- Great Britain Feb M4 money supply -0.3% vs previous 0.9%
- Germany Feb Import prices 0.7% m/m, 7.4% y/y vs previous 0.9%/6.0%. 0.3%/7.0% forecast
- Switzerland Mar Investor sentiment 29.6 vs previous 19.4
- Switzerland Feb UBS Consumption indicator 1.50 vs previous 1.44
- France Fabius says Trump's move on Obama-era climate policies is backward step
- No one wants lines of trucks at borders after Brexit - Hammond
- French ex-PM Valls says will vote for Macron in election
Economic Data Ahead
- (0900 ET/1300 GMT) Brazil releases service sector growth for the month of January and bank lending rate for February.
- (1000 ET/1400 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 2.4 percent in February after declining 2.8 percent in January.
- (1000 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending March 24.
- (1500 ET/1900 GMT) The Argentine government is due to release current account figures for the fourth quarter.
- (1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending March 24.
- (1950 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending March 24.
Key Events Ahead
- (0920 ET/1320 GMT) Federal Reserve Bank of Chicago President Charles Evans delivers a lecture on the economy and monetary policy before the DZ Bank-OMFIF International Capital Markets Conference in Frankfurt, Germany.
- (1130 ET/1530 GMT) Boston Fed President Eric Rosengren speaks on the economic outlook before members of the Boston Economic Club and Federal Reserve staff.
- (1315 ET/1715 GMT) San Franciso Fed chief John Williams is due to speak on "From Sustained Recovery to Sustainable Growth: What a Difference Four Years Makes" before the Forecasters Club of New York.
- (1350 ET/1750 GMT) European Central Bank executive board member Peter Praet delivers a speech at the "2017 Harvard Law Europe - U.S. Symposium on International Financial Systems" in Frankfurt.
FX Beat
DXY: The dollar rebounded across the board after better-than-expected U.S. economic data boosted expectations for more U.S. interest rate hikes this year. The greenback against a basket of currencies traded 0.1 percent up at 99.83, having hit a low of 98.89 on Monday, its lowest since Nov. 11. FxWirePro's Hourly Dollar Strength Index stood at 78.98 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro fell to a 5-day low below the 1.0800 handle as the greenback attempted a strong recovery versus its major peers after upbeat data backed expectations for more U.S. interest rate hikes this year. The European currency traded 0.2 percent down at 1.0791, having touched a high of 1.0905 on Monday, its highest since Nov. 11. FxWirePro's Hourly Euro Strength Index stood at 19.58 (Neutral) by 1000 GMT. On the lower side, 1.07600 (Mar 24 low) will be acting as near-term support and any break below will drag the pair down till 1.0735. The near term resistance is at 1.0882 (200- day MA) and any violation above will take it to recent high at 1.09058/1.09329 (61.8% retracement of 1.1299 and 1.03400).
USD/JPY: The dollar eased below the 111.00 handle as concern about Britain's looming exit from the European Union triggered a fresh bout of risk aversion, boosting the safe-haven Japanese yen's demand. The major traded 0.1 percent down at 110.97, drifting towards a low of 110.10 touched on Monday, its lowest since Nov. 18. FxWirePro's Hourly Yen Strength Index stood at -28.51 (Neutral) by 1000 GMT. On the higher side, any break above 111.40 (23.6% retracement of 115.50 and 110.11) will take the pair till 112.20 (100- day EMA)/ 113.00 (55- day EMA). The near term support is around 110 and any break below will drag it till 108.65.
GBP/USD; Sterling trimmed losses after the UK Chancellor Hammond stated that he was confident the UK will not get a worst case outcome in Brexit negotiations. Investors now await the UK PM May’s speech and EU President Tusk’s press conference, following which a two-year process of the UK leaving the EU will start. Sterling trades 0.2 lower at 1.2426, having hit a low of 1.2376 earlier in the session, its lowest since Mar. 21. FxWirePro's Hourly Sterling Strength Index stood at -130.34 (Highly Bearish) by 1000 GMT. On the lower side, near term support is around 1.23450 and any break below will drag the pair down till 1.2260/1.2200/1.2108 (Mar 14 low). The near term resistance is around 1.2460 and any indicative break above will take it till 1.2520/1.2580/1.2635/1.2706 (Feb 2 high). Against the euro, the pound traded flat at 86.83 pence, having hit a low of 87.34 earlier, its lowest since Mar 17.
USD/CHF: The Swiss franc declined, extending previous session losses as the greenback strengthened following a rise in the U.S. Treasury yields. The major traded 0.1 percent higher at 0.9939, hovering away from a low of 0.9813, its weakest since Nov. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at -109.50 (Highly Bearish) by 1000 GMT. It should break above 0.9960 for minor bullishness and any violation above will take the pair till 1.0027 (21- day MA)/1.00340 (61.8% retracement of 1.01700 and 0.98136)/1.00783 (61.8% retracement of 1.03435 and 0.98136). On the lower side, any break below 0.9800 confirms further weakness. Any break below that level will drag it till 0.9768 (61.8% retracement of 0.94439 and 1.03436).
AUD/USD: The Australian dollar rose to a 6-day high earlier in the session as renewed optimism about the health of the global economy strengthened risk appetite and commodity prices. The pair trades 0.2 percent up at 0.7651, having hit an early high of 0.7665, it’s highest since Mar. 23. FxWirePro's Hourly Aussie Strength Index stood at 66.20 (Bullish) by 1000 GMT. On the lower side, the next immediate support stands at 0.7587 (61.8% retracement of 0.74910 and 0.77490) and any break below will drag the pair down till 0.7545 (200- day MA)/0.7490. The major resistance is around 0.7750 (Feb 23 high) and a break above will take it till 0.7800.
Equities Recap
European shares edged up in early trade following Wall Street's late rise, while investors remained cautious ahead of the formal triggering of Britain's exit process from the European Union later in the day.
The pan-European STOXX 600 index gained 0.01 percent to 377.28 points, while the FTSEurofirst 300 index rose 0.02 percent to 1,488.22 points.
Britain's FTSE 100 trades 0.04 percent down at 7,340.81 points, while mid-cap FTSE 250 rose 0.05 percent to 18,963.49 points.
Germany's DAX edged up 0.42 percent at 12,201.07 points; France's CAC 40 trades 0.14 percent higher at 5,053.02 points.
Tokyo's Nikkei gained 0.08 percent to 19,217.48 points, Australia's S&P/ASX 200 index rose 0.82 percent to 5,869.10 points and South Korea's KOSPI added 0.17 percent to 2,166.98 points.
Shanghai composite index eased 0.4 percent to 3,241.31 points, while CSI300 index dropped 0.1 percent to 3,465.19 points. Hong Kong’s Hang Seng climbed 0.2 percent to 24,392.05 points.
Commodities Recap
Crude oil prices rose, extending gains from the previous session, supported by supply disruptions in Libya and OPEC-led output reduction. International benchmark Brent crude was trading 0.6 percent up at $51.67 per barrel by 0947 GMT, having hit a high of $51.85 the prior day, its strongest since Mar. 21. U.S. West Texas Intermediate crude gained 0.35 percent to $48.62 a barrel, after rising as high as $48.82 earlier in the session, its highest since Mar. 21.
Gold prices inched up, reversing some of its previous session losses, amid slight improvement in risk appetite as talks on further Fed rate hikes this year supported the dollar. Spot gold was rose 0.15 percent to $1,253.16 per ounce at 0943 GMT, having hit a high of $1,260.90 on Monday, its highest its Feb. 27. U.S. gold futures slipped 0.5 percent to $1,249.8.
Treasuries Recap
The U.S. Treasuries remained mixed as investors wait to watch the Federal Open Market Committee (FOMC) members Rosengren and Williams’s speech, scheduled to be held later in the day. The yield on the benchmark 10-year Treasury remained steady at 2.40 percent, the super-long 30-year bond yields hovered around 3.01 percent and the yield on short-term 2-year note traded flat at 1.29 percent.
The UK gilts traded flat as investors remain keen to watch the country’s fourth-quarter gross domestic product (GDP), due to be released by the end of this week, which will remain crucial in deciding further movements in the money market. The yield on the benchmark 10-year gilts, hovered around 1.19 percent, the super-long 30-year bond yields also remained flat at 1.77 percent while the yield on the short-term 2-year traded nearly 1 basis points down at 0.17 percent.
The German bunds remained narrowly mixed as investors await the country’s unemployment rate and the consumer price inflation, during the month of March, scheduled to be released March 30 and 31 respectively. The yield on the benchmark 10-year bond, jumped nearly 2 basis points to 0.38 percent, the long-term 30-year bond yields traded nearly flat at 1.13 percent while the yield on the short-term 3-year bond traded 1 basis point lower at -0.59 percent.
The Japanese government bonds remained mixed as investors remain keen to watch the country’s February consumer price inflation as well as industrial production data, scheduled to be released on March 31. The benchmark 10-year bond yield, fell 1 basis point to 0.06 percent, while the long-term 30-year bond yields rose nearly 1 basis point to 0.82 percent and the yield on the short-term 3-year note traded flat at -0.18 percent.
The New Zealand bonds slid at the time of closing, tracking rout in the global bond market amid a session that witnessed data of little economic significance and as investors moved away from safe haven assets amid gains in riskier classes including equities and oil. The yield on the benchmark 10-year bond, jumped 4 basis points to 3.25 percent at the time of closing, the yield on 7-year note climbed 3 basis points to 2.84 percent while the yield on short-term 2-year note also traded 2 basis points higher at 2.17 percent.
The Australian bonds slumped, tracking softness in the U.S. counterpart. Also, broad gains in equities led to the slide in the country’s money market. The yield on the benchmark 10-year Treasury note, jumped 3 basis points to 2.74 percent, the yield on 15-year note also climbed a little over 2-1/2 basis points to 3.12 percent and the yield on short-term 2-year also traded 1 basis point higher at 1.76 percent.
