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Europe Roundup: Sterling slumps on weaker-than-expected UK prelim Q4 GDP, greenback rallies on U.S.-China trade deal prospects, European shares surge - Monday, February 11th, 2019

Market Roundup

  • United Kingdom q4 2018 GDP prelim yy decrease to 1.3 % (forecast 1.4 %) vs previous 1.6 % (revised from 1.5 %)
     
  • United Kingdom q4 2018 GDP prelim qq decrease to 0.2 % (forecast 0.2 %) vs previous 0.6 %
     
  • United Kingdom Dec 2018 goods trade balance Non-eu increase to -3.642 gbp vs previous -4.184 gbp (revised from -3.925 gbp)
     
  • United Kingdom Dec 2018 construction o/p vol yy decrease to -2.4 % (forecast 1.5 %) vs previous 1.8 % (revised from 3 %)
     
  • United Kingdom Dec 2018 manufacturing output mm decrease to -0.7 % (forecast 0.2 %) vs previous -0.1 % (revised from -0.3 %)
     
  • United Kingdom Dec 2018 services yy decrease to 1.7 % vs previous 2 % (revised from 1.9 %)
     
  • United Kingdom Dec 2018 manufacturing output yy decrease to -2.1 % (forecast -1.1 %) vs previous -1.2 % (revised from -1.1 %)
     
  • United Kingdom Dec 2018 industrial output yy increase to -0.9 % (forecast -0.4 %) vs previous -1.3 % (revised from -1.5 %)
     
  • United Kingdom Dec 2018 construction o/p volume mm decrease to -2.8 % vs previous 0.1 % (revised from 0.6 %)
     
  • United Kingdom Dec 2018 GDP estimate yy decrease to 1 % (forecast 1.4 %) vs previous 1.5 % (revised from 1.4 %)
     
  • United Kingdom Dec 2018 industrial output mm decrease to -0.5 % (forecast 0.2 %) vs previous -0.3 % (revised from -0.4 %)
     
  • United Kingdom Dec 2018 services mm decrease to -0.2 % vs previous 0.3 %
     
  • United Kingdom Dec 2018 GDP estimate 3m/3m decrease to 0.2 % (forecast 0.3 %) vs previous 0.3 %
     
  • United Kingdom Dec 2018 GDP estimate mm decrease to -0.4 % vs previous 0.2 %
     
  • United Kingdom q4 2018 business invest yy prelim decrease to -3.7 % vs previous -1.9 % (revised from -1.8 %)
     
  • United Kingdom q4 2018 business invest qq prelim decrease to -1.4 % vs previous -1.2 % (revised from -1.1 %)
     
  • United Kingdom dec 2018 goods trade balance gbp increase to -12.1 gbp (forecast -12 gbp) vs previous -12.4 gbp (revised from -12.02 gbp)
     
  • Switzerland Jan 2019 Cpi nsa decrease to 101.26 vs previous 101.53
     
  • Switzerland Jan 2019 CPI nsa decrease to 101.3 vs previous 101.53
     
  • Switzerland Jan 2019 CPI yy decrease to 0.6 % (forecast 0.6 %) vs previous 0.7 %
     
  • Switzerland Jan 2019 CPI mm stays flat at -0.3 % (forecast -0.3 %) vs previous -0.3 %
     

Economic Data Ahead

No major economic data releases

Key Events Ahead

  • (1115 ET/1615 GMT) Federal Reserve Governor Michelle W. Bowman is expected to speak at the 2019 American Bankers Association Conference for Community Bankers.

FX Beat

DXY: The dollar index advanced to a near 6-week, as the United States is expected to keep pressing China on longstanding demands that it reform how it treats American companies' intellectual property in order to seal a trade deal. The greenback against a basket of currencies trades 0.2 percent up at 96.84, having touched a high of 96.87 earlier, its highest since January 2. FxWirePro's Hourly Dollar Strength Index stood at 150.83 (Highly Bullish) by 1000 GMT.

EUR/USD: The euro slumped to a 2-1/2 week low as fears of economic slowdown in Europe and plunging inflation expectations dominated investor sentiment. The European currency traded 0.2 percent down at 1.1303, having touched a low of 1.1296 earlier, its lowest since Jan. 24. FxWirePro's Hourly Euro Strength Index stood at -78.71 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 1.1406 (January 17 High), a break above targets 1.1474 (December 21 High). On the downside, support is seen at 1.1269 (December 14 Low), a break below could drag it till 1.1216 (November 13 Low).

USD/JPY: The dollar rallied to a 6-week peak, as trade talks resumed between the United States and China, where U.S. negotiators will press China to reform how it treats U.S. companies' intellectual property. The major was trading 0.5 percent up at 110.23, having hit a high of 110.28 earlier, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at -59.29 (Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 110.47 (Dec. 31 High), a break above targets 110.94 (Aug. 13 Low). On the downside, support is seen at 109.16 (Jan. 28 Low), a break below could take it lower at 108.80 (Jan. 30 Low).

GBP/USD: Sterling plunged after data showed Britain's economy slowed as expected in the final quarter of last year, pushing growth in 2018 to its weakest in six years, as Brexit worries dented investment. Moreover, news that British Prime Minister Theresa May has rejected the idea of targeting a customs union with the European Union, slashed hopes that she could change her Brexit policy to win over the opposition Labour Party. The major traded 0.3 percent down at 1.2898, having hit a low of 1.2854 on Thursday; it’s lowest since January 22. FxWirePro's Hourly Sterling Strength Index stood at -10.43 (Neutral) 1000 GMT. Immediate resistance is located at 1.3001 (January 17 High), a break above could take it near 1.3047 (November 13 High). On the downside, support is seen at 1.2879 (November 14 Low), a break below targets 1.2827 (November 12 Low). Against the euro, the pound was trading 0.2 percent down at 87.60 pence, having hit a low of 88.21 on Tuesday, it’s lowest since Jan. 22.

USD/CHF: The Swiss franc tumbled to a 3-month low as the greenback gained amid resumed trade talks between the United States and China. The major trades 0.3 percent higher at 1.0030, having touched a high of 1.0096 earlier; it’s highest since November 14. FxWirePro's Hourly Swiss Franc Strength Index stood at -8.71 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0111 (November 12 High) and any break above will take the pair to next level till 1.0150. The near-term support is around 0.9961 (January 22 Low), and any close below that level will drag it till 0.9889 (December 7 Low).

Equities Recap

European shares advanced, boosted by gains in miners and banking stocks, while sterling eased after the UK's gross domestic product for the last quarter of 2018 disappointed market sentiments.

The pan-European STOXX 600 index rallied 1.0 percent at 361.60 points, while the FTSEurofirst 300 index surged 1.0 percent to 1,424.50 points.

Britain's FTSE 100 trades 0.9 percent up at 7,140.52 points, while mid-cap FTSE 250 gained 0.6 to 18,764.26 points.

Germany's DAX rose 1.1 percent at 11,023.14 points; France's CAC 40 trades 1.1 percent higher at 5,016.03 points

Commodities Recap

Crude oil prices eased on rising drilling activity in the United States and a refinery fire in the U.S. state of Illinois resulted in the shutdown of a large crude distillation unit. International benchmark Brent crude was trading 0.2 percent up at $62.20 per barrel by 1001 GMT, having hit a low of $60.58 on Thursday, its lowest since February 1. U.S. West Texas Intermediate was trading 0.5 percent lower at $52.44 a barrel, after falling as low as $51.77 on Thursday, its lowest since the January 28.

Gold prices declined as the greenback surged amid uncertainties around U.S-China trade tensions, however, worries about a slowdown in global economic growth limited downside. Spot gold eased 0.5 percent to $1,306.92 per ounce by 1011 GMT, having touched a low of $1,302.71 on Thursday, its lowest level since Jan. 29. U.S. gold futures declined 0.3 percent to $1,314.90 per ounce.

Treasuries Recap

The U.S. Treasury yields edged during late European session despite further trade talks between the United States and China amid an otherwise, muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury yield rose 1-1/2 basis points to 2.648 percent, the super-long 30-year bond yields edged 1 basis point higher to 2.984 percent and the yield on the short-term 2-year traded nearly 2 basis points higher at 2.481 percent.

The United Kingdom’s gilts plunged during the afternoon session, after the country’s gross domestic product (GDP) for the last quarter of 2018 disappointed market sentiments, declining from the reading in the previous quarter as well.  The yield on the benchmark 10-year gilts, jumped 2-1/2 basis points to 1.178 percent, the super-long 30-year bond yields surged nearly 2 basis points to 1.689 percent while the yield on the short-term 2-year traded 1-1/2 basis points higher at 0.718 percent.

The Australian government bonds started week on disappointing note across the curve during Asian trading session despite worries surrounding the U.S.-China trade war and slowing global economic growth. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose about 1/2 basis point to 2.098 percent, the yield on the long-term 30-year bond also climbed 1/2 basis point to 2.66 percent and the yield on short-term 2-year jumped 2-1/2 basis points to 1.74 percent.

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March 26 04:00 UTC Released

THManufacturing Prod YY

Actual

-1.6 %

Forecast

0.52 %

Previous

0.18 %

March 25 21:45 UTC Released

NZTrade Balance YY

Actual

-6.62 Bln NZ

Forecast

Previous

-6.36 Bln NZ

January 31 00:00 UTC 603609603609m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 603609603609m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 615429615429m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 603609603609m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 615429615429m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 603609603609m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 603609603609m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 603609603609m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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