Market Roundup
- EUR/USD -0.25%, USD/JPY +0.1%, GBP/USD flat, DXY +0.1%
- DAX +0.1%, FTSE -0.05%, Brent -0.5%, Gold -0.2%, Copper -0.6%
- Dollar near 1-week high, buoyed by euro weakness
- EZ Mar Economic sentiment 107.9 vs previous 108. 108.3 forecast
- EZ Mar Consumer confidence final -5.0 vs previous -5.0. -5.0 forecast
- German state of Saxony CPI +0.2 pct m/m, +1.8 pct y/y in Mar vs previous 0.5%/2.4%
- Britain does not expect 50 bln stg Brexit bill-Davis
- Britain not threatening Europe over security cooperation-Davis
- France Hollande tells May talks on future EU-UK relations must wait
- ECB Nowotny: Important to analyze future economic development
- ECB Liikanen: Our commitment to forward guidance remains
- Switzerland KOF indicator 107.6 pts in Mar vs forecast of 106.0. Feb revised to 106.9
- South Africa's ruling party leaders split over Gordhan's fate
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 13,000 to a seasonally adjusted 248,000 for the week ended Mar. 25 while continuing claims for the week ended Mar. 10 stood at 2.0 m.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that gross domestic product increased at a 2.0 percent annual rate in the fourth quarter after expanding at a 1.9 percent pace in the third quarter.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) prices for the fourth quarter. The index is expected to rise 2.1 percent from 1.9 percent in the previous quarter, while core PCE is likely to increase 1.2 percent after posting similar in the third quarter.
- (0830 ET/1230 GMT) The Statistics Canada releases its Raw Material Price Index for the month of February. The index posted a rise of 1.7 percent in January.
- (0830 ET/1230 GMT) The Statistics Canada will report its industrial producer prices for the month of February. The indicator rose 0.4 percent in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending March 24.
- (1500 ET/1900 GMT) Mexico's central bank meets to decide its benchmark interest rate and is likely to raise it to 6.50 percent again from 6.25 percent.
- (1700 ET/2100 GMT) Mexico reports fiscal balance for the month of February. The economy posted a deficit of -29.62 billion pesos in the prior month.
Key Events Ahead
- (0945 ET/1345 GMT) Cleveland Fed President Loretta Mester will speak on "Payment System Improvement" before the closed Tenth Annual Risk Conference co-hosted by the Federal Reserve Bank of Chicago and the DePaul University Center for Financial Services.
- (1115 ET/1515 GMT) Federal Reserve Bank of New York President William Dudley speaks before the Financial Literacy Day and Laboratory Dedication hosted by the University of South Florida (USF), in Sarasota.
- (1500 ET/1900 GMT) Dallas Fed President Robert Kaplan participates in a moderated Q/A session before the U.S. Chamber of Commerce 11th Annual Capital Markets Summit in Washington.
- (1530 ET/1930 GMT) FedTrade 15-year Fannie Mae/Freddie Mac securities (max $525 mn)
- N/A San Francisco Fed chief John Williams participates in a panel before the Strong, Prosperous and Resilient Communities Challenge event in New York.
FX Beat
DXY: The dollar turned lower, reversing some of its early gains versus its major peers following a fall in the U.S. Treasury yields. The greenback against a basket of currencies traded 0.1 percent up at 100.06, retreating from a low of 98.89 hit on Monday, its lowest since Nov. 11. FxWirePro's Hourly Dollar Strength Index stood at 15.83 (Neutral) by 1000 GMT.
EUR/USD: The euro tumbled to a fresh 1-week low after data showed Eurozone's economic sentiment slightly dipped as confidence in industry and services fell. The European currency traded 0.2 percent down at 1.0743, having touched a low of 1.0730 earlier, its lowest since Mar. 21. FxWirePro's Hourly Euro Strength Index stood at -95.59 (Slightly Bearish) by 1000 GMT. On the lower side, any break below 1.07350 confirms minor weakness, a decline till 1.07000 is possible. Any break below 1.0700 (50% retracement of 1.04948 and 1.09058) will drag the pair till 1.06500/1.0600. The major resistance is around 1.08200 and any violation above will take it to next level till 1.0880/1.0906.
USD/JPY: The dollar trimmed gains after rising to a 6-day high earlier in the session, as a decline in the U.S. Treasury bond yields failed to support the greenback's overnight recovery mode. Moreover, a slightly weaker sentiment around equity markets strengthened the safe haven Japanese Yen's demand. The pair traded flat at 111.07, having hit an early high of 111.42, its highest since Mar. 24. FxWirePro's Hourly Yen Strength Index stood at -63.52 (Bearish) 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 steadied above the 1.2400 handle as investors awaited responses from European leaders after Prime Minister Theresa May formally began Britain's separation procedure from the European Union the day before. It will now take around 2 years for the process to complete and officially declare Britain no more a member of the EU bloc. The major traded flat at 1.2440, having hit a low of 1.2376 in the previous session, its lowest since Mar. 21. FxWirePro's Hourly Sterling Strength Index stood at 24.62 (Neutral) by 1000 GMT. On the lower side, near term support is around 1.2375 and any break below will drag the pair down till 1.23200/1.2260/1.2200/1.2108 (Mar 14 low). The near term resistance is around 1.2480 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 0.3 percent higher at 86.29 pence, rebounding from a low of 87.34 touched in the prior session, its lowest since Mar 17.
USD/CHF: The Swiss franc rose after falling to an early 1-week low as the greenback eased following a decline in the U.S. Treasury yields. The major traded 0.1 percent lower at 0.9952, pulling away from a high of 0.9980, its strongest since Mar. 21. FxWirePro's Hourly Swiss Franc Strength Index stood at -64.92 (Slightly Bearish) by 1000 GMT. The pair should break 1.0170 for further bullish confirmation. The near-term resistance are at 1.00783 (61.8% retracement of 1.03435 and 0.9813) /1.0120. On the lower side, near term support is around 0.9912 (200- day MA) and any break below 0.9912 targets 0.98600/0.98100.
AUD/USD: The Australian dollar rallied to 1-week peak as prevalent negative tone surrounding the U.S. Treasury bond yields dragged the U.S. dollar lower across the board. The pair trades 0.14 percent up at 0.7677, having hit an early high of 0.7679, it’s highest since Mar. 22. FxWirePro's Hourly Aussie Strength Index stood at 149.48 (Highly Bullish) by 1000 GMT. On the lower side, the next immediate support stands at 0.75875 (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 nudged up in early deals, strengthened by a rise in oil stocks, while the euro declined as investors rolled back expectations of the European Central Bank tightening its monetary policy.
The pan-European STOXX 600 index gained 0.06 percent to 378.77 points, while the FTSEurofirst 300 index rose 0.03 percent to 1,494.14 points.
Britain's FTSE 100 trades 0.04 percent down at 7,370.57 points, while mid-cap FTSE 250 gained 0.12 percent to 19,001.31 points.
Germany's DAX edged up 0.1 percent at 12,214.58 points; France's CAC 40 trades 0.05 percent lower at 5,066.40 points.
Tokyo's Nikkei fell 0.80 percent to 19,063.22 points, Australia's S&P/ASX 200 index rose 0.39 percent to 5,896.60 points and South Korea's KOSPI lost 0.11 percent to 2,164.64 points.
Shanghai composite index eased 1.0 percent to 3,210.24 points, while CSI300 index dropped 0.8 percent to 3,436.76 points. Hong Kong’s Hang Seng shed 0.4 percent to 24,301.09 points.
Commodities Recap
Crude oil prices declined after rising to multi-week highs as record U.S. inventories offset the impact of supply disruptions in Libya and OPEC-led production cuts. International benchmark Brent crude was trading 0.5 percent down at $52.14 per barrel by 0931 GMT, having hit an early high of $52.54, its strongest since Mar. 16. U.S. West Texas Intermediate crude fell 0.4 percent to $49.39 a barrel, after rising as high as $49.72 earlier, its highest since Mar. 10.
Gold prices declined, reversing most of its previous session gains as the dollar strengthened. However, the downside was limited as uncertainty surrounding the impact of Britain's departure from the European Union and upcoming French elections offered some support to the safe haven metal. Spot gold fell 0.3 percent at $1,249.59 an ounce by 0935 GMT, having touched a peak of $1,260.90 on Monday, its highest its Feb. 27. U.S. gold futures slipped 0.3 percent at $1,250.
Treasuries Recap
The U.S. Treasuries climbed as investors wait to watch the Federal Open Market Committee (FOMC) members Mester, Kaplan and Williams’ speech, scheduled to be held later in the day. The yield on the benchmark 10-year Treasury fell nearly 1 basis point to 2.38 percent, the super-long 30-year bond yields also slipped 1 basis point to 2.98 percent and the yield on short-term 2-year note traded flat at 1.27 percent.
The UK gilts jumped after Prime Minister Theresa May invoked the Article 50 of the Brexit Negotiations. The yield on the benchmark 10-year gilts, slumped 2-1/2 basis points to 1.12 percent, the super-long 30-year bond yields also plunged nearly 2-1/2 basis points to 1.72 percent while the yield on the short-term 2-year also traded 2 basis points down at 0.12 percent.
The German bunds gained, following expectations of a fall in the country’s consumer price inflation during the month of March. The yield on the benchmark 10-year bond slumped nearly 1-1/2 basis points to 0.33 percent, the long-term 30-year bond yields fell 1 basis point to 1.10 percent and the yield on the short-term 3-year bond traded 1 basis point lower at -0.65 percent.
The Japanese government bonds slumped on expectations of an improvement in the country’s consumer price inflation (CPI) during the month of February. The benchmark 10-year bond yield, rose 1 basis point to 0.06 percent, while the long-term 30-year bond yields jumped nearly 1-1/2 basis points to 0.83 percent and the yield on the short-term 2-year note traded nearly 2 basis points higher at -0.23 percent.
The New Zealand bonds ended the session on a slightly higher note as investors covered previous short positions amid a session that witnessed data of little economic significance. The yield on the benchmark 10-year bond, fell 1 basis point to 3.20 percent at the time of closing, the yield on 7-year note climbed 1/2 basis point to 2.80 percent while the yield on short-term 2-year note also traded 1 basis point lower at 2.15 percent.
The Australian bonds rebounded as investors await to watch the country’s retail sales during the month of February as well as the Reserve Bank of Australia’s (RBA) monetary policy decision, scheduled to be held next week. The yield on the benchmark 10-year Treasury note, slumped 3-1/2 basis points to 2.70 percent, the yield on 15-year note also plunged 3-1/2 basis points to 3.08 percent and the yield on short-term 2-year also traded 1 basis point lower at 1.75 percent.
