Market Roundup
- USD/JPY +0.01%, EUR/USD -0.05%, GBP/USD +0.21%
- USD/ZAR hits 13.1150 6% above Mon’s 12.3125 low: Modest recovery into NY
- DXY -0.02%, DAX +0.55%, Brent +0.75%, Iron -2.6%, Gold -0.02%
- Riksbank’s Ingves not home yet when it comes to inflation
- Oil production halted at Libya’s Sharara and WAFA oil fields – Nat Oil Corp Source
- Just after 1100 GMT Wed, May delivers A50 to EU’s Tusk notifying him formally of exit
- EU officials expect signed letter to be delivered from Britain's EU embassy
- BoE's 2017 theoretical stress test shocks for 7 banks, published Mon, including cable fall to 0.85
- Sweden Feb Retail Sales +2.7% y/y vs 2.2% previous, 2.4% expected
- ZAR taken lower again on Gordhan recall news USD/ZAR to 13.1150
- Japan EconMin Ishihara – Closely watching market moves
- PBOC to provide financial support for manufacturing upgrades
- Transparency Int’l – ECB needs greater oversight, accountability
Economic Data Ahead
- (0800 ET/1200 GMT) The S&P/Case-Shiller is expected to report that U.S. home price index of 20 metropolitan areas rose at an annualized rate of 5.7 percent in January, after rising 5.6 percent in December.
- (0830 ET/1230 GMT) The U.S. Census Bureau report its preliminary wholesale inventories data for the month of February. The indicator rose -0.2 percent in the prior month.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of February. The economy recorded a trade deficit of $69.2 billion in the previous month.
- (0900 ET/1300 GMT) The Conference Board is likely to report that U.S. consumer confidence index declined to 113.8 in March from a reading of 114.8 recorded in February.
- (1000 ET/1400 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for February. The index rose to 17 in the prior month.
- (1400 ET/1800 GMT) The Argentine government is due to release trade balance data for the month of February.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1950 ET/2350 GMT) Japan's Ministry of Economy, Trade and Industry releases retail trade data for the month of February. The indicator is likely to post an annualized rise of 0.5 percent after rising1.0 percent in the prior month.
Key Events Ahead
- (1005 ET/1405 GMT) Bank of Canada Governor Stephen Poloz delivers a speech on economic history in Oshawa, Canada.
- (1045 ET/1445 GMT) FedTrade 30-yr Fannie Mae/Freddie Mac secs max $1.275 bln
- (1245 ET/1645 GMT) Kansas City Fed President Esther George speaks on U.S. economy and monetary policy before the "Banking and the Economy: A Forum for Women in Banking" conference in Oklahoma.
- (1250 ET/1650 GMT) Federal Reserve Chair Janet Yellen speaks on "Addressing Workforce Development Challenges in Low-Income Communities" before the National Community Reinvestment Coalition Annual Conference in Washington.
- (1300 ET/1700 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in a moderated Q/A session before the Dallas Committee on Foreign Relations.
- (1630 ET/2030 GMT) Federal Reserve Board Governor Jerome Powell speaks on "America's Central Bank: This History and Structure of the Federal Reserve" before the West Virginia University College of Business and Economics Distinguished Speaker Series in Morgantown.
FX Beat
DXY: The dollar steadied versus its major peers as investors wait for Federal Reserve Chair Janet Yellen’s speech, which could provide further insights on the economy's monetary policy outlook. The greenback against a basket of currencies traded up at 99.27, retreating from a low of 98.89 touched on Monday, its lowest since Nov. 11. FxWirePro's Hourly Dollar Strength Index stood at -2.84 (Neutral) by 1000 GMT.
EUR/USD: The euro slightly edged down as investors booked profits on their U.S. dollar shorts after the recent sell-off. However, broad-based greenback weakness following the setback of healthcare reform bill continued to lend support to the major. The European currency traded flat at 1.0860, having touched a high of 1.0905 the day before, its highest since Nov. 11. FxWirePro's Hourly Euro Strength Index stood at 45.81 (Neutral) by 1000 GMT. The pair faces major intraday support at 1.0820 and a break below will drag it down till 1.07985 (61.8% retracement of 1.07610 and 1.08735)/1.07500. The major resistance is around 1.09300 (61.8% retracement of 1.1299 and 1.03400) and any break above targets 1.0970.
USD/JPY: The dollar steadied after tumbling to a 4-month low in the prior session as investors turned skeptic over the Trump administration's ability to deliver on tax reforms and infrastructure spending. Moreover, a slight improvement in investors' risk appetite dampened the demand around the safe-haven Japanese Yen, which provided some respite to the bulls. The major was little changed at 110.66, having hit a trough of 110.10 the day before, its lowest since Nov. 18. FxWirePro's Hourly Yen Strength Index stood at -3.33 (Neutral) by 1000 GMT. On the higher side, any break above 111.50 (support turned into resistance) will take the pair till 112.20 (38.2% retracement of 115.50 and 110.11)/ 113.07 (55- day EMA). The near term support is around 110 and any break below will drag it till 108.65.
GBP/USD: Sterling rose, hovering towards an eight-week high touched on Monday, as investors turn cautious ahead of Britain's formal launch of negotiations on leaving the European Union on Wednesday. The major trades 0.1 higher at 1.2568, having hit a high of 1.2615 in the previous session, its highest since Feb. 2. FxWirePro's Hourly Sterling Strength Index stood at 1.10 (Neutral) by 1000 GMT. The short term trend is still bullish as long as support 1.25200 holds. Technically, any close above 1.2600 will take the pair till 1.2680/1.2706. On the lower side, 1.2520 (resistance turned into support) will be acting as near-term support and any break below will drag it down till 1.2460/1.2420. Against the euro, the pound traded higher at 86.45 pence, drifting away from a low of 86.73 hit the prior day, its lowest since Mar 22.
USD/CHF: The Swiss franc edged up, extending gains for the third consecutive session as the greenback continued to ease after Trump administration’s inability to push through a key healthcare bill raised doubts over subsequent fiscal policy measures. The major traded lower at 0.9853, hovering towards a low of 0.9813, its weakest since Nov. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at 139.01 (Highly Bullish) by 1000 GMT. On the higher side, 0.9900 will be acting as minor resistance and any break above 0.9960 will take the pair till 1.0000/1.0060 in the short term. The near term support is around 0.9800 and any violation below will drag it down till 0.97800.9740.
AUD/USD: The Australian dollar tumbled to a near 2-week low below the 0.7600 handle as weaker copper and iron prices continued to drag the major. The Aussie trades 0.14 percent down at 0.7605, having hit a low of 0.7587 earlier, it’s lowest since Mar. 15. FxWirePro's Hourly Aussie Strength Index stood at -84.81 (Slightly Bearish) by 1000 GMT. On the lower side, the next immediate support stands at 0.7560 (100 – day EMA) and any break below will drag it down till 0.7540 (200- day MA). The major resistance is around 0.7750 (Feb 23 high) and a break above will take the pair till 0.7800.
Equities Recap
European shares advanced in early trade, strengthened by positive results and dealmaking, while the greenback steadied ahead of Federal Reserve Chair Janet Yellen’s speech.
The pan-European STOXX 600 index gained 0.27 percent to 376.03 points, while the FTSEurofirst 300 index rallied 0.26 percent to 1,482.92 points.
Britain's FTSE 100 trades 0.06 percent down at 7,288.87 points, while mid-cap FTSE 250 eased 0.20 percent to 18,861.94 points.
Germany's DAX edged up 0.62 percent at 12,069.91 points; France's CAC 40 trades 0.03 percent higher at 5,018.79 points.
Tokyo's Nikkei gained 1.14 percent to 19,202.87 points, Australia's S&P/ASX 200 index rose 1.22 percent to 5,817.00 points and South Korea's KOSPI added 0.35 percent to 2,163.31 points.
Shanghai composite index eased 0.4 percent to 3,252.95 points, while CSI300 index dropped 0.2 percent to 3,469.81 points. Hong Kong’s Hang Seng climbed 0.6 percent to 24,345.87 points.
Commodities Recap
Crude oil prices advanced, extending gains for the third straight day, however, increasing U.S. production capped upside. International benchmark Brent crude was trading 0.5 percent up at $51.13 per barrel by 0919 GMT, having hit a low of $49.75 last week, its lowest since Nov. 30. U.S. West Texas Intermediate crude rose 0.6 percent to $48.11 a barrel, after tumbling as low as $47.06 on Monday, its weakest since Nov. 30.
Gold prices held gains near 1-month highs as investors wait to see if U.S. President Donald Trump would be able to deliver promised tax cuts and infrastructure spending. Spot gold was little changed at $1,253.78 per ounce at 0922 GMT, after hitting a high of $1,260.90 the day before, its highest its Feb. 27. U.S. gold futures inched down 0.2 percent to $1,253.60.
Treasuries Recap
The U.S. Treasuries traded lower as investors wait to watch the Federal Reserve Chair Janet Yellen’s speech, scheduled to be held later in the day. The yield on the benchmark 10-year Treasury rose nearly 1 basis point to 2.38 percent, the super-long 30-year bond yields were pushed higher by 1/2 basis point to 2.98 percent and the yield on short-term 2-year note traded flat at 1.27 percent.
The UK gilts traded lower as investors remain keen to watch the country’s fourth-quarter gross domestic product (GDP), due to be release by the end of this week, will also remain crucial in deciding the movements in the money market. The yield on the benchmark 10-year gilts fell over 1 basis point to 1.18 percent, the super-long 30-year bond yields slid also slid 1 basis point to 1.75 percent while the yield on the short-term 2-year traded nearly 1-1/2 basis points down at 0.18 percent.
The German bunds rallied, 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 1-1/2 basis points to 0.39 percent, the long-term 30-year bond yields also plunged nearly 1-1/2 basis points to 1.13 percent and the yield on short-term 2-year bond too traded around 1-1/2 basis points lower at -0.70 percent.
The Japanese government bonds traded mixed as investors remain keen to watch the country’s February retail sales as well as consumer price inflation data, scheduled to be released on March 29 and 31 respectively. The benchmark 10-year bond yield, rose 1 basis point to 0.06 percent, while the long-term 30-year bond yields fell nearly 1 basis point to 0.83 percent and the yield on the short-term 2-year note traded flat at -0.25 percent.
The New Zealand bonds disappointed, tracking weakness in the U.S. counterpart and as investors moved away from safe haven assets amid gains in riskier classes including equities and oil. In intraday trade, the yield on the benchmark 10-year bond, jumped 1-1/2 basis points to 3.21 percent, the yield on 7-year note climbed 2 basis points to 2.81 percent while the yield on short-term 2-year note also traded 2 basis points higher at 2.15 percent.
The Australian bonds gained modestly as investors shrugged off the rebound in consumer confidence, led by improved economic outlook by the households. However, broad gains in equities slightly offset the rise. The yield on the benchmark 10-year Treasury note, slipped 1 basis point to 2.71 percent, the yield on the 15-year note fell 1-1/2 basis points to 3.09 percent and the yield on short-term 1-year also traded 1-1/2 basis points lower at 1.61 percent.
