Market Roundup
- EUR/USD -0.1%, USD/JPY +0.1%, GBP/USD -0.4%, DXY +0.1%
- DAX +0.3%, CAC -0.1%, Brent -0.6%, Gold -0.25%, Copper +0.3%
- GBP/USD hit new 7-week low at 1.2146 ahead of UK budget
- Gold hit its lowest since Feb 3 at USD1,210.92/oz
- Greek economy flat last year, stats service says
- Germany Jan Industrial Output 2.8% m/m vs previous -2.4% revised 2.5% forecast
- Switzerland Feb CPI 0.5% m/m, 0.6% y/y vs previous 0.0%/0.3%
- China posts first monthly trade deficit in 3 years as imports soar
- China to keep yuan broadly stable, allow more fluctuations
- Poland's central bank keeps rates flat, as expected
Economic Data Ahead
- (0815 ET/1315 GMT) Payrolls processor ADP releases U.S. employment report for the month of February. The report is expected to show that private employers added 190,000 jobs as compared with 246,000 jobs in January.
- (0815 ET/1315 GMT) Canadian Mortgage and Housing Corp will report housing starts for the month of February. The indicator is expected to slightly decline at a seasonally adjusted annualized rate to 200,000 after increasing 207,400 in the previous month.
- (0830 ET/1330 GMT) The U.S. Labor Department will release labor costs report for the fourth quarter. The indicator is expected to nudge up 1.6 percent after posting a gain of 1.7 percent in the previous quarter.
- (0830 ET/1330 GMT) The U.S. Labor Department is likely to report that non-farm productivity rose 1.5 percent in the fourth quarter from 1.3 percent in the previous quarter.
- (0830 ET/1330 GMT) The Statistics Canada releases labor productivity data for the fourth quarter. The economy's productivity advanced 1.2 percent in the third quarter.
- (0830 ET/1330 GMT) The Statistics Canada is likely to report that building permits rose 5.0 percent in January, after declining 6.6 percent in December.
- (1000 ET/1500 GMT) The U.S. Census Bureau is likely to report that wholesale inventories remained unchanged at -0.1 percent in January.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending March 3.
- (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending March 3.
- (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending March 3.
Key Events Ahead
- (1430 ET/1930 GMT) FedTrade operation 30-yr Fannie Mae/Freddie Mac (max $1.90 bn).
FX Beat
DXY: The dollar rose versus its major peers following a rise in the Treasury yields across the curve in wake of growing prospects of a March Fed rate hike. The greenback against a basket of currencies traded 0.1 percent up at 101.91, having hit a high of 101.99 earlier. FxWirePro's Hourly Dollar Strength Index stood at 137.41 (Highly Bullish) by 1100 GMT.
EUR/USD: The euro slumped, extending losses for the third straight day, as the U.S. dollar gathered significant strength across the board following a rise in the treasury yields. Meanwhile, investors will remain cautious ahead of the ECB monetary policy decision due tomorrow, which it is widely expected to keep rates on hold and remain neutral on the policy stance. The European currency traded lower at 1.0557, having hit a low of 1.0547 earlier in the session. FxWirePro's Hourly Euro Strength Index stood at 54.62 (Bullish) by 1100 GMT. Intraday bias is still bearish as long as resistance 1.05800 holds and any break above will take the pair till 1.06400/1.0660 level. On the lower side, major support is around 1.04900 short term low formed at Feb 22 and any break below targets 1.04500/1.03400.
USD/JPY: The dollar rose for a third consecutive session on the back of rising U.S. treasury yields and growing prospects for an eventual Fed rate hike move during the next monetary policy meeting on March 14-15. Investors now await non-farm payrolls data for February due later in the day, which is expected to rise to 190,000 jobs as compared with 246,000 jobs in January. The major traded 0.1 percent higher at 114.06, retreating from an early low of 113.60. FxWirePro's Hourly Yen Strength Index stood at 32.62 (Neutral) by 1100 GMT. The minor resistance is around 114.95 (Feb 15 high) and any break above will take the pair till 115.94. On the lower side, minor support is around 113.45 (21- day EMA) and any break below 112 will drag it till 111.65/111.
GBP/USD: Sterling tumbled to a seven-week low against the dollar as investors await British budget. Finance minister Philip Hammond is expected to raise economic forecasts and target curbing a big fiscal deficit. Moreover, UK PM Theresa May's second defeat on the Brexit bill in the House of Lords on Tuesday renewed Brexit concerns, which intensified selling pressure around the major. Sterling trades 0.4 percent lower at 1.2148, having hit a low of 1.2145 earlier, its weakest since Jan. 17. FxWirePro's Hourly Sterling Strength Index stood at -112.75 (Highly Bearish) by 1100 GMT. On the lower side, break below 1.2200 confirms minor weakness, a decline till 1.2080 is likely. The minor intraday bullishness can happen only above 1.2260 (5- day MA) and any break above will take the pair till 1.2300 (Mar 3rd high)/ 1.2350 (Support turned into resistance). Against the euro, the pound trades 0.4 percent down at 86.93 pence, having hit a 7-week low of 86.95 earlier in the session.
USD/CHF: The Swiss franc gained after retreating from multi-week lows following a rise in the Swiss National Bank's foreign exchange reserves. However, statements from SNB Chairman Thomas Jordan that the franc was significantly over-valued hurt the Swiss currency. The major traded lower at 1.0130, having hit a high of 1.0170 in the previous session, its strongest since Jan. 11. FxWirePro's Hourly Swiss Franc Strength Index stood at 48.87 (Neutral) by 1100 GMT. The pair is facing strong trend line support around 1.0680 (trend line joining 0.98696 and 0.99636) and any minor bearishness can be seen below that level. On the higher side, 1.0160 (61.8% retracement of 1.03436 and 0.98696) will be acting as major resistance and any close above will take it till 1.0200/1.02480 (Jan 11th high).
AUD/USD: The Australian dollar dropped after Chinese trade balance data showed an unexpected deficit for February. Moreover, growing prospects for an eventual March Fed rate-hike action and weaker sentiment around the commodity kept the pair from making any meaningful recovery from Friday's four-week lows. The Aussie trades 0.34 percent up at 0.7558, having touched a high of 0.7632 in the previous session, it’s highest since Mar. 2. FxWirePro's Hourly Aussie Strength Index stood at -104.76 (Highly Bearish) by 1100 GMT. On the lower side, the major support stands at 0.7539 (100- day EMA) and any break below will drag the pair down till 0.7520 (200- day MA)/0.74450 (Jan 13th low). The major resistance is around 0.7636 (21- day EMA) and a break above will take it till 0.7680/0.7740.
Equities Recap
European shares rose in early deals following significant company earning, while the euro eased to a 5-day low ahead of European Central Bank Policy meeting.
The pan-European STOXX 600 index increased 0.13 percent to 372.75 points, while the FTSEurofirst 300 index rose 0.12 percent to 1,470.62 points.
Britain's FTSE 100 trades 0.04 percent higher at 7,341.98 points, while mid-cap FTSE 250 added 0.08 percent to 18,901.70 points.
Germany's DAX edged up 0.36 percent at 12,009.47 points; France's CAC 40 trades 0.05 percent higher at 4,957.65 points.
Tokyo's Nikkei eased 0.47 percent to 19,254.03 points, Australia's S&P/ASX 200 index fell 0.08 percent to 5,756.60 points and South Korea's KOSPI gained 0.06 percent to 2,095.41 points.
Shanghai composite index dropped 0.1 percent to 3,240.66 points, while CSI300 index slumped 0.2 percent to 3,448.73 points. Hong Kong’s Hang Seng shed 0.4 percent to 23,782.27 points.
Commodities Recap
Crude oil prices rose after tumbling more than 1 percent in the previous session on an industry report, which showed more-than-forecast 11.6 million barrels rise in crude inventories in the United States. International benchmark Brent crude was trading 0.2 percent up at $55.68 per barrel by 1021 GMT, having hit a high of $56.61 on Tuesday, its highest since Mar. 1. U.S. West Texas Intermediate crude trades flat at $52.76 a barrel, after rising to a peak of $53.77 the day before, its strongest since Mar. 1.
Gold prices fell to a near five-week low earlier in the session as expectations for a U.S. rate hike in March boosted the bid tone around the greenback. Spot gold edged down 0.16 percent to $1,213.50 per ounce at 1024 GMT, having hit its lowest since Feb. 3 at $1,211.32 an ounce earlier in the day.
Treasuries Recap
The U.S. Treasuries plunged ahead of the 10-year auction scheduled to be held later in the day and the labor market report that follows it. The yield on the benchmark 10-year Treasury jumped 2-1/2 basis points to 2.53 percent, the super-long 30-year bond yield also rose 2 basis points to 3.13 percent and the yield on short-term 2-year note traded nearly 1 basis point higher at 1.33 percent.
The UK gilts slumped in mild trading session ahead of the Bank of England’s (BoE) monetary policy meeting next week. The yield on the benchmark 10-year gilts, rose 1-1/2 basis points to 1.20 percent, the super-long 30-year bond yields also rose nearly 1 basis point to 1.80 percent and the yield on the short-term 2-year remained flat at 0.10 percent.
The German government bunds slid as investors remain keen to watch the European Central Bank’s (ECB) monetary policy decision scheduled to be held on March 9. The yield on the benchmark 10-year bond, jumped 3-1/2 basis points to 0.35 percent, the long-term 30-year bond yields rose nearly 3 basis points to 1.18 percent and the yield on the short-term 3-year bond traded nearly 1 basis point higher at -0.75 percent.
The Japanese government bonds traded flat as investors digested the upswing in the country’s fourth-quarter gross domestic product (GDP). The benchmark 10-year bond yield, hovered around 0.07 percent, while the long-term 30-year bond yields jumped 3 basis points to 0.87 percent while the yield on the short-term 2-year note traded flat at -0.28 percent.
The New Zealand government bonds gained modestly at the time of closing, following a drop in global dairy prices at the latest GlobalDairyTrade price auction held late yesterday. The yield on the benchmark 10-year bond, fell 1 basis point to 3.34 percent at the time of closing, the yield on 7-year note also slipped nearly 1 basis point to 2.90 percent and the yield on short-term 5-year note also traded 1 basis point lower at 2.61 percent.
The Australian bonds continued to slump as investors cashed in profits after the Reserve Bank of Australia (RBA) remained on hold at the latest monetary policy meeting held yesterday, hinting at no further policy easing in the near-term. The yield on the benchmark 10-year Treasury note, jumped nearly 5 basis points to 2.87 percent, the yield on 15-year note also climbed nearly 5 basis points to 3.28 percent while the yield on short-term 1-year traded 1 basis point lower at 1.61 percent.
