Market Roundup
- Canadian building permits drops 9.8% in Jan, housing starts jump as Ontario, B.C. markets sizzle.
- BOE's Cunliffe: negotiating new trade deals could take 5-yrs after tem sod Brexit agreed.
- BoE's Carney: leaving EU is biggest domestic risk to financial stability, banks could move UK business to Ireland/Continental Europe, after Brexit; expects reduction in FDI if UK leaves EU.
- BOE's Weale: rates still likely to rise, scope for stimulus if needed.
- Markets expect rate cuts & more QE from ECB, Yields lower before Thursday's ECB meeting.
- JPY & CHF advance as Chinese data weighs on risk, ECB seen likely to ease, but investors ponder extent.
- Gold holds its ground on weaker dollar and lower shares.
- Brazil's Marcelo Odebrecht gets 19-yr sentence in "operation car wash"/PBR scandal.
Looking Ahead - Economic Data (GMT)
- 21:45 New Zealand Election Card Retail Sales month*Feb 0.3%-previous
- 21:45 New Zealand Election Card Retail Sales YY*Feb 5.2%- previous
- 23:30 Australia Consumer Sentiment *Mar 4.2%- previous
- 00:30 Australia Housing Finance* Jan forecast -2.3%, 2.6%- previous
- 00:30 Australia Invest Housing Finance*Jan 0.6%- previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0970 levels and currently trading at 1.1006 levels. The pair has made session high at 1.1057 and hit lows at 1.0994 levels. The dollar eased against euro on Tuesday as weak Chinese trade data drove investors towards the euro widely used to fund positions in riskier assets. The data showed China's February trade performance was far worse than economists had expected, with exports tumbling the most in more than six years. The 16th-straight monthly decline in imports weighed on stocks in the basic materials sector. Meanwhile, Investors are awaiting Thursday's European Central Bank announcement. The bank is expected to announce more monetary stimulus measures on Thursday to boost ultra-low inflation and sluggish growth in the euro zone. The euro was down 0.05 percent at $1.1005, holding in a tight range against the dollar.
GBP/USD is supported in the range of 1.4155 and currently trading at 1.4213 levels. It reached session high at 1.3245 and hit low at 1.3168 levels. Sterling slipped lower against the dollar on Tuesday as the sterling was dragged down by weak European shares which slipped to a one-week low on Tuesday. The pound also suffered along with the dollar as the weak data from China reignited worries about a global economic slowdown, while oil prices pulled back from recent strong gains. China's February trade performance was far weaker than economists had expected, with exports tumbling the most in more than six years, days after Beijing sought to reassure investors that the outlook for the world's second-largest economy is solid. Sterling fell 0.4 percent against the dollar to $1.4215 on weak European stocks and concerns about a potential exit by Britain from the European Union.
USD/CAD is supported at 1.3370 levels and is trading at 1.3412 levels. It has made session high at 1.3415 and lows at 1.3306 levels. The Canadian dollar weakened against its U.S. counterpart on Tuesday as weak Chinese data weighed on risk appetite and oil prices turned lower, but still held near 3-1/2-month highs ahead of the Bank of Canada policy decision on Wednesday. The Bank of Canada is expected to hold interest rates at 0.50 percent as it waits to see what impact the government's expected spending measures will have on the economy. The currency has rebounded roughly 10 percent since hitting a 12-year low on Jan. 20 at C$1.4689 when the central bank surprised many traders by not cutting rates. The currency's strongest level of the session was C$1.3308, while its weakest was C$1.3410.
USD/JPY is supported around 112.00 levels and currently trading at 112.57 levels. It hit session high at 112.96 and made session lows at 112.40 levels. The dollar declined against Japanese Yen on Tuesday as weak Chinese trade balance stoked safe-haven demand for the yen on Tuesday as investors shed holdings of stocks and other risky investments on renewed concerns about a slowing global economy. China's exports slumped 25.4 percent in February from a year earlier, the steepest drop since May 2009, while imports dropped 13.8 percent for a 16th consecutive monthly fall. The dollar was down 0.8 percent at 112.56 yen after hitting a one-week low of 112.41. The euro slipped 0.8 percent at 123.92 yen. The next main market focus is Thursday's policy review by the European Central Bank, followed by the U.S. Federal Reserve's policy meeting on March 15- ECB is expected to ease monetary policy, but investors are uncertain about how far it will go.
Equities Recap
European shares slipped to a one-week low on Tuesday, after poor trade data from China, the world's top metals consumer, put pressure on industrial metals prices and the mining sector.
Britain's blue-chip FTSE 100 index closed down by 0.9 percent, France's benchmark CAC-40 index closed down by 0.9 percent, Germany's DAX ended down 0.9 percent, meanwhile the pan-European Eurofirst 300 index was down by 0.90 percent.
U.S. stocks fell on Tuesday after soft Chinese trade data rekindled fears that the global economy is weaker than anticipated and a decline in crude prices brought down energy shares.
Dow Jones closed down by 0.64 percent, S&P 500 ended down by 1.12 percent, Nasdaq finished the day down by 1.23 percent.
Treasuries Recap
U.S. Treasury yields fell on Tuesday in line with Japanese yields after weak Chinese data revived fears of a global economic slowdown, increasing demand for safe-haven U.S. government debt ahead of a 3-year note auction.
The benchmark 10-year note yield was last up 26/32 in price to yield 1.811 percent, down from 1.904 percent late on Monday.
The 30-year bond was last up 1-28/32 in price to yield 2.608 percent, down from 2.703 percent late on Monday.
Commodities Recap
Gold hovered just below a 13-month high on Tuesday, supported by a weaker dollar and lower global shares after Chinese trade data fuelled concerns about the state of global demand.
Spot gold was down 0.4 percent at $1,262.46 an ounce by 3:10 p.m. EST (2010 GMT), after rising to $1,277.81. U.S. gold for April delivery settled down 0.1 percent at $1,262.90.
Oil prices fell 3 percent on Tuesday, retreating after six days of gains for benchmark Brent crude, as Goldman Sachs suggested the rally was unsustainable and analysts predicted U.S. stockpiles reached record highs again last week.
Brent settled down $1.19, or 2.9 percent, at $39.65 a barrel after hitting a 2016 high of $41.48 during the session. Despite the decline, it was still up 46 percent from a 12-year low of $27.10 struck on Jan. 20.
U.S. crude closed down $1.40, or 3.7 percent, at $36.50, after rallying earlier in the day to a three-month high of $38.39.
