Market Roundup
• Britain's May heads for defeat in Brexit vote
• US Feb CPI MM, SA, 0.2%, 0.2% forecast, 0.0% previous
• US Feb CPI YY, NSA, 1.5%, 1.6% forecast, 1.6% previous
• Fed's Brainard: More flexible community law could help credit "deserts"
• Deal or no deal, U.S.-China trade talks may end in weeks -Lighthizer
• US Feb NFIB Business Optimism Idx, 101.70 forecast, 101.20 previous
• US Feb Core CPI YY, NSA, 2.1%, 2.2% forecast, 2.2% previous
• US Feb Core CPI MM, SA, 0.1%, 0.2% forecast, 0.2% previous
• Pompeo to meet oil execs, push U.S. crude exports, Iran policy -sources
• ECB will tailor new loans to reduce demand, sources say
Looking Ahead - Economic Data (GMT)
• 12 Mar 23:50 Japan Feb Corp Goods Price YY, 0.7% forecast, 0.6% previous
• 12 Mar 23:50 Japan Feb Corp Goods Price MM, 0.1% forecast, -0.6% previous
• 12 Mar 23:50 Japan Jan Machinery Orders YY, -2.3% forecast, 0.9% previous
• 12 Mar 23:50 Japan Jan Machinery Orders MM, -1.7% forecast, -0.1% previous
Looking Ahead - Events, Other Releases (GMT)
• N/A British Finance Minister Philip Hammond delivers his spring statement in London
• 08:30 ECB executive board member Yves Mersch chairing panel at FSI 20th anniversary conference "A cross-sectoral reflection on the past, and looking ahead to the future", organised by the Financial Stability Institute at Bank for International Settlements in Basel, Switzerland
• 08:45 ECB supervisor Ignazio Angeloni speaks at an event organised by economic policy think tank Itinerari Previdenziali in Rome
• 17:00 ECB board member Benoit Coeure delivers a speech at Universita Bocconi in Milan
Currency Summaries
EUR/USD: The euro strengthened against the U.S. dollar on Tuesday, after U.S. consumer prices showed that inflation remains low despite a tight labor market, bolstering the Federal Reserve's case for keeping interest rates on hold. The Consumer Price Index rose for the first time in four months in February, but the pace of the increase was modest, resulting in the smallest annual gain in nearly 2-1/2 years. The euro was 0.40 percent stronger against the dollar, last priced at $1.1289. Immediate resistance can be seen at 1.1307 (11 DMA), an upside break can trigger rise towards 1.1367 (61.8% retracement level).On the downside, immediate support is seen at 1.1241 (38.2% retracement level), a break below could take the pair towards 1.1176 (7th March low).
GBP/USD: Sterling declined against the dollar on Tuesday, after British Prime Minister Theresa May's Brexit plan failed to win a confidence vote in parliament. The British Parliament rejected May's deal to quit the European Union for a second time, deepening the country's worst political crisis for generations, 17 days before the planned departure date. The pound fell to low of $1.3002, down more than half a percent on the day, after earlier trading above $1.3140. Immediate resistance can be seen at 1.3102 (38.2% retracement level), an upside break can trigger rise towards 1.3149 (50% retracement level).On the downside, immediate support is seen at 1.3044 (23.6% retracement level), a break below could take the pair towards 1.3000 (Psychological level).
USD/CAD: The Canadian dollar strengthened to a nearly one-week high against its U.S. counterpart on Tuesday, as oil prices rose and after tame U.S. inflation data weighed on the greenback. The price of oil, one of Canada's major exports, was supported by signs of tightening global supply after a Saudi official said the kingdom planned to cut oil exports in April, while the U.S. government reduced its forecast for domestic crude output growth. The Canadian dollar was trading 0.23 percent higher at 1.3362 to the greenback. The currency touched its strongest level since March 6 at 1.3353.Immediate resistance can be seen at 1.3413 (5 DMA), an upside break can trigger rise towards 1.3433 (38.2% retracement level).On the downside, immediate support is seen at 1.3288 (61.8% retracement level), a break below could take the pair towards 1.3267 (50 DMA).
USD/JPY: The dollar was little changed against the Japanese yen on Tuesday, after a tame reading on U.S. inflation reinforced expectations the Federal Reserve will not raise interest rates anytime soon. U.S. consumer prices rose for the first time in four months in February but the modest pace of the increase resulted in the smallest annual gain in inflation in nearly 2-1/2 years. The dollar index, which measures the greenback against a basket of six rivals, fell, and was last down 0.02 percent on the day to 96.93.Strong resistance can be seen at 114.00 (Psychological level), an upside break can trigger rise towards 114.54 (Oct 3rd high).On the downside, immediate support is seen at 110.86 (50% retracement level), a break below could take the pair towards 110.34 (61.8% retracement level).
Equities Recap
European shares ended flat on Tuesday, after a choppy session during which hopes British Prime Minister Theresa May would win support for her plans for an orderly Brexit in an evening vote in Parliament gradually faded.
UK's benchmark FTSE 100 closed up by 0.4 percent, the pan-European FTSEurofirst 300 ended the day down by 0.04 percent, Germany's Dax ended down by 0.01 percent, France’s CAC finished the day up by 0.2 percent.
The S&P 500 and Nasdaq rose on Tuesday after tame inflation data underscored the Federal Reserve's dovish stance on rate hikes, but the Dow ended down as Boeing's shares sank for a second day after one of its planes crashed in Ethiopia.
Dow Jones closed down by 0.36 percent, S&P 500 ended up by 0.30 percent, Nasdaq finished the day up by 0.43 percent.
Treasuries Recap
U.S. Treasury yields tumbled on Tuesday, pressured by weak inflation data for the world's largest economy, supporting expectations the Federal Reserve will hold interest rates steady this year, as well as worries about Britain's exit from the European Union.
In afternoon trading, U.S. 10-year note yields fell to 2.601 percent , down from 2.641 percent late on Monday. Earlier in the session yields hit a 10-week low.
U.S. 30-year bond yields were down at 2.987 percent , from 3.032 percent on Monday, after earlier sliding to a three-week trough.
Commodities Recap
Gold gained on Tuesday, as the dollar slipped after tame U.S. inflation data supported the Federal Reserve's 'patient' stance on interest rate hikes, while investors awaited a key Brexit vote later in the day.
Spot gold rose 0.4 percent to $1,301.44 per ounce as (2113 GMT), while U.S. gold futures settled 0.5 percent higher at $1,297.70.
Oil prices edged higher on Tuesday, supported by signs of tightening global supply after a Saudi official said the kingdom plans to cut oil exports in April, while the U.S. government reduced its forecast for domestic crude output growth.
Brent crude futures rose 9 cents, or 0.1 percent, to settle at $66.67 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 8 cents, or 0.1 percent, to settle at $56.87 a barrel.
