Market Roundup
• Wall St slips at the open after Brussels attacks, set to end North America near flat.
• US Markit Mfg PMI flash comes in just below forecast (51.4 vs 51.8 forecast).
• U.S. home prices m/m up 0.5 pct in Jan from Dec, +0.6% y/y.
• Fed's Evans: sees two rate hikes this year, more downside risk than upside risk to his forecast, strong USD keeping inflation down.
• US economist Krugman urges Japan to delay tax increase, up spending.
• Brazil's Rousseff says 'will never resign,' urges impartial courts.
• Brazil Supreme Court justice upholds barring of Lula from politics.
• Brazil’s Tombini: Bank not working with hypothesis of easing monetary policy.
Looking Ahead - Economic Data (GMT)
• 23:30 Japan Reuters Tankan DI Mar 7-previous
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Japan BoJ board member Yukitoshi Funo to deliver speech to business leaders in Kobe
Currency Summaries
EUR/USD is likely to find support at 1.1161 levels and currently trading at 1.1217 levels. The pair has made session high at 1.1238 and hit lows at 1.1187 levels. The dollar rose against euro on Tuesday, erasing earlier losses as traders were puzzled leading to global market sell-off in which investors dumped stocks and riskier assets after an attack in Brussels. However, Investor confidence outside Europe improved in afternoon U.S. trading as investors focused on encouraging signs of global growth. This spurred investors to shift from safe-haven currencies to the dollar and higher-yielding currencies. The dollar index, which measures the U.S. currency against six major rivals, rose 0.4 percent to 95.652. The euro fell 0.2 percent to $1.1214 extending its recoil from Thursday's one-month high of $1.1342.
GBP/USD is supported in the range of 1.4188 currently trading at 1.4211 levels. It reached session high at 1.4225 and hit low at 1.4191 levels. Sterling slipped by more than 1 percent against the dollar on Tuesday, as the pair was hit by renewed concerns that deadly terror attack in Brussels further would boost the campaign to take Britain out of the European Union. Following the deadly attack news Sterling fell to a six-day low of $1.4191. Sterling was the day's biggest mover, falling by more than 1 percent to its lowest level against the dollar in a week. On the data front UK consumer inflation numbers offered the pound no support, coming in slightly below forecast and still close to zero in both annual and monthly terms. The UK CPI reading was 0.3%, came at 0.4 sharply below analysts' forecasts and similar to previous month's figures.
USD/CAD is supported at 1.3020 levels and is trading at 1.3042 levels. It has made session high at 1.3107 and lows at 1.3024 levels. The Canadian dollar advanced against the greenback on Tuesday, as a rally in crude prices offset earlier losses .Oil prices steadied after the initial rush to safer assets, with U.S. crude futures off 0.24 percent to $41.42 a barrel while Brent rebounded from a low of $40.97 to trade up 0.43 percent at $41.72.With Brent also hitting the year's peak of $42.54 on Thursday, the market has roughly rebounded 50 percent above where crude prices were six weeks ago, when they traded at 12-year lows before OPEC and other major oil producers announced a plan to freeze output at January levels. The currency's strongest level of the session was C$1.3024, while its weakest level was C$1.3138.
AUD/USD is supported around 0.7548 levels and currently trading at 0.7618 levels. It hit session high at 0.7642 and made session lows at 0.7583 levels. The Australian dollar rose against US dollar on Tuesday after RBA sounded optimism about Australia's economy and its financial system. The Australian dollar jumped to $0.7620, it recovered from yesterday losses, to hit high at 0.7635 levels touched last week. A rising Aussie, however, is not welcome news for the RBA as the end of a mining boom means economic growth is coming from other areas more reliant on a lower currency such as tourism and education. The Aussie has jumped 6 percent this month largely due to changes in monetary policy expectations in the United States and Australia. If sustained, it would be the largest monthly rise since 2011. Support was found at $0.7552.
Equities Recap
European shares fell slightly on Tuesday as losses among travel and leisure stocks after the deadly attacks in Brussels were partly offset by gains in technology and autos.
Britain's blue-chip FTSE 100 index closed up by 0.13 percent, France's benchmark CAC-40 index closed down by 0.02 percent, Germany's DAX ended up 0.26 percent, meanwhile the pan-European Eurofirst 300 index was down by 0.24 percent.
Wall Street closed slightly lower on Tuesday, bouncing back from an initial selloff that followed deadly attacks in Brussels, as declines in consumer and telecom stocks were more than offset by a jump in shares in the healthcare sector.
Dow Jones closed down by 0.12 percent, S&P 500 ended up by 0.0.8 percent, Nasdaq finished the day up by 0.27 percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday after Chicago Federal Reserve President Charles Evans struck a bullish tone on the U.S. economy, and as new corporate debt sales weighed on the market.
Benchmark 10-year notes fell 4/32 in price to yield 1.94 percent, up from 1.92 percent on Monday.
Commodities Recap
Gold rose on Tuesday as investors sought assets seen as havens from risk after deadly bomb attacks hit Brussels airport and a rush-hour Metro train in the Belgian capital.
Spot gold rallied more than 1 percent to a high of $1,259.60 an ounce, before paring some of those gains.
At 4:08 p.m. EDT (2008 GMT), it was 0.3 percent higher at $1,248 an ounce.
U.S. gold futures for April delivery settled up $4.40 an ounce at $1,248.60.
U.S. crude retreated from the year's high as oil prices settled steady to a shade firmer on Tuesday after deadly blasts in Brussels, taking their lead from a Wall Street rebound ahead of oil inventory data.
Brent crude settled up 25 cents at $41.79 a barrel, rebounding from a session low of $40.97.
U.S. crude finished down 7 cents at $41.45, after falling as low as $40.77 earlier.
