Market Roundup
- US Feb import prices -0.3%, prices drop 6.1% y/y smallest decrease since '14 export prices -0.4%.
- Canada loses 2,300 jobs in Feb, unemployment climbs to 7.3% near 3-yr high.
- ECB defends "Super Mario" after investor backlash, some acknowledge communication mishap.
- Finnish ECB's Liikanen: ECB will act until inflation target is met, will keep rates at current/lower level for long time.
- Dollar turns negative as investors turn to higher-yielding currencies, Stocks and commodities prices rise.
- US oil drillers cut rigs for 12th week in a row -Baker Hughes.
- London Mayor Johnson says sterling would flourish if Britain leaves EU.
- Mexico industrial output jumps to 3-yr high on construction.
- Brazil's Rousseff: not resigning in political crisis, ex-President Lula arrest warrant has no legal basis.
- USD/ARS +3.2% as investors snap up central bank securities, USD/ARS closed 14.83 strongest level since mid-Feb.
- Betting on central banks, investors buy junk debt and EM assets; EM sees first rise in 5-months.
Looking Ahead - Economic Data (GMT)
- Sun 05:30 China Urban investment (ytd)yy* Jan forecast 9.5%,10%-previous
- Sun 05:30 CN Industrial Output YY*Jan forecast 5.6%, 5.9%- previous
- Sun 05:30 CN Retail Sales YY*Jan forecast 10.8%, 11.1%- previous
- 23:50 Japan Machinery Orders MM* Jan forecast 3%, 4.2%- previous
- 23:50 Japan Machinery Orders YY*Jan forecast -3.6%, -3.6%- previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1077 levels and currently trading at 1.1149 levels. The pair has made session high at 1.1220 and hit lows at 1.1077 levels. Euro inched higher against US dollar on Friday as Euro continued its yesterday's bullish run. Euro initially slipped against dollar in the early European session, however after finding support at 1.1077 the single currency bounced back towards 1.1151 levels. The euro regained gained ground against the dollar after ECB Governing Council member Erkki Liikanen said the central bank had not run out of options to boost the economy and would continue to support it until it reaches its inflation target of almost 2 percent. The euro turned positive in morning U.S. trading after Liikanen's comments, reversing a more than 1 percent fall in morning trade in Europe. It was last up 0.1 percent at $1.1185 against the dollar.
GBP/USD is supported in the range of 1.4247 currently trading at 1.4384 levels. It reached session high at 1.4433 and hit low at 1.4274 levels. . The pound edged higher against US dollar in US session by punching higher from 1.4274 to hit high at 1.4437 levels in the mid-morning American hours as the currency pair found support at 1.4247. The sterling rose to its highest in nearly three weeks as the pair found support from improved risk appetite after the ECB's latest easing measures. The pound tends to move in sync with riskier assets given relatively higher interest rates in the UK amongst developed countries. The BoE's monetary policy committee meets next week and the minutes of the meeting will be released on March 17. This week, Governor Mark Carney very cautiously pointed to what he saw as the economic risks of Britain leaving the EU. British voters will decide in a referendum on June 23 whether the country stays in the EU or exit from European Union.
USD/CAD is supported at 1.3164 levels and is trading at 1.3229 levels. It has made session high at 1.3300 and lows at 1.3164 levels. The Canadian dollar firmed against its US dollar on Friday, hitting a four-month high as oil prices rose and broader risk appetite improved, allowing the currency to shrug off data which Canadian job losses increased for the second month in a row. The economy unexpectedly shed 2,300 jobs last month, pushing the unemployment rate to a nearly three-year high due mainly to a loss of full-time positions, data from Statistics Canada showed. Meanwhile, oil prices rose after an optimistic report from the International Energy Agency that said the crude market may have reached its bottom. U.S. crude prices were up 2.72 percent to $38.87 a barrel. The currency's weakest level was C$1.3350, while it touched its strongest since Nov. 6 at C$1.3216.
AUD/USD is supported around 0.7500 levels and currently trading at 0.7564 levels. It hit session high at 0.7580 and made session lows at 0.7501 levels. The Australian dollar stood tall against the dollar on Friday as investors bought riskier assets and commodity related currencies following surprising announcements from the European Central Bank and People's Bank of China. Commodities rose on Friday after China fixed higher its onshore yuan rate against the dollar by the fastest pace this year to 6.4850 Yuan. The move by the central banks sparked a risk-on mood for investors that helped commodity-based currencies again strongly against the US dollar. The Australian dollar had a milder by trading at $0.7470 against its U.S. counterpart, in the European session, however after US session the pair reach of an eight-month high of $0.7585.
Equities Recap
European shares bounced back on Friday, with the European Central Bank's new cheap funding plan supporting lenders in the euro zone periphery and a recovery in metal and oil prices boosting stocks in commodity companies.
Britain's blue-chip FTSE 100 index closed up by 1.68 percent, France's benchmark CAC-40 index closed up by 3.16 percent, Germany's DAX ended up 3.47 percent, meanwhile the pan-European Eurofirst 300 index was up by 2.78 percent
Wall street rallied on Friday to their best close of 2016 as investors embraced the European Central Bank's stimulus measures and steadying oil prices drove up energy shares.
Dow Jones closed up by 1.27 percent, S&P 500 ended up by 1.63 percent, Nasdaq finished the day up by 1.83 percent.
Treasuries Recap
U.S. Treasury yields rose in choppy trading on Friday as investors bet the U.S. economy is strong enough for the Federal Reserve to raise interest rates this year and after the European Central Bank president said he did not anticipate more rate cuts.
Yields on the two-year and three-year Treasury notes climbed to their highest in six weeks, with the two-year touching 0.964 percent and the 3-year yield reaching 1.159 percent.
Five- and 7-year note yields rose to their highest since the end of January.
The benchmark 10-year note yield rose to 1.970 percent, its highest in six weeks. It was last down 10/32 in price to yield 1.963 percent, up from 1.929 on Thursday.
The 30-year bond was last down 13/32 in price to yield 2.721 percent, up from 2.70 percent
Commodities Recap
Oil prices rose on Friday, boosting world stock markets, after an energy organization said the oil market may have found a floor.
Brent rose 34 cents, or 0.9 percent, to settle at $40.39 a barrel, while U.S. crude gained 66 cents, or 1.7 percent, to settle at $38.50.
Gold fell 1 percent on Friday, as the dollar rebounded and oil and world stock markets rose, after bullion extended the prior session's gains to a 13-month high touched in early trade after the European Central Bank's announcement of additional easing.
Spot gold rose as far as $1,282.51 an ounce, its strongest since Feb. 3, 2015, before falling 1 percent to $1,259.01 by 2:27 p.m. EST (1927 GMT), as the dollar rebounded from a three-week low versus the euro.
U.S. gold for April delivery settled down 1.1 percent at $1,259.40 an ounce, after peaking at $1,287.80.
