Market Roundup
• May seeks Brexit delay after third vote on her deal is derailed
• Trump says trade talks with China going 'very well'
• Trump gets a U.S. Supreme Court victory on immigration detention
• US Jan Factory Orders MM, 0.1%, 0.3% forecast,, 0.1% previous
• US Jan Durables Ex-Transpt R MM, -0.2%, -0.1% previous
• US Jan Nondef Cap Ex-Air R MM, 0.8%, 0.8% previous
• US Jan Durable Goods, R MM, 0.3%, 0.4% previous
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Q4 Current Account/GDP, -3.9% forecast, -3.6% previous
• 21:45 New Zealand Q4 Current Account- Annual(NZD), -11.300 bln forecast,, -10.539 bln previous
• 23:00 Japan Mar Reuters Tankan DI, 13 previous
Looking Ahead - Events, Other Releases (GMT)
• N/A OMFIF-World Trade Organization seminar in London
• 18:00 U.S. Federal Reserve's FOMC announces its decision on interest rates followed by statement in Washington
• 18:30 U.S. Federal Reserve chairperson holds a news conference
Currency Summaries
EUR/USD: The euro strengthened against dollar on Tuesday, as traders pared greenback holdings before the Federal Reserve’s highly anticipated interest rate decision. Markets will scrutinise the Fed's two-day policy meeting, which starts Tuesday, for its sense of how the economy is holding up amid a U.S.-China trade conflict and global financial market volatility. The euro was up 0.16 percent at $1.1354. An index that tracks the dollar versus a basket of six major currencies was down 0.15 at 96.38. Immediate resistance can be seen at 1.1358 (23.6% retracement level), an upside break can trigger rise towards 1.1400 (Psychological levels).On the downside, immediate support is seen at 1.1337 (Daily low), a break below could take the pair towards 1.1323 (38.2% retracement level).
GBP/USD: The pound reversed earlier gains against greenback on Tuesday, as concerns that Prime Minister Theresa May's request for postponing Brexit was running into complications with the European Union weighed on pound. May is asking the EU to delay Brexit by at least three months after her plans for another vote on her twice-defeated divorce deal were thrown into crisis. The British currency was up 0.15 percent on the day at 1.3237. Immediate resistance can be seen at 1.3305 (38.2% retracement level), an upside break can trigger rise towards 1.3388 (23.6% retracement level).On the downside, immediate support is seen at 1.3240 (50% retracement level), a break below could take the pair towards 1.3174 (61.8% retracement level).
USD/CAD: The Canadian dollar edged higher against the greenback on Tuesday, as higher oil prices and weaker dollar supported Canadian . Oil prices were largely steady around four-month highs on Tuesday on expectations that OPEC would continue production cuts till the end of the year, and ahead of weekly U.S. data that was forecast to show a build in crude stocks. Oil prices have rallied more than 20 percent after the Organization of the Petroleum Exporting Countries and its allies began to curb supplies since the start of the year. At (2128 GMT), the Canadian dollar was trading 0.01 percent higher at 1.3316 to the greenback.Immediate resistance can be seen at 1.3328 (38.2% retracement level), an upside break can trigger rise towards 1.3392 (50% retracement level).On the downside, immediate support is seen at 1.3240 (23.6% retracement level), a break below could take the pair towards 1.3200 (Psychological level).
USD/JPY: The dollar edged lower against the Japanese yen on Tuesday, as concern over the U.S. economy and expectations that the Federal Reserve will prove accommodative at a meeting this week weighed on greenback. Markets expect the Fed to strike a dovish tone when it meets, and bets on an interest rate cut have increased after weaker-than-expected manufacturing data on Friday. The foreign exchange market has traded in a narrow range this week as caution prevails among investors ahead of the Fed meeting but the Japanese yen, Monday's worst performing major currency, has recovered. The dollar was 0.04 lower versus the Japanese yen at 111.39. Strong resistance can be seen at 111.52 (23.6% retracement level), an upside break can trigger rise towards 111.95 (March 15th high).On the downside, immediate support is seen at 111.30 (38.2% retracement level), a break below could take the pair towards 111.11 (50% retracement level).
Equities Recap
European shares were on course for a fifth day of gains on Tuesday, powered by a strong rally in automakers after Peugeot suggested Fiat Chrysler was among the options for a merger, and as Bank of America Merrill Lynch talked up stocks in the sector.
UK's benchmark FTSE 100 closed up by 0.43 percent, the pan-European FTSEurofirst 300 ended the day up by 0.58 percent, Germany's Dax ended up by 1.15 percent, France’s CAC finished the day down by 0.25 percent.
The benchmark S&P 500 stock index ended little changed on Tuesday as investor optimism regarding the Federal Reserve's expected affirmation of its dovish policy stance was offset by reports of fault lines emerging in U.S.-China trade negotiations.
Dow Jones closed up by 0.05 percent, S&P 500 ended up 0.02 percent, Nasdaq finished the day up by 0.16 percent.
Treasuries Recap
U.S. Treasury yields were modestly higher in afternoon trade on Tuesday, as investors await insight on the Federal Reserve's policy path when the U.S. central bank ends its two-day meeting on Wednesday, amid broad expectations that it will hold rates steady.
The 10-year Treasury yield was last at 2.616 percent, 1.5 basis points higher from its last close. The 2-year Treasury yield, which is a proxy for investor expectations of interest-rate hikes, was up 1.9 basis points, at 2.475 percent. At the other end of the maturity range, the 30-year yield was up 1.5 basis points. at 3.025 percent.
Commodities Recap
Gold prices rose for a third consecutive session on Tuesday as the dollar weakened on expectations that the U.S. Federal Reserve will maintain a dovish tone at its monetary policy meeting this week.
Gold rose 0.3 percent to $1,306.76 per ounce, firming above the psychologically important $1,300 level as the dollar slipped. U.S. gold futures rose 0.4 percent to $1,306.5 per ounce.
Oil prices held close to four-month highs on Tuesday on expectations that OPEC would continue production cuts through the end of the year and ahead of official weekly U.S. crude inventory data.
Brent crude oil futures settled 7 cents higher at $67.61 a barrel, the global benchmark's highest settlement since November 2018.
U.S. West Texas Intermediate (WTI) futures touched its highest since November at $59.57 a barrel but finished at $59.03 a barrel, falling 6 cents.
