Market Roundup
- RBNZ cuts OCR 25bps to 2.25 pct, signals further cut if inflation shifts below 2%.
- U.S. Jan wholesale inventories rise 0.3%, seen hurting growth in 2016; sales declined 1.3%.
- Bank of Canada holds rates, sees stronger world growth in '16/17.
- Wall Street gets boost from crude oil recovery, Brent crude up above $40 per barrel.
- Atlanta Fed holds U.S. Q1 GDP view at 2.2 percent after wholesale inventory data.
- U.S. bond yields rise further after weak 10-yr auction.
- EIA data sees crude inventories rise, gasoline stocks fall 4,5MN bbls vs forecast of -1.4MN bbls.
- Brazil's Barbosa: Brazil political crisis will not hamper economic reforms.
Looking Ahead - Economic Data (GMT)
- 23:50 Japan- Japan Buying Foreign Bonds Mar 4 JPY 933.8b-previous
- 23:50 Japan- Japan Buying Foreign Stocks Mar 4 JPY 382.3b-previous
- 00:00 Australia Consumer Inflation Expectation Mar 3.6%-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 1.1035 and hit lows at 1.0946 levels. Euro surged higher against US dollar on Wednesday in the New York session as euro continued its yesterday's bullish momentum as investors awaited European Central Bank meeting, which they expect will result in interest rates falling deeper into negative territory. The ECB is expected to cut the deposit rate by 10 basis points to -0.40 percent, announce more asset purchases and possibly introduce tiered interest rates like the Bank of Japan in a bid to boost inflation. The euro edged up 0.2 percent against US dollar at $1.1028, erasing an earlier 0.6 percent fall against the greenback.
GBP/USD is supported in the range of 1.4167 and currently trading at 1.4219 levels. It reached session high at 1.4234 and hit low at 1.4184 levels. The Sterling inched higher against US dollar on Wednesday, after UK industrial output data printed better than expected figures Sterling initially in the European session dipped towards 1.4189 levels, however after the data release it recovered all the lost ground hitting as high as 1.4238 before pausing around 1.4220 in the late American hours. The pound, which fell to a 7-year low after the announcement of a date for the referendum last month, has since then recovered around 3 percent. It traded at 77.43 pence per euro, within sight of one-month highs against the common currency hit last week, and rose 0.1 percent to $1.4228.
USD/CAD is supported at 1.3200 levels and is trading at 1.3249 levels. It has made session high at 1.3429 and lows at 1.3224 levels. The Canadian dollar rallied against its U.S. counterpart on Wednesday, buoyed by steady oil prices and the Bank of Canada held its policy interest rate steady at 0.50 percent on Wednesday. The U.S. Energy Information Administration said crude stockpiles rose 3.9 million barrels last week to reach nearly 522 million barrels, in its fourth week of building to record highs. Oil has gained about 50 percent from 12-year lows hit less than two months ago, since OPEC members Saudi Arabia, Qatar and Venezuela, along with non-OPEC exporter Russia, pledged to leave supply at January's levels if others cooperated. The currency's weakest level was C$1.3447, while it touched its strongest level at C$1.3230.
NZD/USD is supported around 0.6600 levels and currently trading at 0.6646 levels. It hit session high at 0.6807 and made session lows at 0.6640 levels. The New Zealand dollar plunged over 1 U.S. cent against US dollar on Wednesday as the Reserve Bank of New Zealand surprised the market by cutting the cash rate to a record low 2.25 percent and left the door open for more easing. The New Zealand dollar slid as low as $0.6640, from around $0.6807 after the rate decision. The Reserve Bank of New Zealand signaled more cuts may be needed following deterioration in the global economic growth.
Equities Recap
European stocks closed higher on Wednesday, supported by strong surge in crude-oil prices lifted world stocks ahead of the European Central Bank's highly anticipated policy decision Thursday.
Britain's blue-chip FTSE 100 index closed up by 0.49 percent, France's benchmark CAC-40 index closed up by 0.49 percent, Germany's DAX ended up 0.37 percent, meanwhile the pan-European Eurofirst 300 index was up by 0.51 percent.
U.S. stocks rose in low volume on Wednesday, led once more by the direction of the price of oil and energy shares.
Dow Jones closed up by 0.19 percent, S&P 500 ended up by 0.49 percent, Nasdaq finished the day up by 0.54 percent.
Treasuries Recap
U.S. Treasury yields rose on Wednesday as some investors bet the recent decline in yields due to global growth concerns was overdone and after a disappointing debt auction by the Treasury Department.
The benchmark 10-year note was last down 17/32 in price to yield 1.891 percent, up from 1.834 percent late on Tuesday.
The 30-year bond was last down 29/32 in price to yield 2.682 percent, up from 2.639 percent late on Tuesday.
Commodities Recap
Gold fell on Wednesday as oil prices and world stock markets rose, and expectations for further monetary easing from the European Central Bank prompted some investors to take profits after the metal's rally to 13-month highs last week.
Spot gold was at $1,252.68 an ounce at 2:36 p.m. EST (1936 GMT), down 0.6 percent, while U.S. gold futures for April delivery settled down 0.4 percent at $1,257.40 an ounce.
Oil prices resumed a month-long rally on Wednesday, helping to lift world stock markets, while bond prices weakened ahead of this week's European Central Bank meeting.
Brent rose $1.42 to settle at $41.07 a barrel, while U.S. crude rose $1.79 to settle at $38.29.
