Market Roundup
• NY Fed Mfg +0.62 vs -10 forecast, -16.64 previous, new orders at highest since Sept 2014.
• U.S. retail sales dip in February, Jan revised down; retail control flat vs 0.2% forecast.
• U.S. Feb producer prices fall 0.2 pct, core flat m/m vs 0.1% forecast.
• U.S. business inventories rise (0.1%) as sales remain weak.
• The GDPNow model f/c for real GDP growth in Q1 2016 is 1.9% on March 15, -2.2% from March 9.
• NZ's Fonterra: Dairy prices fall 2.9% w/an avg selling price of NZD 2,190;/tonne, volumes drop at auction.
• US equities drift lower as focus turns to Fed meet & BOJ sees inflation expectations weakening.
• Brazil's ex-President Lula to accept cabinet post - presidency source.
Looking Ahead - Economic Data (GMT)
• No Significant Data
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1046 levels and currently trading at 1.1108 levels. The pair has made session high at 1.1120 and hit lows at 1.1077 levels. Euro gained modestly against dollar on Tuesday as the dollar eased in the wake of disappointing U.S. economic data that raised doubts over a hawkish FOMC meeting on Wednesday. U.S. retail sales fell less than expected in February, but a sharp downward revision to January's data could reignite concerns about the economy's growth prospects. Retail sales dipped 0.1 percent last month as automobile purchases fell and cheaper gasoline undercut receipts at service stations. The data could give the Federal Reserve more reason to keep interest rates unchanged on Wednesday, when it is due to release its latest policy statement.
GBP/USD is supported in the range of 1.4111 and currently trading at 1.4151 levels. It reached session high at 1.4198 and hit low at 1.4136 levels. Sterling sank against the dollar on Tuesday, after a poll suggested more supporters Britain’s leaving the European Union had overtaken those who want to remain. Investors worry that a possible Brexit would affect economic growth, push back UK rate hike expectations and freeze the huge foreign investment flows Britain needs to fund its current account deficit, one of the biggest in the developed world at about 4 percent of output. Sterling fell 1 percent to $1.4148, losing ground for the second day in a row. The euro was up 1 percent at 78.42 pence, while sterling's trade-weighted index was down 1 percent at 85.5.
USD/CAD is supported at 1.3334 levels and is trading at 1.3361 levels. It has made session high at 1.3403 and lows at 1.3332 levels. The Canadian dollar weakened against its U.S. counterpart on Tuesday, hitting a nearly one-week low as crude oil prices fell and investors braced for a policy decision from the U.S. Federal Reserve on Wednesday. Oil prices slid for a second day as concerns emerged that a six-week rally may have fizzled after OPEC doused hopes for a speedy erosion of a global overhang of unwanted crude. The Fed began its two-day meeting on Tuesday and the market was awaiting a statement from the central bank on Wednesday. The Fed is expected to leave short-term interest rates unchanged but also signal that a rate hike is not too far off as long as the job market and inflation continue to improve. The currency's strongest level of the session was C$1.3259, while it touched it’s weakest since March 9 at C$1.3400.
USD/JPY is supported around 112.60 levels and currently trading at 113.16 levels. It hit session high at 113.18 and made session lows at 112.92 levels. The dollar fell sharply against the yen on Tuesday after the Bank of Japan left interest rates unchanged and weak U.S. retail sales data made investors to search for safety as oil tumbled and equity markets globally turned lower. Six weeks after shocking markets by cutting rates into negative territory, Bank of Japan Governor Haruhiko Kuroda said the central bank would take time to look at the impact, but could move again before the cut had worked its way fully into the economy. The dollar fell by more than 1 percent against the yen following data that showed U.S. retail sales had fallen less than expected in February, but were reversed sharply downward for January. It was last down 0.6 percent to 113.12 yen.
Equities Recap
European shares retreated on Tuesday, led lower by commodity stocks, after the Bank of Japan left policy unchanged but presented a bleaker view of the country's economy.
Britain's blue-chip FTSE 100 index closed down by 0.5 percent, France's benchmark CAC-40 index closed down 0.7 percent, Germany's DAX ended down 0.5 percent, meanwhile the pan-European Eurofirst 300 index was down by 1.10 percent.
U.S. stocks ended lower on Tuesday, as the stocks were weighted down by weak commodities prices and weaker US retail sales data, ahead of U.S. Federal Reserve's two-day policy meeting.
Dow Jones closed down by 0.12 percent, S&P 500 ended down by 0.19 percent, Nasdaq finished the day down by 0.47 percent.
Treasuries Recap
U.S. Treasury debt prices gave up most gains to trade narrowly mixed on Tuesday, as investors braced for the possibility the Federal Reserve could strike a more upbeat tone on the economy and consequentially raise interest rates at a faster pace than many initially expected.
The benchmark 10-year note was flat on the day to yield 1.962 percent, compared with 1.964 percent on Monday.
The 30-year bond was last up 5/32 in price to yield 2.723 percent, down from 2.733 percent.
Commodities Recap
Oil settled 2 percent lower on Tuesday, extending losses for a second straight day, as the market yielded to technical resistance after running above $40 a barrel and worry that U.S. crude stockpiles were rising despite falling production.
Brent settled down 79 cents at $38.74 a barrel, a 2 percent drop similar to Monday's.
U.S. crude finished down 84 cents, or 2.3 percent, at $36.34. In the previous session, it fell 3 percent.
Gold fell to its lowest in almost two weeks on Tuesday ahead of a Federal Reserve statement that is expected to give clues on the pace of future U.S. rate rises.
Spot gold fell to $1,225.70 an ounce, its lowest since March 2, at one point and was down 0.4 percent at $1,230.31 by 2:37 p.m. EDT (1837 GMT).
U.S. gold futures for April delivery settled down 1.1 percent at $1,231 an ounce.
