Market Roundup
• U.S. Feb Manuf Output MM, 1.2%, 0.5% forecast, 0.0% previous.
• U.S. Feb Industrial Production MM, 1.1%, 0.3% forecast, -0.1% previous.
• U.S. Feb Capacity Utilization MM, 78.1%, 77.7% forecast, 77.5% previous.
• U.S. Feb Housing Starts Number MM, 1.236 mln, 1.290 mln forecast, 1.326 mln previous.
• U.S. Feb House Starts MM: Change, -7.0%, 9.7% previous.
• U.S. Feb Building Permits: Number, 1.298 mln, 1.320 mln forecast, 1.377 mln previous.
• U.S. Jan JOLTS Job Openings, 6.312 mln, 5.890 mln forecast, 5.811 mln previous.
• U.S. Mar U Mich Sentiment Prelim, 102.0, 99.3 forecast, 99.7 previous.
• Fight over U.S. spending bill rekindles immigration debate.
• European powers propose new Iran sanctions to meet Trump ultimatum.
• Seoul aims for more talks about talks with N.Korea this month.
• Euro zone inflation slows more than expected in Feb on cheaper food.
• In Paris, Merkel and Macron seek common ground on euro zone reform .
• BoE says action needed to avert financial contract disruption after Brexit.
• UK might struggle to make planned spending cuts - Moody's.
• CA Jan Manufacturing Sales MM, -1.0%, -0.8% forecast, -0.3% previous.
• CA Jan Securities Cdns C$ MM, 13.25 bln, 21.99 bln previous.
• CA Jan Securities Foreign C$, 5.68 bln, -1.97 bln previous.
Looking Ahead - Economic Data (GMT)
• 18 Mar 21:50 Japan Feb Exports YY, 1.9% forecast, 12.2% previous
• 18 Mar 21:50 Japan Feb Imports YY, 17.1% forecast, 7.9% previous
• 18 Mar 21:50 Japan Feb Trade Balance Total Yen, -99.6 bln forecast, -943.4 bln previous
• 18 Mar 23:30 China Feb China House Prices YY, 5.0% p previous
• 19 Mar 19:00 New Zealand Q1 Westpac Consumer Survey, 107.4 previous
Looking Ahead - Events, Other Releases (GMT)
• 18 Mar 23:50 BOJ to release the summary of opinions from board members at its March 08-09 policy meeting – Tokyo
• 19 Mar 13:00 Fed's Raphael Bostic participates in an armchair chat, "Community Reinvestment Act," before the National Interagency Community Reinvestment Conference co-organized by the Federal Reserve Banks of Atlanta, Chicago and San Francisco - Miami
Currency Summaries
EUR/USD is likely to find support at 1.2200 levels and currently trading at 1.2287 levels. The pair has made session high at 1.2335 and hit lows at 1.2268 levels. The euro declined against the U.S. dollar on Friday as greenback was bolstered by solid U.S. economic data that further supported consensus expectations that the Federal Reserve will raise interest rates at next week's monetary policy meeting. U.S. industrial production surged in February, boosted by strong increases in output at factories and mines, while a consumer sentiment survey by the University of Michigan showed a rise in the overall index for March. Industrial production jumped 1.1 percent last month, the Federal Reserve said on Friday. That was the largest increase in four months and followed a 0.3 percent decline in January. February's increase beat economists' expectations for only a 0.3 percent gain. Earlier this week, the U.S. currency took a hit after Trump dismissed Secretary of State Rex Tillerson and investors grew increasingly nervous about the direction U.S. policy might take following a series of departures by key members of staff.The dollar index was up 0.1 percent at 90.236. It has been on the defensive for much of the week amid the shake-up inside Trump's administration and as next week's Federal Reserve policy meeting comes into focus. The euro fell 0.2 percent to $1.2284, with little in the way to drive the single currency.
GBP/USD is supported in the range of 1.3870 levels and currently trading at 1.3940 levels. It reached session high at 1.3979 and dropped to session low at 1.3886 levels. Sterling fell on Friday as the dollar rebounded across the board but it is still set for its biggest weekly rise in a month as investors became cautiously hopeful that Britain would strike a transition deal at a summit next week for its EU exit.The dollar edged higher against a basket of currencies. It is set for its fourth consecutive week of gains. While sticking points remain such as a deadlock over the Irish border issue - and recent headlines from senior officials have also highlighted remaining differences - businesses have become more optimistic that EU leaders can endorse a transition deal at a Brussels summit next Friday. On Friday sterling was up by a quarter of a percent at $1.3977. For the week, it has gained one percent, its biggest rise in a month. Sterling hit $1.4346 on Jan. 25, its highest level against the U.S. dollar since Britain voted to leave the European Union in June 2016.Though it has pulled back modestly from those highs, it remains near the top of its trading range of $1.20 to $1.43, buoyed by the hopes of an eventual Brexit transition deal and by a generally weaker U.S. currency. In other major developments next week, the Bank of England is set to announce a policy decision which may shed some light on the future path of interest rates. Markets are now pricing in about 36 basis points of rate hikes over the year.
USD/CAD is supported at 1.3000 levels and is trading at 1.3089 levels. It has made session high at 1.3096 and lows at 1.3045 levels. The Canadian dollar touched eight-month low against the greenback on Friday as the market continued to assess how quickly more interest rate hikes could come in the face of trade uncertainty with the United States. The loonie has been hit by comments earlier from the head of the Bank of Canada this week that reinforced expectations the central bank can take its time raising rates after hiking three times since last July. Markets also expect policymakers may wait for greater clarity on the future of U.S. trade policy after worries about a trade war ramped up after President Donald Trump imposed tariffs on steel and aluminum imports earlier this month. While Canada was exempted, Trump said the reprieve would be in place so long as there was progress on talks to renegotiate the North American Free Trade Agreement. On the economic front, Canadian factory sales in January fell by 1.0 percent, the biggest drop in six months, on weakness in motor vehicles, as well as aerospace products and parts. Separate data showed foreign investment in Canadian securities resumed in January after a dip in December but fell far short of the monthly purchases seen in much of the second half of 2017. The Canadian dollar was last trading down 0.3 percent at C$1.3093 to the greenback.
AUD/USD is supported around 0.7678 levels and currently trading at 0.7711 levels. It hit session high at 0.7777 and made session lows at 0.7710 levels. Australian dollar declined against US dollar on Friday as a fresh bout of risk aversion gripped market, in part due to concerns about a global trade war and rapid-fire changes in top White House staff. The Aussie dollar slipped further to $0.7712, after shedding 1 percent overnight, a major turnaround from a $0.7916 peak earlier in the week. The latest jolt to risk appetite came when the Washington Post reported President Donald Trump had decided to fire National Security Adviser H.R. McMaster. That would remove another official that markets had assumed would be a restraining influence on the president, particularly on free trade. Amid reports Trump was considering tariffs on Chinese goods, White House trade adviser, Peter Navarro, said he would be making recommendations to address China's "theft and forced transfer" of American intellectual property. Industrial production jumped 1.1 percent last month, the largest increase in four months. On the data front,U.S. industrial production surged in February, boosted by strong increases in output at factories and mines, but the economic outlook for the first quarter was dimmed by a larger-than-expected plunge in homebuilding last month. Industrial production jumped 1.1 percent last month, the Federal Reserve said on Friday. That was the largest increase in four months and followed a 0.3 percent decline in January. February's increase beat economists' expectations for only a 0.3 percent gain.
Equities Recap
European shares rose on Friday, led by NEX Group as it jumped after a takeover offer, but stocks ended the week with a slight loss as worries about a trade war and geopolitical tensions kept investors on edge.
UK's benchmark FTSE 100 closed up 0.3 percent, the pan-European FTSEurofirst 300 ended the day down by 0.34 percent, Germany's Dax ended up by 0.5 percent, France’s CAC finished the day up by 0.3percent.
U.S. stocks rose on Friday boosted by strong industrial output numbers though Wall Street's three major indexes posted losses for the week.
Dow Jones closed up by 0.22 percent, S&P 500 ended up by 0.12 percent, Nasdaq finished the day down by 0.04 percent.
Treasuries Recap
Yields rose on Friday after data showed U.S. industrial production surged in February and in anticipation of next week's Federal Open Market Committee meeting, at which the U.S. central bank is expected to raise interest rates for the first time this year.
Benchmark 10-year Treasury notes fell 7/32 in price to yield 2.848 percent, up from 2.824 percent on Thursday.
Commodities Recap
Gold prices dipped on Friday and were set for their biggest weekly fall in three weeks on pressure from a stronger U.S. dollar and expectations that the U.S. Federal Reserve will raise interest rates next week for the first time this year.
Spot gold dipped 0.3 percent, trading at $1,312.36 per ounce by 1:35 p.m. EST (1735 GMT). It was on track to end the week down 0.8 percent.
U.S. gold futures for April delivery settled down $5.50, or 0.4 percent, at $1,312.30 per ounce.
Oil prices jumped on Friday, with Brent crude futures hitting their highest in more than two weeks as U.S. stock prices rose and investors covered short bets ahead of a weekend in which the U.S. news program "60 Minutes" will air an interview with Saudi Arabia's crown prince.
Brent futures rose $1.09 to settle at $66.21 a barrel, a 1.7 percent gain. During the session, Brent hit $66.42, its highest since Feb. 28.
U.S. West Texas Intermediate (WTI) crude futures for April, which will expire on Tuesday, rose $1.15 to settle at $62.34 a barrel, a 1.9 percent gain. WTI hit a high of $62.54, its highest since March 7.
