Market Roundup
- Trump plans to offer Canada, Mexico 30-day tariff exemption -official
- China warns of "necessary response" in event of trade war with U.S.
- U.S. trade deficit races to more than nine-year high
- China Feb Trade Balance (USD), 33.74 bln, 0.60 bln f'cast, 20.34 bln last 20.35 bln rvsd
- China Feb Imports y/y, 6.3%, 9.7% f'cast, 36.9% last
- China Feb Exports y/y, 44.5%%, 13.6% f'cast, 11.1% last
- Taking a baby step at best, ECB to inch towards the exit
- Japan Q4 GDP +0.4% q/q, +1.6% AR, +0.2%/+0.9% eyed, prelim +0.1%/+0.7%
- Japan Jan Current Account NSA (JPY), 607.4 bln, 310.0 bln f'cast, 797.2 bln last
- Japan punishes seven cryptocurrency exchanges over lapses
- S.Korea envoys to meet security adviser McMaster during U.S. trip
- EU snubs Britain's post-Brexit trade demands, offers banks no special deal
- Berlusconi backs Italy's League as right looks to coalition bid
- Australia Jan Trade Balance (A$), 1.055 mln, 300 mln f'cast, -1.358 mln last -1.146 mln rvsd
- New Zealand Q4 Manufacturing sales, 1.0% vs 0.3% last
Economic Data Ahead
- (0145 ET/0645 GMT) Switzerland Feb Unemployment Rate Adj, 3.0% eyed, 3.0% prev
- (0200 ET/0700 GMT) Germany Jan Industrial orders m/m, 1.6% eyed, 3.8% prev
- (0200 ET/0700 GMT) Norway Jan Manufacturing output m/m, 0.7% eyed, 1.3% prev
Key Events Ahead
- (0515 ET/1015 GMT) Ireland E1.0/E1.0 bln for 4/10 month auction
- (0745 ET/1245 GMT) ECB interest rate announcement
- (0830 ET/1330 GMT) ECB President Draghi's press conference
- N/A Bank of Japan monetary policy meeting (to Mar. 9)
FX Beat
DXY: The dollar index steadied as investors awaited more details on U.S. President Donald Trump's proposed steel and aluminium tariffs. The greenback against a basket of currencies traded flat at 89.60, having touched a low of 89.41 the day before, its lowest since Feb. 20. FxWirePro's Hourly Dollar Strength Index stood at -29.84 (Neutral) by 0500 GMT.
EUR/USD: The euro eased after rising for five straight sessions, ahead of a European Central Bank meeting later in the day, that is expected to leave policy rates unchanged for now, but may provide clues to the future. The European currency traded 0.05 percent down at 1.2406, having touched a high of 1.2445 on Wednesday, its highest since Feb. 16. FxWirePro's Hourly Euro Strength Index stood at 74.12 (Bullish) by 0400 GMT. Investors’ attention will remain on the ECB interest rate decision, ahead of U.S. unemployment benefit claims. Immediate resistance is located at 1.2465 (Feb 14 High), a break above targets 1.2510 (Feb 15 High). On the downside, support is seen at 1.2347 (5-DMA), a break below could drag it lower 1.2310 (10-DMA).
USD/JPY: The dollar declined, extending losses for a third straight session, amid fears of a potential global trade war if U.S. President Donald Trump pressed the proposals for tariffs on all imports of steel and aluminium. The major was trading 0.05 percent down at 106.02, having hit a low of 105.25 on Friday, its lowest since Nov. 2016. FxWirePro's Hourly Yen Strength Index stood at -119.64 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. unemployment benefit claims. Immediate resistance is located at 106.48 (10-DMA), a break above targets 107.10 (21-DMA). On the downside, support is seen at 105.35 (Mar. 5 Low), a break below could take it lower 104.90.
GBP/USD: Sterling rallied for the sixth consecutive session, as more hawkish signals from the Bank of England about rate rises this year supported the British pound. The major traded 0.1 percent up at 1.3902, having hit a high of 1.3929 on Tuesday, it’s highest since Feb 27. FxWirePro's Hourly Sterling Strength Index stood at 46.08 (Neutral) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3929 (Mar. 6 High), a break above could take it near 1.3996 (Feb 27 Low). On the downside, support is seen at 1.3841 (5-DMA), a break below targets 1.3766 (Mar. 5 Low). Against the euro, the pound was trading 0.05 percent down at 89.23 pence, having hit a low of 89.67 pence on Wednesday, it’s lowest since Nov. 28, 2017.
AUD/USD: The Australian dollar consolidated within a narrow range as investors awaited details of proposed U.S. tariffs which have rekindled fears of a global trade war. The Aussie trades 0.05 percent up at 0.7825, having hit a low of 0.7842 on Tuesday; it’s highest since Feb. 27. FxWirePro's Hourly Aussie Strength Index stood at 79.00 (Slightly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7801 (10-DMA), a break below targets 0.7756 (Mar 6 Low). On the upside, resistance is located at 0.7842 (Mar 6 High), a break above could take it near 0.7868 (Feb 27 High).
NZD/USD: The New Zealand dollar slightly edged up as the greenback eased after the resignation of a top White House economic adviser, Gary Cohn, who had been an advocate for free trade. The Kiwi trades 0.1 percent up at 0.7289, having touched a high of 0.7310 on Tuesday, its highest level since Feb. 26. FxWirePro's Hourly Kiwi Strength Index was at 77.03 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7310 (Mar 6 High), a break above could take it near 0.7344 (Feb 23 High). On the downside, support is seen at 0.7257 (5-DMA), a break below could drag it below 0.7200.
Equities Recap
Asian shares rebounded as fears about a global trade war eased, while the greenback steadied after a White House official said that Trump plans to offer Canada and Mexico a 30-day exemption from planned tariffs on steel and aluminium imports.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9 percent.
Tokyo's Nikkei rallied 0.4 percent to 21,332.14 points, Australia's S&P/ASX 200 index surged 0.7 percent to 5,942.90 points and South Korea's KOSPI gained 0.5 percent to 2,415.68 points.
Shanghai composite index rose 0.2 percent to 3,277.59 points, while CSI300 index was trading 0.6 percent up at 4,058.93 points.
Hong Kong’s Hang Seng was trading 1.3 percent higher at 30,567.71 points. Taiwan shares added 0.7 percent to 10,823.24 points.
Commodities Recap
Crude oil prices declined, extending previous session losses on the back of record U.S. crude production and rising inventories. International benchmark Brent crude was trading 0.1 percent down at $64.44 per barrel by 0446 GMT, having hit a low of $63.21 on Thursday, its lowest since Feb. 15. U.S. West Texas Intermediate was trading 0.1 percent down at $61.24 a barrel, after rising as low as $60.17 on Friday, its weakest since Feb. 15.
Gold prices steadied as investors awaited more details on U.S. President Donald Trump's proposed steel and aluminium tariffs and the outcome of the European Central Bank's policy meeting. Spot gold rose 0.2 percent to $1,327.37 per ounce by 0448 GMT, having hit $1,340.35 an ounce on Wednesday, its highest since Feb. 26. U.S. gold futures were mostly unchanged at $1,3220.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.877 percent lower by 0.006 bps, while 5-year yield was 0.011 bps down at 2.638 percent.
The Japanese government bond prices slipped as a recovery in domestic shares curbed investor demand for safe-haven debt. The five-year JGB yield rose half a basis point to minus 0.115 percent, and the benchmark 10-year yield also climbed half a basis point to 0.050 percent. The 30-year yield was 1 basis point higher at 0.750 percent.
The Australian government bond futures eased, with the three-year bond contract down 1.5 ticks at 97.885. The 10-year contract slipped 2.5 ticks to 97.195.
