Market Roundup
- 'Brexit in peril' as PM May faces heavy defeat
- Brexit fallout on UK finance intensifies - think tank
- EU Prepares To Demand Increase On Divorce Payment From UK For Brexit Delay - The Telegraph
- Powell: Fed not in 'any hurry' to change rates amid global risks -tv
- China says working with U.S. day and night to get trade deal
- China's Feb producer inflation flat amid lacklustre demand, consumer inflation eases
- China c.bank pledges more policy support as bank lending slides
- In budget, Trump to ask Congress for $8.6 billion for border wall
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Jan Industrial Output MM, 0.5% f'cast, -0.4% prev
- (0200 ET/0700 GMT) Germany Jan Trade Balance, EUR, SA, 19.4 bln prev
Key Events Ahead
- N/A ECB board member Benoit Cœure participates in Eurogroup meeting in Brussels
- N/A Euro zone finance ministers to meet in Brussels.
- (0800 ET/1300 GMT) BoE's Monetary Policy Committee member Jonathan Haskel delivers a speech in London
- (1800 ET/2300 GMT) Fed's Powell makes videotaped welcoming remarks at the National Community Reinvestment Coalition's Just Economy Conference in Washington
FX Beat
DXY: The dollar index declined after Federal Reserve Chairman Jerome Powell stated that the U.S. central bank will not rush to change the level of interest rates again as it scrutinizes the effects of slowing global economy on domestic conditions in the United States. The greenback against a basket of currencies traded 0.05 percent down at 97.35, having touched a high of 97.71 on Thursday, its highest since December. FxWirePro's Hourly Dollar Strength Index stood at -4.78 (Neutral) by 0400 GMT.
EUR/USD: The euro steadied, as investors scaled back expectations for a hike in euro zone interest rates to late-2020 from mid-2020. Markets now eye European Union finance ministers meeting due today, where they will discuss how to spend a euro zone budget they seek to create in the future, with focus on support for structural reforms and investment. The European currency traded 0.05 percent up at 1.1233, having touched a low of 1.1176 on Thursday, its lowest since June 2017. FxWirePro's Hourly Euro Strength Index stood at -31.24 (Neutral) by 0400 GMT. Investors’ attention will remain on German industrial production and trade balance, ahead of the U.S. retail sales and business inventories. Immediate resistance is located at 1.1269 (38.2% retracement of 1.1176 and 1.1496), a break above targets 1.1285 (50.0% retracement). On the downside, support is seen at 1.1200, a break below could drag it till 1.1176 (March 7 Low).
USD/JPY: The dollar slumped, extending losses in the fourth straight session after data released on Friday showed U.S. employment growth almost stalled in February, with the economy creating only 20,000 jobs, adding to signs of a sharp slowdown in economic activity in the first quarter. The major was trading 0.1 percent down at 111.08, having hit a low of 110.74 on Friday, its lowest since February 28. FxWirePro's Hourly Yen Strength Index stood at 66.52 (Bullish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. retail sales and business inventories. Immediate resistance is located at 111.49 (Feb. 28 High), a break above targets 112.13 (Mar. 5 High). On the downside, support is seen at 110.66 (Feb.28 Low), a break below could take it lower at 110.35 (Feb.27 Low).
GBP/USD: Sterling plunged to a near 4-week low, as the selling pressure intensified around the British pound after British foreign minister Jeremy Hunt said Brexit could be reversed if lawmakers reject the government's exit deal. The major traded 0.3 percent down at 1.2976, having hit a low of 1.2960; it’s lowest since Feb.19. FxWirePro's Hourly Sterling Strength Index stood at -91.07 (Slightly Bearish) 0400 GMT. Investors’ attention will remain on UK consumer inflation expectations, BoE Haskel's speech and developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3051 (21-DMA), a break above could take it near 1.3109 (Feb. 20 High). On the downside, support is seen at 1.2924 (Feb. 5 Low), a break below targets 1.2832 (Feb. 12 Low). Against the euro, the pound was trading 0.3 percent down at 86.55 pence, having hit a low of 86.62 earlier, it’s lowest since Feb 26.
AUD/USD: The Australian dollar eased as investors speculate interest rates will have to be cut in Australia amid sluggish economic growth, low inflation and a slowdown in its biggest export market, China. The Aussie trades 0.05 percent down at 0.7040, having hit a low of 0.7003 on Friday, it’s lowest since Jan. 4. FxWirePro's Hourly Aussie Strength Index stood at 81.60 (Slightly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6993 (Jan.4 Low), a break below targets 0.6965. On the upside, resistance is located at 0.7092 (Mar. 6 High), a break above could take it near 0.7150 (Feb. 22 High).
NZD/USD: The New Zealand dollar edged lower, as investors priced in the chance of RBNZ policy easing despite recent stronger-than-expected economic data. The Kiwi trades 0.05 percent down at 0.6800, having touched a low of 0.6744 on Thursday, its lowest level Feb. 13. FxWirePro's Hourly Kiwi Strength Index was at 41.59 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6853 (Feb. 22 High, a break above could take it near 0.6901 (Feb. 27 High). On the downside, support is seen at 0.6757 (Feb. 22 Low), a break below could drag it below 0.6706 (Feb. 22 Low)
Equities Recap
Asian shares consolidated, as U.S. employment data raised doubts about the strength of the global economy.
MSCI's broadest index of Asia-Pacific shares outside Japan traded near 3-week lows.
Tokyo's Nikkei gained 0.4 percent to 21,100.79 points, Australia's S&P/ASX 200 index eased 0.4 percent to 6,180.20 points and South Korea's KOSPI rose 0.05 percent to 2,138.27 points.
Shanghai composite index surged 0.8 percent to 2,993.16 points, while CSI300 index traded 1.2 percent up at 3,720.20 points.
Hong Kong’s Hang Seng traded 0.5 percent higher at 28,379.99 points. Taiwan shares added 0.1 percent to 10,250.28 points.
Commodities Recap
Crude oil prices rose, boosted by a report showing a decline U.S. drilling activity and on comments from Saudi oil minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June. International benchmark Brent crude was trading 0.6 percent up at $66.02 per barrel by 0428 GMT, having hit a low of $63.99 on Friday, its lowest since Feb. 14. U.S. West Texas Intermediate was trading 0.7 percent higher at $56.33 a barrel, after falling as low as $54.50 on Friday, its lowest since the February 15.
Gold prices eased, after rising about 1 percent in the previous session on mounting global growth concerns. Spot gold was trading 0.1 percent down at $1,297.23 per ounce by 0439 GMT, having touched a high of $1,300.63 on Friday, its highest since March 1. U.S. gold futures were also down 0.1 percent at $1,298.10 an ounce.
Treasuries Recap
The 10-year U.S. Treasuries yield hit a two-month low of 2.607 percent and last stood at 2.638 percent, while the 2-year yield also hit a two-month low of 2.438 percent.
The Australian 3-year bond yields have fallen steadily to stand at 1.599 percent,while the 10-year contract hit its highest since October 2016 at 98.0300, implying a yield of 1.97 percent.
The yields on two-year paper are actually below the 1.75 percent cash rate at 1.655 percent.
