Market Roundup
- U.S. and China said to appear close to deal to roll back tariffs
- U.S. House panel launches probe into possible obstruction by Trump
- BOJ will debate exit plan for easy policy at appropriate time - Kuroda
- British PM May promises 1.6 bln pound fund for Brexit-backing towns
- Irish consumer sentiment plummets to 4-year low on eve of Brexit
- Australia economy hits dry spell as incomes fail to flow
- Australia job advertisements post biggest annual drop in 5 years
Economic Data Ahead
- (0430 ET/0930 GMT) UK Feb Markit/CIPS Cons PMI, 50.3 f’cast, 50.6 prev
- (0430 ET/0930 GMT) EZ Mar Sentix Index, -3.1 f’cast, -3.7 prev
- (0500 ET/1000 GMT) EZ Jan Producer Prices MM, 0.3% f’cast, -0.8% prev
- (0500 ET/1000 GMT) EZ Jan Producer Prices YY, 2.9% f’cast, 3.0% prev
Key Events Ahead
- N/A No major economic data releases
FX Beat
DXY: The dollar index eased after President Donald Trump renewed criticism of the Federal Reserve and said the U.S. central bank's tight monetary policy was contributing to a strong dollar and hurting the country's competitiveness. The greenback against a basket of currencies traded 0.05 percent down at 96.43, having touched a low of 95.82 on Thursday, its lowest since February 5. FxWirePro's Hourly Dollar Strength Index stood at 131.02 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro consolidated within narrow ranges as recent weakness in the euro zone economy continued to dent investors sentiment. The European Central Bank could signal a re-launch of its offer of long-term loans to banks, but looks certain to suggest a rate hike this year would be off the table. The European currency traded flat at 1.1363, having touched a high of 1.1419 on Thursday, its highest since Feb. 5. FxWirePro's Hourly Euro Strength Index stood at 16.08 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone sentix investor confidence and producer price index, ahead of the U.S. construction spending and New York business conditions index. Immediate resistance is located at 1.1417 (Jan. 25 High), a break above targets 1.1443 (Jan. 28 High). On the downside, support is seen at 1.1346 (21-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar surged, hovering towards 2-1/2 month peak hit in the prior session, amid hopes the United States and China are close to a deal to end a tariff row that has slowed global economic growth. The major was trading 0.1 percent up at 111.96, having hit a high of 112.07, its highest since December 20. FxWirePro's Hourly Yen Strength Index stood at -38.47 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. construction spending and New York business conditions index. Immediate resistance is located at 112.20, a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 111.18 (5-DMA), a break below could take it lower at 110.66 (Feb.28 Low).
GBP/USD: Sterling gained, halting a 2-day losing streak, amid receding fears that Britain will leave the European Union without a deal. Last week, the British pound surged to multi-month highs after Prime Minister Theresa May said lawmakers would get to vote on a delay to Brexit if they choose not to approve her withdrawal agreement. The major traded 0.2 percent up at 1.3229, having hit a high of 1.3350 on Wednesday; it’s highest since July 9. FxWirePro's Hourly Sterling Strength Index stood at -30.64 (Neutral) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3300, a break above could take it near 1.3362 (July 9 High). On the downside, support is seen at 1.3136 (Jan 28 Low), a break below targets 1.3093 (Feb. 26 Low). Against the euro, the pound was trading 0.2 percent up at 85.88 pence, having hit a high of 85.28 on Wednesday, it’s highest since May 2017
AUD/USD: The Australian dollar rallied, after falling for three straight sessions, following a report from the Wall Street Journal stating that the United States and China could reach a formal agreement at a summit around March 27 given progress in talks between both the economies. The Aussie trades 0.2 percent up at 0.7089, having hit a low of 0.7069 on Friday; it’s lowest since February 12. FxWirePro's Hourly Aussie Strength Index stood at -103.40 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7060 (Feb.8 Low), a break below targets 0.7016 (Dec.26 Low). On the upside, resistance is located at 0.7150 (Feb. 22 High), a break above could take it near 0.7206 (Feb. 21 High).
NZD/USD: The New Zealand dollar advanced on signs the United States and China were close to striking a tariff deal to end a tariff row. The Kiwi trades 0.3 percent up at 0.6811, having touched a high of 0.6903 on Tuesday, its highest level Feb. 6. FxWirePro's Hourly Kiwi Strength Index was at -87.05 (Slightly Bearish) by 0500 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 0.6941 (Feb. 1 High). On the downside, support is seen at 0.6793 (March. 1 Low), a break below could drag it below 0.6774 (Feb. 6 Low).
Equities Recap
Asian shares surged, boosted by signs the United States and China were close to sealing a tariff deal to end their protracted trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.
Tokyo's Nikkei surged 1.02 percent to 21,822.04 points, Australia's S&P/ASX 200 index advanced 0.4 percent to 6,217.40 points and South Korea's KOSPI fell 0.2 percent to 2,191.94 points.
Shanghai composite index rose 0.8 percent to 3,019.44 points, while CSI300 index traded 0.9 percent up at 3,784.72 points.
Hong Kong’s Hang Seng traded 0.6 percent higher at 28,981.66 points. Taiwan shares shed 0.4 percent to 10,349.88 points.
Commodities Recap
Crude oil prices surged, boosted by output cuts by producer cartel OPEC and reports that the United States and China are close to a deal to end a tariff row that has slowed global economic growth. International benchmark Brent crude was trading 0.8 percent up at $65.38 per barrel by 0509 GMT, having hit a low of $64.29 on Tuesday, its lowest since February 14. U.S. West Texas Intermediate was trading 0.6 percent higher at $56.06 a barrel, after falling as low as $55.00 on Tuesday, its lowest since the February 15.
Gold prices steadied after declining below the critical $1,300 level in the previous session, as the greenback eased on the prospect of a trade deal between China and the United States. Spot gold rose 0.3 percent at $1,296.09 per ounce as of 0514 GMT, having touched a low of $1,290.09 in the previous session, its lowest since January 25. U.S. gold futures were down 0.2 percent at $1,297.10 an ounce.
Treasuries Recap
The Japanese government bonds remained mixed towards the close of Asian session on the first trading day of the week Monday as investors await the country’s 10-year and 30-year auctions, scheduled to be held on March 5 and 7 at 03:35GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained flat at -0.001 percent, the yield on the long-term 30-year fell 2 basis points to 0.641 percent and the yield on short-term 2-year remained tad lower at -0.141 percent.
The Australian government bonds plunged during Asian trading session Monday tracking a similar movement in the United States’ counterpart as investors still remain hopeful over a trade agreement between the latter and China before March 27. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 4-1/5 basis points to 2.192 percent, the yield on the long-term 30-year bond also surged 4-1/2 basis points to trade at 2.757 percent and the yield on short-term 2-year climbed nearly 2-1/2 basis points to 1.759 percent.
