Market Roundup
- Asia fears trade war after Trump plans hefty steel, aluminium tariffs
- Fed chief Powell says no evidence U.S. economy overheating
- Japan Feb Tokyo core CPI +0.9% y/y, +0.8% eyed, overall CPI +1.4%, ex-f/e +0.5%
- Japan Jan unemployment 2.4%, lowest since April 1993, 2.7% eyed, December 2.8%
- Japan Jobs/applicants ratio unchanged in January at 1.59, 1.60 eyed
- Britain's May to set out Brexit vision for trade deal deeper than any other
- German SPD minister expects 60 percent party support for coalition
- ECB to chart steady course in March meeting: sources
- China warns Taiwan playing with fire over U.S. bill
- Australia's banking watchdog flags end of investor credit cap
- NZ consumer confidence rises to 127.7 in February - ANZ survey
- U.S. muni bond funds post $590.9 mln in outflows-Lipper
- Foreign CB US debt holdings +$5,881 bln to $3.418 trln Feb 28 week
- Treasuries +$4,703 bln to $3.074 trln, agencies +$1,366 bln to $263.472 bln
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Jan Import Prices, 0.5% m/m, 0.7% y/y eyed; 0.3%, 1.1% prev
- (0200 ET/0700 GMT) Germany Jan Retail Sales real, 0.9% m/m, 3.5% y/y eyed; -1.9%, -1.9% prev
- (0400 ET/0900 GMT) France Q4 GDP Final, 0.3% q/q, 1.6% y/y eyed; 0.4%, 1.7% prev
- (0430 ET/0930 GMT) Great Britain Feb Markit/CIPS Cons PMI, 50.5 eyed, 50.2 prev
- (0500 ET/1000 GMT) EU Jan Producer Prices, 0.4% m/m, 1.6% y/y eyed; 0.2%, 2.2% prev
Key Events Ahead
- (0310 ET/0810 GMT) ECB's Yves Mersch gives speech at KPMG Finance Forum 2018 in Prague
- (0500 ET/1000 GMT) Bank of England Governor Mark Carney speaks in Edinburgh
- (0605 ET/1105 GMT) Great Britain Stg 2.0/Stg 2.0/Stg 2.0 bln for 1/3/6 month auctions
- (1230 ET/1730 GMT) European Commission President Juncker speaks in Hamburg
FX Beat
DXY: The dollar index eased from recent highs following U.S. President Donald Trump's decision to impose tariffs on steel and aluminium. The greenback against a basket of currencies traded 0.1 percent down at 90.14, having touched a high of 90.93 on Thursday, its highest since Jan. 18. FxWirePro's Hourly Dollar Strength Index stood at -4.62 (Neutral) by 0500 GMT.
EUR/USD: The euro extended rebound after sliding to a seven-week low in the previous session, as focus shifted on the Italian parliamentary election scheduled on Sunday. The European currency traded 0.1 percent up at 1.2279, having touched a low of 1.2155 on Thursday, its lowest since Jan. 12. FxWirePro's Hourly Euro Strength Index stood at 21.46 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone producer price index, ahead of New York Business Conditions Index and Michigan consumer sentiment index. Immediate resistance is located at 1.2340 (21-DMA), a break above targets 1.2371 (Feb 13 High). On the downside, support is seen at 1.2188 (Feb 28 Low), a break below could drag it lower 1.2155.
USD/JPY: The dollar slumped to a 2-week low after Trump announced on Thursday that he would impose steep tariffs on imported steel and aluminium. The major was trading 0.4 percent down at 105.81, having hit a low of 105.71 earlier, its lowest since Feb.16. FxWirePro's Hourly Yen Strength Index stood at 57.21 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. personal consumption expenditure- price index, unemployment benefit claims and Manufacturing PMI by Markit and ISM. Immediate resistance is located at 107.90 (Feb 21. High), a break above targets 108.50. On the downside, support is seen at 106.09, a break below could take it lower 105.60.
GBP/USD: Sterling steadied after falling to a 7-week low the day before on worries a Brexit transition deal might not be reached this month. The major traded 0.05 percent up at 1.3781, having hit a low of 1.3712 on Thursday, it’s lowest since Jan 12. FxWirePro's Hourly Sterling Strength Index stood at -120.08 (Highly Bearish) by 0500 GMT. Investors’ focus will remain on the UK Prime Minister Theresa May's speech, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3875 (5-DMA), a break above could take it near 1.3951 (21-DMA). On the downside, support is seen at 1.3700, a break below targets 1.3665. Against the euro, the pound was trading 0.05 percent down at 89.07 pence, having hit a low of 89.09 pence, it’s lowest since Feb. 14.
AUD/USD: The Australian dollar held firm after tumbling to an over 2-month low the prior day, as U.S. President Donald Trump imposed a tariff on imported steel and aluminium, triggering fears of a global trade war. The Aussie trades 0.1 percent up at 0.7760, having hit a low of 0.7712 on Thursday; it’s lowest since Dec 26. FxWirePro's Hourly Aussie Strength Index stood at -15.57 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7699 (Dec 22 Low), a break below targets 0.7653 (Dec 21 Low). On the upside, resistance is located at 0.7798 (5-DMA), a break above could take it near 0.7834 (21-DMA).
NZD/USD: The New Zealand dollar rose, extending previous session gains, supported by broad sell-off in the greenback. The Kiwi trades 0.4 percent up at 0.7273, having touched a low of 0.7186 the day before, its lowest level since Feb. 8. FxWirePro's Hourly Kiwi Strength Index was at 126.97 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7303 (21-DMA), a break above could take it near 0.7345. On the downside, support is seen at 0.7144 (Jan. 5 Low), a break below could drag it below 0.7100.
Equities Recap
Asian shares extended losses as investors were cautious by the spectre of a global trade war, while the greenback came off recent highs after President Donald Trump announced the United States would impose hefty tariffs on steel and aluminium imports.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 1.1 percent.
Tokyo's Nikkei fell 2.2 percent to 21,240.98 points, Australia's S&P/ASX 200 index plunged 0.7 percent to 5,928.90 points and South Korea's KOSPI lost 0.8 percent to 2,409.76 points.
Shanghai composite index declined 0.6 percent to 3,253.43 points, while CSI300 index was trading 0.8 percent down at 4,017.40 points.
Hong Kong’s Hang Seng was trading 1.5 percent lower at 30,592.99 points. Taiwan shares shed 0.8 percent to 10,698.17 points.
Commodities Recap
Crude oil prices edged down for the fourth straight session, as Asian share markets extended a selloff on Wall Street after news of planned U.S. tariffs on steel and aluminium raised fears of a trade war. .International benchmark Brent crude was trading 0.4 percent down at $63.90 per barrel by 0453 GMT, having hit a high of $67.86 on Monday, its highest since Feb. 7. U.S. West Texas Intermediate was trading 0.6 percent down at $60.98 a barrel, after rising as high as $64.21 on Monday, its strongest since Feb. 7.
Gold prices steadied after falling to a near two-month low in the previous session, as the dollar eased after U.S. President Donald Trump announced plans to impose heavy tariffs on imported steel and aluminium. Spot gold was flat at $1,316.83 an ounce at 0455 GMT, having fallen to its lowest level since Jan. 2 at $1,302.68 on Thursday. U.S. gold futures were up 0.9 percent at $1,317.1 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.824 percent higher by 0.022 bps, while 5-year yield was 0.025 bps up at 2.598 percent.
The Japanese government bonds jumped on the last trading day of the week, following higher demand at the country’s 10-year auction and as investors have shrugged-off the fall in the unemployment rate for the month of January. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1-1/2 basis points to 0.04 percent, the yield on the long-term 30-year note also declined 1-1/2 basis points to 0.74 percent and the yield on short-term 2-year dipped 1/2 basis point to -0.16 percent.
The Australian 10-year bond yield dipped nearly 2-month low following firmness in the U.S. Treasuries. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 3 basis points to 2.719 percent, the yield on the long-term 30-year note slid 2 basis point to 3.351 percent and the yield on short-term 2-year down 2-1/2 basis points to 1.973 percent.
The New Zealand government bonds ended Friday’s session on a tad lower note amid a muted trading day that witnessed little data of major economic significance. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.95 percent, the yield on 20-year also edged 1 basis point higher to 3.46 percent while the yield on short-term 2-year closed flat at 1.92 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The 10-year rose 46 Canadian cents to yield 2.176 percent. It touched its lowest intraday since Jan. 17 at 2.170 percent.
