Market Roundup
- China sets stage for Xi to stay in office indefinitely
- China's Jan average new home prices rise 5 pct y/y
- New deputy leader for Australia after sex scandal forces party shake-up
- Merkel's CDU votes on German coalition deal after new cabinet picks
- UK's Labour piles pressure on May over Brexit stance
- BoE's Ramsden sees case to raise rates sooner than he thought
- UK services businesses enjoy first profit rise in in 2 years-CBI
- BoJ Gov Kuroda (in Diet) – No plan for another comprehensive policy review
- S.Korea says it hopes for constructive talks between U.S., N.Korea
- New NAFTA talks aim to clear pathway to toughest issues
- IMM CTA data - CFTC - Spec net USD short bets drop to 7-week low
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- (0500 ET/1000 GMT) ECB Executive Board member Benoit Coeure speaks in Frankfurt
- (0505 ET/1005 GMT) Italy E6.0 bln for 6-month auction
- (0800 ET/1300 GMT) St. Louis Fed President James Bullard speaks in Washington
- (0855 ET/1355 GMT) France E3.0-3.4/1.3-1.7/1.1-1.5 bln for 3/6/12 month auction
- (0900 ET/1400 GMT) ECB‘s Draghi speaks at the European Parliament's ECON committee in Brussels
FX Beat
DXY: The dollar index eased, while investors awaited Federal Reserve Governor Jerome Powell's first congressional testimony for hints on the future pace of U.S. monetary tightening. The greenback against a basket of currencies traded 0.3 percent down at 89.64, having touched a high of 90.24 on Thursday, its highest since Feb. 13. FxWirePro's Hourly Dollar Strength Index stood at 46.91 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, reversing some of its previous session losses, while investors turned cautious ahead of a German Social Democrats' poll of its members on joining another coalition government with Chancellor Angela Merkel’s conservatives and the Italian general election on March 4. The European currency traded 0.2 percent up at 1.2316, having touched a low of 1.2265 Thursday, its lowest since Feb. 14. FxWirePro's Hourly Euro Strength Index stood at -123.15 (Highly Bearish) by 0500 GMT. Investors’ attention will remain on series of economic data from the Eurozone economies, ahead of U.S. new home sales. Immediate resistance is located at 1.2365 (10-DMA), a break above targets 1.2410. On the downside, support is seen at 1.2245 (Feb 7 Low), a break below could drag it lower 1.2205 (Feb 9 Low).
USD/JPY: The dollar fell to a 1-week low against the Japanese yen, as the focus this week shifted on Fed Chairman Jerome Powell's congressional testimony on monetary policy and the economy before the U.S. House of Representatives' Financial Services Committee. The major was trading 0.2 percent down at 106.64, having hit a high of 107.90 on Wednesday, its highest since Feb.14. FxWirePro's Hourly Yen Strength Index stood at 90.19 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. new home sales. 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 surged to a 6-day high on the back of an increasingly hawkish outlook from the Bank of England. The BoE Deputy Governor Dave Ramsden turned surprisingly hawkish over the weekend, stating that he expects a rate increase somewhat sooner rather than later, triggering some confidence in the sterling bulls. The major traded 0.4 percent up at 1.4018, having hit a low of 1.3858 on Thursday, it’s lowest since Feb 14. FxWirePro's Hourly Sterling Strength Index stood at 54.17 (Bullish) by 0500 GMT. Investors’ focus will remain on the UK Nationwide Housing Prices, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.4050, a break above could take it near 1.4104 (Feb 15 High). On the downside, support is seen at 1.3904 (Feb 21 Low), a break below targets 1.3845. Against the euro, the pound was trading 0.05 percent up at 88.25 pence, having hit a high of 87.84 pence earlier, it’s highest since Feb. 9.
AUD/USD: The Australian dollar advanced to a 5-day high, supported by strength on Wall Street after the Federal Reserve eased investor concerns over the monetary policy outlook this year. The Aussie trades 5 percent up at 0.7881, having hit a low of 0.7790 Thursday; it’s lowest since Feb 14. FxWirePro's Hourly Aussie Strength Index stood at -90.26 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7804, a break below targets 0.7773. On the upside, resistance is located at 0.7917 (21-DMA), a break above could take it near 0.7966.
NZD/USD: The New Zealand dollar rebounded after falling to an over 1-week low on Friday, as key economic data points for New Zealand were recently revised upwards. The Kiwi trades 0.5 percent up at 0.7331, having touched a low of 0.7270 on Friday, its lowest level since Feb. 14. FxWirePro's Hourly Kiwi Strength Index was at -118.39 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7365, a break above could take it near 0.7400. On the downside, support is seen at 0.7270 (Previous Session Low) a break below could drag it below 0.7239.
Equities Recap
Asian shares consolidated within narrow ranges, while the greenback slightly eased as investors braced for U.S. inflation data and the first House testimony by the new head of the Federal Reserve.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei gained 1.2 percent to 22,153.63 points, Australia's S&P/ASX 200 index surged 0.7 percent to 6,042.20 points and South Korea's KOSPI advanced 0.3 percent to 2,457.26 points.
Shanghai composite index rose 1.01 percent to 3,324.73 points, while CSI300 index was trading 1.05 percent up at 4,133.75 points.
Hong Kong’s Hang Seng was trading 0.7 percent higher at 31,470.66 points. Taiwan shares added 0.4 percent to 10,836.70 points.
Commodities Recap
Crude oil prices rose to hit their highest level in nearly three weeks, supported by comments from Saudi Arabia that it would continue to curb exports in line with the OPEC-led effort to cut global supplies. International benchmark Brent crude was trading 0.2 percent up at $67.44 per barrel by 0451 GMT, having hit a high of $67.56 earlier, its highest since Feb. 7. U.S. West Texas Intermediate was trading 0.3 percent up at $63.77 a barrel, after rising as high as $63.88 on, its strongest since Feb. 7.
Gold prices rose to a 6-day high after declining more than 1 percent last week, as the U.S. dollar eased following recent gains. Spot gold rose 0.1 percent at $1,333.94 an ounce at 0457 GMT, having fallen to its lowest level since Feb. 14 at $1,320.85 on Wednesday. U.S. gold futures were up 0.1 percent at $1,332.3 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.855 percent lower by 0.016 bps, while 5-year yield was 0.015 bps down at 2.603 percent.
The Australian government bond futures rose, with the three-year bond contract up 3.5 ticks at 97.935. The 10-year contract climbed 7.5 ticks to 97.2400.
The New Zealand government bonds gained, sending yields 5 basis points lower at the long end of the curve.
