Market Roundup
- U.S. expected to impose up to $60 bln in China tariffs by Friday -sources
- G20 pushes for free trade as U.S. vows to defend national interest
- Japan says G20 communique to reflect fears of protectionism, gap remains
- Japan TradeMin Seko – High chance Japan exempted from US steel, aluminum tariffs
- China fully confident in achieving 2018 economic targets - Premier Li
- China's door to outside will only open wider - Li
- China waives income tax for foreign investors trading yuan crude futures
- China's Xi warns Taiwan will face "punishment of history" for separatism
- Japan Reuters Mar Tankan mfg index +28/non-mfg +35, best since Jun’15, Feb +29/+33
- U.S. bans transactions with Venezuela's digital currency
- Pompeo to face tough questions on N.Korea, Iran -senator
- U.S.-South Korea military exercises to resume next month
Economic Data Ahead
- (0300 ET/0700 GMT) Germany Feb Producer Prices, 0.1% m/m, 2.0% y/y, eyed; 0.5%, 2.1% last
- (0530 ET/0930 GMT) Great Britain Feb Core CPI, 0.6% m/m, 2.5% y/y, eyed; -0.8%, 2.7% last
- (0530 ET/0930 GMT) Great Britain Feb CPI, 0.5% m/m, 2.8% y/y, eyed; -0.5%, 3.0%, last
- (0530 ET/0930 GMT) Great Britain Feb RPI 0.8% m/m, 3.7% y/y, eyed; -0.8%, 4.0%, last
Key Events Ahead
- N/A U.S. Federal Reserve's Federal Open Market Committee (FOMC) starts its two-day meeting on interest rates
- (0600 ET/1000 GMT) Norges Bank Deputy Governor Egil Matsen gives a speech at a conference hosted by Finance Norway in Oslo
FX Beat
DXY: The dollar index slightly eased as investors pondered whether the U.S. Federal Reserve will signal a faster pace of rate increases in the coming months as the labour market tightens further. The greenback against a basket of currencies 0.1 percent down at 89.87, having touched a high of 90.38 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at 77.84 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after falling to an over 2-week low in the previous session, as traders revived bets that the European Central Bank would raise interest rates sooner than previously thought. The European currency traded 0.05 percent up at 1.2341, having touched a low of 1.2258 the day before, its lowest since Mar. 2. FxWirePro's Hourly Euro Strength Index stood at 89.30 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on the ZEW Survey- Eurozone economic sentiment, amid a lack of economic data from the U.S. docket. Immediate resistance is located at 1.2358 (Previous Session High), a break above targets 1.2383 (Mar. 15 High). On the downside, support is seen at 1.2300 (Mar. 15 Low), a break below could drag it lower 1.2251 (Mar. 2 Low).
USD/JPY: The dollar rose, extending previous session gains, as the U.S. Federal Reserve is expected to signal a faster pace of rate increases in the coming months at the end of a two-day policy meeting on Wednesday. The major was trading 0.2 percent up at 106.29, having hit a low of 105.60 on Friday, its lowest since Mar. 7. FxWirePro's Hourly Yen Strength Index stood at -41.13 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, as U.S. economic data calendar remains absolutely data empty. Immediate resistance is located at 106.53 (21-DMA), a break above targets 106.97 (Mar 12 High). On the downside, support is seen at 105.67 (Previous Session Low), a break below could take it lower 105.25.
GBP/USD: Sterling steadied after rising to a 3-week peak above the 1.4000 handle in the previous session, as Britain and the European Union agreed to a 21-month post- Brexit transition period and a potential solution to evade a hard border for Northern Ireland. The major traded 0.05 percent up at 1.4027, having hit a high of 1.4088 on Monday, it’s highest since Feb. 16. FxWirePro's Hourly Sterling Strength Index stood at 62.55 (Bullish) by 0500 GMT. Investors’ focus will remain on UK retail sales, producer price index and consumer price index, amid a lack of data from the US docket. Immediate resistance is located at 1.4145, a break above could take it near 1.4233. On the downside, support is seen at 1.3965 (5-DMA), a break below targets 1.3907 (21-DMA). Against the euro, the pound was trading 0.05 percent down at 87.93 pence, having hit a high of 87.45 pence the day before, it’s highest since Feb 8.
AUD/USD: The Australian dollar declined, extending losses for the fourth straight session, undermined by risk aversion ahead of a much-anticipated U.S. Federal Reserve policy meeting. The Aussie trades 0.2 percent down at 0.7703, having hit a low of 0.7686 the day before; it’s lowest since Dec. 21. FxWirePro's Hourly Aussie Strength Index stood at -126.55 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment. Immediate support is seen at 0.7653 (Dec. 21 Low), a break below targets 0.7626 (Dec 14 Low). On the upside, resistance is located at 0.7738 (78.6% retracement of 0.7916 and 0.7687), a break above could take it near 0.7816 (10-DMA).
NZD/USD: The New Zealand dollar slumped, reversing some of its previous session gains, as concerns over U.S. tariffs on imported steel and aluminium hurt demand for iron ore. The Kiwi trades 0.3 percent down at 0.7221, having touched a low of 0.7195 on Monday, its lowest level since Mar. 1. FxWirePro's Hourly Kiwi Strength Index was at -122.34 (Highly Bearish) by 0500 GMT. Immediate resistance is located at 0.7278 (5-DMA), a break above could take it near 0.7297 (Mar 9 High). On the downside, support is seen at 0.7202 (Mar. 5 Low), a break below could drag it below 0.7186 (Mar. 1 Low)
Equities Recap
Asian shares slumped as investors took profits in U.S. technology shares, while the greenback slightly eased as investors braced for new Federal Reserve Chairman Jerome Powell's first policy meeting starting later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.4 percent.
Tokyo's Nikkei eased 0.5 percent to 21,380.97 points, Australia's S&P/ASX 200 index declined 0.4 percent to 5,939.40 points and South Korea's KOSPI rallied 0.4 percent to 2,483.19 points.
Shanghai composite index rose 0.3 percent to 3,288.74 points, while CSI300 index was trading 0.05 percent up at 4,074.30 points.
Hong Kong’s Hang Seng was trading 0.1 percent higher at 31,540.35 points. Taiwan shares shed 0.3 percent to 11,010.84 points.
Commodities Recap
Crude oil prices edged up, supported by tensions in the Middle East, although rising output in the United States limited further gains. International benchmark Brent crude was trading 0.1 percent up at $66.21 per barrel by 0431 GMT, having hit a high of $66.40 on Friday, its highest since Feb. 28. U.S. West Texas Intermediate was trading 0.3 percent down at $62.31 a barrel, after rising as high as $62.51 last week, its strongest since Mar. 7.
Gold prices steadied, having recovered from over a two-week low hit in the previous session, as traders waited to gauge the path of U.S. monetary policy for the rest of the year from the two-day Federal Reserve meeting that commences later in the day. Spot gold was trading flat at $1,316.22 per ounce at 0433 GMT, having hit a low of $1,307.71 an ounce on Monday, its lowest since Mar. 1. U.S. gold futures for April delivery dropped 0.1 percent to $1,316.10 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.862 percent higher by 0.018 bps, while 5-year yield was 0.017 bps high at 2.658 percent.
The Japanese government bonds traded tad lower during Asian session as investors wait to see a slight rise in the country’s national consumer price inflation data, scheduled to be released on March 22 by 23:30GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slightly rose to 0.04 percent, the yield on the long-term 20-year note edged nearly 1/2 basis point higher to 0.75 percent and the yield on short-term 2-year hovered around -0.15 percent.
The Australian government bonds traded mixed as investors await the Federal Reserve monetary policy decision, where it is widely expected to hike interest rate by 25 basis points to 1.50-1.75 percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis points to 2.700 percent, the yield on the long-term 30-year note traded flat at 3.290 percent and the yield on short-term 2-year climbed 2 basis points to 1.999 percent.
The New Zealand government bonds surged at the time of closing as investors wait to watch the country’s GlobalDairyTrade (GDT) auction, scheduled to be held later today. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1-1/2 basis points to 2.85 percent, the yield on 20-year slumped 2 basis points to 3.35 percent and the yield on short-term 2-year closed flat at 1.91 percent.
The Canadian government bond prices were lower across the yield curve, with the two-year down 3.5 Canadian cents to yield 1.783 percent and the 10-year falling 24 Canadian cents to yield 2.166 percent.
