Market Roundup
- Australia Q4 Wage Price Index q/q, 0.6% vs 0.5%, 0.5% f'cast
- Australia Q4 Wage Price Index y/y, 2.1% vs 2.0%, 2.0% f'cast
- Australia Q4 Construction work done, -19.4% vs 15.7% (16.6% rvsd), -10.0% f'cast
- With stimulus exit looming, communication challenges await new BOJ trio
- Japan Feb Mfg PMI–flash 54.0, Jan 54.8, new export orders slow on JPY rise
- Japan PM Abe seeks more stimulus to keep economy humming beyond Olympics – Nikkei
- MoF Asakawa – JPY recent moves one-sided, cites G20 currency pact – Nikkei
- Mueller ups pressure on Trump campaign aides with new charge
- N.Korea canceled planned meeting with U.S. VP Pence -Pence's office
- Merkel's future in Social Democratic hands as party vote starts
- UK regulator warns lawmakers over post-Brexit market rules
- Tory Eurosceptics try show of strength with May - Financial Times
Economic Data Ahead
- (0330 ET/0830 GMT) Germany Feb Markit Mfg Flash PMI, 60.6 f'cast, 61.1 prev
- (0330 ET/0830 GMT) Germany Feb Services Flash PMI, 57.0 f'cast, 57.3 prev
- (0330 ET/0830 GMT) EU Feb Markit Comp Flash PMI, 58.5 f'cast, 59.0 prev
- (0400 ET/0900 GMT) EU Feb Markit Mfg Flash PMI, 59.3 f'cast, 59.6 prev
- (0400 ET/0900 GMT) EU Feb Services Flash PMI, 57.6 f'cast, 58.0 prev
- (0400 ET/0900 GMT) EU Feb Markit Comp Flash PMI, 58.5 f'cast, 58.8 prev
- (0430 ET/0930 GMT) Great Britain Jan Claimant Count Unemp chng, 4.1k f'cast, 8.6k prev
- (0430 ET/0930 GMT) Great Britain Dec ILO Unemployment Rate, 4.3% f'cast, 4.3% prev
- (0430 ET/0930 GMT) Great Britain Dec Employment change, 173k f'cast, 102k prev
Key Events Ahead
- (0440 ET/0940 GMT) Portugal E1.0-1.25/E1.0-1.25 bln for 3/11 month auction
- (0530 ET/1030 GMT) Riksbank Deputy Governor Per Jansson speaks in Stockholm
- (0900 ET/1400 GMT) Philadelphia Fed President Patrick Harker speaks in Missouri
- (0915 ET/1415 GMT) BoE's Carney, Broadbent, Haldane and Tenreyro speak in London
FX Beat
DXY: The dollar index rallied to a 1-week peak as the near-term focus shifted to the minutes of the Federal Reserve's last policy meeting for clues on the future pace of U.S. monetary tightening. The greenback against a basket of currencies traded 0.1 percent up at 89.83, having touched a high of 89.90, its highest since Feb. 14. FxWirePro's Hourly Dollar Strength Index stood at 140.34 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro slumped to a 1-week low as the greenback rebounded from last week's three-year low ahead of the minutes of the U.S. Federal Reserve's last policy meeting. The European currency traded 0.2 percent down at 1.2319, having touched a low of 1.2317 earlier, its lowest since Feb. 14. FxWirePro's Hourly Euro Strength Index stood at -12.62 (Neutral) by 0500 GMT. Investors’ attention will remain on series of economic data from the Eurozone preliminary PMI's, ahead of U.S. PMI reports, existing home sales and FOMC minutes. Immediate resistance is located at 1.2450, a break above targets 1.2500. On the downside, support is seen at 1.2284, a break below could drag it lower 1.2245 (Feb 7 Low).
USD/JPY: The dollar rose to a 1-week peak against the Japanese yen as markets repriced a more hawkish Fed policy, given the recent data has shown an uptick in inflation and wage growth numbers. The major was trading 0.4 percent up at 107.78, having hit a low of 105.55 on Friday, its lowest since Nov. 2016. FxWirePro's Hourly Yen Strength Index stood at 70.70 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. PMI reports, existing home sales and FOMC minutes. Immediate resistance is located at 108.59 (38.2% retracement of 110.48 and 105.74), a break above targets 109.30 (23.6% retracement). On the downside, support is seen at 106.55 (Previous Session Low), a break below could take it lower 105.80.
GBP/USD: Sterling extended losses for the fourth straight session, as traders anticipate both key indicators ILO Unemployment and Average Earnings to hold at their previous readings of 4.3 percent and 2.5 percent respectively. The major traded 0.1 percent down at 1.3978, having hit a high of 1.4144 on Friday, it’s highest since Feb 5. FxWirePro's Hourly Sterling Strength Index stood at 67.63 (Bullish) by 0500 GMT. Investors’ focus will remain on the UK Average Earnings growth, ILO 3-month Unemployment Rate, Claimant Count, and Public Sector Net Borrowing, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.4050, a break above could take it near 1.4144 (Feb 16 High). On the downside, support is seen at 1.3931 (Previous Session Low), a break below targets 1.3900. Against the euro, the pound was trading 0.05 percent down at 88.20 pence, having hit a low of 89.19 pence on Wednesday, it’s lowest since Jan. 12.
AUD/USD: The Australian dollar tumbled to a 1-week trough after a muted reading on wages underlined the negligible chance of a rate rise anytime soon. The Aussie trades 0.3 percent down at 0.7856, having hit a high of 0.7988 on Friday; it’s highest since Feb 2. FxWirePro's Hourly Aussie Strength Index stood at -78.79 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7828, a break below targets 0.7773. On the upside, resistance is located at 0.7913 (5-DMA), a break above could take it near 0.7945 (21-DMA).
NZD/USD: The New Zealand dollar declined on expectations that the domestic cash rates are not likely to rise anytime soon, with the central bank projecting a chance of the first move by mid-2019. The Kiwi trades 0.2 percent down at 0.7335, having touched a high of 0.7437 on Friday, its highest level since August 2017. FxWirePro's Hourly Kiwi Strength Index was at 9.80 (neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7374, a break above could take it near 0.7400. On the downside, support is seen at 0.7312 (10-DMA) a break below could drag it below 0.7300.
Equities Recap
Asian shares rallied, while the greenback rose to a 1-week peak, as traders near-term focus shifted to the minutes of the Federal Reserve's last policy meeting for hints on the future pace of U.S. monetary tightening.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.7 percent.
Tokyo's Nikkei rose 0.2 percent to 21,970.81 points, Australia's S&P/ASX 200 index gained 0.05 percent to 5,943.70 points and South Korea's KOSPI advanced 0.5 percent to 2,427.61 points.
Hong Kong’s Hang Seng was trading 1.5 percent higher at 31,340.32 points. Taiwan shares added 2.8 percent to 10,714.44 points.
Commodities Recap
Crude oil prices declined, weighed down by a rebound in the U.S. dollar from three-year lows hit last week and an expected rise in U.S. oil production. International benchmark Brent crude was trading 0.6 percent down at $64.66 per barrel by 0537 GMT, having hit a high of $65.86 on Monday, its highest since Feb. 8. U.S. West Texas Intermediate was trading 0.8 percent down at $61.09 a barrel, after rising as high as $62.62 the day before, its strongest since Feb. 8.
Gold prices slumped to a one-week low as the dollar rebounded from last week's three-year low, while investors awaited the minutes of the U.S. Federal Reserve's last policy meeting for clues on the pace of interest rate hikes this year. Spot gold declined 0.2 percent to $1,327.33 an ounce by 0540 GMT, having fallen to its lowest level since Feb. 14 at $1,325.40 earlier. U.S. gold futures were down 0.2 percent at $1,328.5 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.891 percent lower by 0.002 bps, while 5-year yield was 0.005 bps up at 2.653 percent.
The Japanese bonds traded nearly flat as investors eyed January consumer inflation data scheduled to be released on Thursday at 23:30GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.062 percent, the yield on the long-term 30-year note remained steady at 0.790 percent and the yield on short-term 2-year stood flat at -0.150 percent.
The Australian bonds snapped losses as investors covered previous short positions despite a better-than-expected wage price index data for the fourth-quarter of this year, released early today. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2 basis points to 2.88 percent, the yield on the long-term 30-year note fell nearly 1-1/2 basis points to 3.51 percent and the yield on short-term 2-year traded tad lower at 2.06 percent.
The New Zealand government bonds ended Wednesday’s session on a higher note after dairy product prices declined at the overnight GlobalDairyTrade auction, sliding for the first time this year after three consecutive increases. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 2.98 percent, the yield on 20-year also edged 1/2 basis point lower to 3.48 percent while the yield on short-term 2-year closed 2 basis points lower at 1.88 percent.
