Market Roundup
- Top U.S. trade officials head to China next week for new trade talks
- Some U.S. Officials Are Concerned That China Is Pushing Back Against American Demands In Trade Talks -Bloomberg
- May's letter to EU on Brexit extension to be sent Wednesday -BBC
- Canada offers stimulus budget, but may be too little to re-elect Trudeau government
- Asian business sentiment lingers near 3-year low as trade war drags -Thomson Reuters/INSEAD
- Japan factory mood hits weakest since 2016 as trade rifts bite-Reuters Tankan
- BOJ policymakers disagree on next policy move as risks mount
- Australia's falling home prices not yet a threat to banks-RBA
- New Zealand Q4 Current Account- Annual, -10.974 bln, -11.300 bln f'cast, -10.539 bln prev
Economic Data Ahead
- (0300 ET/0700 GMT) Feb Germany Producer Prices MM, 0.2% f'cast, 0.4% prev
- (0300 ET/0700 GMT) Feb Germany Producer Prices YY, 2.9% f'cast, 2.6% prev
- (0530 ET/0930 GMT) Feb Great Britain Core CPI YY, 1.9% f'cast, 1.9% prev
- (0530 ET/0930 GMT) Feb Great Britain CPI YY, 1.8% f'cast, 1.8% prev
- (0530 ET/0930 GMT) Feb Great Britain RPI YY, 2.5% f'cast, 2.5% prev
- (0530 ET/0930 GMT) Feb Great Britain PPI Input Prices YY NSA, 4.3% f'cast, 2.9% prev
- (0530 ET/0930 GMT) Feb Great Britain PPI Output Prices YY NSA, 2.2% f'cast, 2.1% prev
- (0530 ET/0930 GMT) Feb Great Britain PPI Core Output YY NSA, 2.3% f'cast, 2.4% prev
- (0700 ET/1100 GMT) Mar Great Britain CBI Trends - Orders, 2 f'cast, 6 prev
Key Events Ahead
- N/A OMFIF-World Trade Organization seminar in London
- (0730 ET/1130 GMT) German Finance Minister Olaf Scholz holds a news conference to present the 2019 budget and budget plans for the coming years in Berlin
- (1400 ET/1800 GMT) U.S. Federal Reserve's FOMC announces its decision on interest rates followed by statement in Washington
- (1430 ET/1830 GMT) U.S. Federal Reserve chairperson holds a news conference in Washington
FX Beat
DXY: The dollar index rebounded from a near 3-week low record in the prior session, as investors awaited Fed policy decision, which is expected to shed more light on its interest rate plans for the rest of the year. The greenback against a basket of currencies traded 0.05 percent up at 96.46, having touched a low of 96.29 on Tuesday, its lowest since March 1. FxWirePro's Hourly Dollar Strength Index stood at 30.54 (Neutral) by 0500 GMT.
EUR/USD: The euro declined, halting a 3-day winning streak, as the greenback rebounded after data showed factory goods orders edged up 0.1 percent in January. The European currency traded 0.05 percent down at 1.1346, having touched a high of 1.1361 on Tuesday, its highest since Mar. 4. FxWirePro's Hourly Euro Strength Index stood at 75.64 (Slightly Bullish) by 0500 GMT. Investors’ attention will remain on German producer price index and ECB non-monetary policy meeting, ahead of the Fed policy meeting. Immediate resistance is located at 1.1367 (78.6% retracement of 1.1176 and 1.1496), a break above targets 1.1408 (March 1 High). On the downside, support is seen at 1.1294 (March 4 Low), a break below could drag it till 1.1243 (Mar. 12 Low).
USD/JPY: The dollar surged to a 5-day peak, as investors focus on the Fed to see whether the central bank will affirm its commitment to patient monetary policy and for clues about the likely path of U.S. borrowing costs. The major was trading 0.2 percent up at 111.56, having hit a low of 111.15 on Tuesday, its lowest since March 14. FxWirePro's Hourly Yen Strength Index stood at 30.54 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the Fed policy meeting. Immediate resistance is located at 112.13 (Mar. 5 High), a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 111.00 (Mar. 13 Low), a break below could take it lower at 110.66 (Feb.28 Low).
GBP/USD: Sterling declined, reversing most of its previous session gains, on concerns that British Prime Minister Theresa May's request for postponing Brexit was facing obstacles with the European Union. The major traded 0.1 percent down at 1.3256, having hit a high of 1.3380 on Wednesday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at -35.62 (Neutral) 0500 GMT. Investors’ will remain on UK retail sales, producer price index and consumer price index, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3319 (Feb. 28 High), a break above could take it near 1.3380 (Mar. 13 High). On the downside, support is seen at 1.3202 (Mar. 15 Low), a break below targets 1.3166 (Mar. 4 Low). Against the euro, the pound was trading 0.1 percent down at 85.60 pence, having hit a high of 84.71 last week, it’s highest since May 2017.
AUD/USD: The Australian dollar plunged to a 6-day low, after Reserve Bank of Australia Assistant Governor Michele Bullock said there were risks to builders from a glut of new apartments and cautioned banks not to go too far in curbing the supply of credit to the economy. The Aussie trades 0.2 percent down at 0.7077, having hit a high of 0.7119 on Monday, it’s highest since Mar. 1. FxWirePro's Hourly Aussie Strength Index stood at -68.55 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7041 (Mar. 14 Low), a break below targets 0.6993 (Jan.4 Low). On the upside, resistance is located at 0.7119 (Feb. 18 High), a break above could take it near 0.7182 (Feb. 20 High).
NZD/USD: The New Zealand dollar eased after rising for 3-straight sessions, amid speculation interest rates in NZ would have to be cut in coming months. The Kiwi trades 0.3 percent down at 0.6835, having touched a high of 0.6874 on Monday, its highest level Feb. 27. FxWirePro's Hourly Kiwi Strength Index was at 34.71 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6876 (Feb. 21 High), a break above could take it near 0.6901 (Feb. 27 High). On the downside, support is seen at 0.6808 (Mar. 14 Low), a break below could drag it below 0.6757 (Feb. 22 Low).
Equities Recap
Asian shares declined from 6-month highs as investors took profits ahead of a policy decision by the U.S. Federal Reserve.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.4 percent.
Tokyo's Nikkei rose 0.2 percent to 21,608.92 points, Australia's S&P/ASX 200 index declined 0.3 percent to 6,165.30 points and South Korea's KOSPI tumbled 0.05 percent to 2,177.02 points.
Shanghai composite index eased 0.1 percent to 3,087.05 points, while CSI300 index traded 0.05 percent down at 3,832.83 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 29,401.02 points. Taiwan shares added 0.4 percent to 10,551.56 points
Commodities Recap
Crude oil prices declined, retreating from a 4-month high as economic growth concerns dampened the outlook for fuel consumption. However, supply cuts led by producer cartel OPEC and U.S. sanctions against Iran and Venezuela limited downside. International benchmark Brent crude was trading 0.2 percent down at $67.54 per barrel by 0430 GMT, having hit a high of $68.18 on Tuesday, its highest since Nov. 16. U.S. West Texas Intermediate was trading 0.1 percent higher at $59.12 a barrel, after rising as high as $59.55 on Tuesday, its highest since the Nov. 13.
Gold prices eased, halting a 3-day winning streak, as the dollar firmed, while investors awaited the results of the U.S. Federal Reserve's policy meeting later in the day. Spot gold was 0.1 percent down at $1,304.74 per ounce at 0435 GMT, having touched a high of $1,310.83 on Tuesday, its highest since March 13. U.S. gold futures also dipped about 0.2 percent to $1,304.50 an ounce.
Treasuries Recap
The Japanese government bond prices fell, with the 10-year JGB futures easing 0.08 points to 152.73. The 10-year cash JGB yield rose one basis point to minus 0.040 percent. The 20-year and the 30-year yields added one basis point each to 0.390 percent and 0.565 percent, respectively. The 40-year yield climbed 1.5 basis points to 0.630 percent.
The yields on Australian three-year notes eased 23 basis points since the start of March to hit 1.485 percent. The 10-year bond futures contract has surged 29 ticks to 98.0700 in little more than two weeks, taking it nearer to the all-time peak of 98.2000.
