Market Roundup
- Trade skeptics gain upper hand in White House as Cohn quits
- S.Korean officials prepare to reassure partners ahead of N.Korea summit
- Kushner to visit Mexico following latest Trump tirades
- U.S. economy's 'headwinds shifting to tailwinds'-Fed's Brainard
- Talk of U.S. trade war an uncertainty for Fed -Brainard
- Fed's Kaplan says too soon to change forecasts to reflect tariff impact
- Australia's c.bank chief slams U.S. tariffs, confident on domestic growth
- Australia Q4 GDP q/q, 0.4%, 0.6% f'cast, 0.6% last (0.7% rvsd)
- Australia Q4 GDP y/y, 2.4%, 2.5% f'cast, 2.8% last (2.9% rvsd)
- Australian prime minister rules out early election as ratings slump
- China finance minister says 'fully confident' in fending off systemic debt risks
- PREVIEW - Trade war fears, market rout to weigh on BoJ’s upbeat outlook
- Italy's League chief says is only possible PM candidate for centre-right
- Cryptocurrencies are risky for consumers, says BoE's Haldane
Economic Data Ahead
- (0245 ET/0745 GMT) France Jan Trade balance (EUR) SA, -4.35 bln eyed, -3.47 bln prev
- (0330 ET/0830 GMT) Great Britain Feb Hallifax House prices m/m, 0.3% eyed, -0.6% prev
- (0330 ET/0830 GMT) Great Britain Feb Hallifax House prices 3m/yy, 1.6% eyed, 2.2% prev
- (0500 ET/1000 GMT) EU Q4 GDP revised, 0.6% q/q, 2.7% y/y eyed; 0.6%, 2.7% prev
Key Events Ahead
- (0300 ET/0800 GMT) Riksbank executive board meeting
- (0535 ET/1035 GMT) DE E4.0 bln for 5-year auction
- (0730 ET/1230 GMT) New York Fed President William Dudley speaks in Puerto Rico
- (0800 ET/1300 GMT) Atlanta Fed President Raphael Bostic speaks in Florida
- (1000 ET/1500 GMT) Bank of Canada key policy interest rate announcement
FX Beat
DXY: The dollar index steadied after falling to a 2-week low in the previous session on fears that President Donald Trump would go ahead with tariffs following the departure of economic adviser Gary Cohn. The greenback against a basket of currencies traded flat at 89.45, having touched a low of 89.43 the day before, its lowest since Feb. 20. FxWirePro's Hourly Dollar Strength Index stood at -65.40 (Bearish) by 0500 GMT.
EUR/USD: The euro rose to an over 2-week peak on speculation that the European Central Bank might drop its easing bias at a policy meeting this week. The European currency traded 0.1 percent up at 1.2418, having touched a low of 1.2155 on Thursday, its lowest since Jan. 12. FxWirePro's Hourly Euro Strength Index stood at 63.43 (Bullish) by 0500 GMT. Investors’ attention will remain on the Eurozone gross domestic product, ahead of U.S. trade balance, nonfarm productivity report, consumer credit, and Fed officials' speeches. Immediate resistance is located at 1.2435 (Feb 19. High), a break above targets 1.2465 (Feb 14 High). On the downside, support is seen at 1.2326 (21-DMA), a break below could drag it lower 1.2297 (10-DMA).
USD/JPY: The dollar slumped below the 106.00 handle after a key advocate for free trade in the White House announced his resignation, triggering fears President Donald Trump would go ahead with tariffs and risk a trade war. The major was trading 0.5 percent down at 105.58, having hit a low of 105.25 on Friday, its lowest since Nov. 2016. FxWirePro's Hourly Yen Strength Index stood at -10.04 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. trade balance, nonfarm productivity report, consumer credit, and Fed officials' speeches. Immediate resistance is located at 106.65 (10-DMA), a break above targets 107.26 (21-DMA). On the downside, support is seen at 105.35 (Mar. 5 Low), a break below could take it lower 104.90.
GBP/USD: Sterling eased after rising for four straight sessions, ahead of draft guidelines on a trade agreement between the EU and Britain to be published later in the day. The major traded 0.05 percent down at 1.3883, having hit a low of 1.3712 on Thursday, it’s lowest since Jan 12. FxWirePro's Hourly Sterling Strength Index stood at 94.37 (Slightly Bullish) by 0500 GMT. Investors’ focus will remain on the UK Halifax house prices, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3929 (Previous Session High), a break above could take it near 1.3996 (Feb 27 Low). On the downside, support is seen at 1.3814 (5-DMA), a break below targets 1.3766 (Mar. 5 Low). Against the euro, the pound was trading 0.2 percent down at 89.44 pence, having hit a low of 89.51 pence on Friday, it’s lowest since Nov. 28, 2017.
AUD/USD: The Australian dollar declined as renewed concerns about the risk of a global trade war and a soft reading on Australian economic growth weighed heavily on the major. The gross domestic product rose a tepid 0.4 percent in the December quarter, while the annual pace slowed to 2.4 percent from 2.9 percent. The Aussie trades 0.3 percent down at 0.7804, having hit a low of 0.7712 on Thursday; it’s lowest since Dec 26. FxWirePro's Hourly Aussie Strength Index stood at 37.53 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7756 (Previous Session Low), a break below targets 0.7699 (Dec 22 Low). On the upside, resistance is located at 0.7842 (Previous Session High), a break above could take it near 0.7868 (Feb 27 High).
Equities Recap
Asian shares slumped, while the greenback stood near a 2-week low after a key advocate for free trade in the White House resigned, triggering fears that President Donald Trump will proceed with tariffs and risk a trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.3 percent.
Tokyo's Nikkei fell 0.6 percent to 21,282.16 points, Australia's S&P/ASX 200 index lost 1.1 percent to 5,902.00 points and South Korea's KOSPI plunged 0.05 percent to 2,411.16 points.
Shanghai composite index declined 0.2 percent to 3,282.90 points, while CSI300 index was trading 0.4 percent down at 4,051.25 points.
Hong Kong’s Hang Seng was trading 0.7 percent higher at 30,301.13 points. Taiwan shares shed 0.3 percent to 10,754.97 points.
Commodities Recap
Crude oil prices declined, weighed down by weaker stock markets as a key advocate for free trade in the U.S. government resigned, triggering concerns Washington will go ahead with import tariffs and risk a trade war. International benchmark Brent crude was trading 0.5 percent down at $65.27 per barrel by 0519 GMT, having hit a low of $63.21 on Thursday, its lowest since Feb. 15. U.S. West Texas Intermediate was trading 0.4 percent down at $62.11 a barrel, after rising as low as $60.17 on Friday, its weakest since Feb. 15.
Gold prices inched down after rising to their highest in a week as the equities dropped after U.S. President Donald Trump said he would push ahead with severe tariffs on imports, rekindling fears of a potential trade war. Spot gold eased 0.1 percent to $1,333.70 per ounce by 0523 GMT, having hit $1,340.35 an ounce earlier in the session, its highest since Feb. 26. U.S. gold futures for April delivery rose 0.1 percent to $1,336.30 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.884 percent higher by 0.006 bps, while 5-year yield was 0.008 bps up at 2.650 percent.
The Japanese government bonds traded tad lower as investors wait to see a slight upward push in the country’s fourth-quarter gross domestic product (GDP), scheduled to be released later today. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note flattened at 0.75 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.15 percent.
The Australian bonds gained following weaker-than-expected Q4 GDP data, which is weakest in last three quarters. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 2 basis points to 2.815 percent, the yield on the long-term 30-year note dipped 2 basis points to 3.199 percent and the yield on short-term 2-year down 2 basis points to 1.965 percent.
The New Zealand government bonds closed flat after dairy prices slipped further in the latest GlobalDairyTrade (GDT) price auction, held overnight as an influx of supply from the country curbed buying. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 3.04 percent, the yield on 20-year flattened at 3.56 percent and the yield on short-term 2-year closed 1 basis point higher at 1.97 percent.
The Canadian government bond prices were lower across the yield curve, with the two-year down 5 Canadian cents to yield 1.776 percent and the 10-year falling 30 Canadian cents to yield 2.232 percent. On Monday, the 10-year yield touched its lowest intraday in nearly two months 2.145 percent.
