Market Roundup
- Oil rises amid hopes for output cut by U.S. producers
- Gold rises on concerns over U.S. stimulus
- Australian PM Morrison announces A$2.4 bln health package
Economic Data Ahead
- (0300 ET/0800 GMT) Spain Retail Sales (YoY) (Jan)
- (0400 ET/0900 GMT) Italy Producer Price Index (YoY) (Jan)
- (0400 ET/0900 GMT) Italy Producer Price Index (MoM) (Jan)
- (0430 ET/0930 GMT) UK Trade Balance; non-EU (Jan)
- (0430 ET/0930 GMT) UK Index of Services (3M/3M) (Jan)
- (0430 ET/0930 GMT) UK Industrial Production (YoY) (Jan)
- (0430 ET/0930 GMT) UK Manufacturing Production (MoM) (Jan)
- (0430 ET/0930 GMT) UK Industrial Production (MoM) (Jan)
- (0430 ET/0930 GMT) UK Total Trade Balance (Jan)
- (0430 ET/0930 GMT) UK Goods Trade Balance (Jan)
- (0430 ET/0930 GMT) UK Gross Domestic Product (MoM) (Jan)
- (0430 ET/0930 GMT) UK Manufacturing Production (YoY) (Jan)
- N/A NIESR GDP Estimate (3M) (Feb)
Key Events Ahead
- N/A UK Budget Report
FX Beat
DXY: The dollar index eased amid a lack of clarity over the stimulus package proposed by U.S. President Donald Trump to soften the economic impact of the coronavirus epidemic. On Tuesday, Trump said he will ask Congress for a payroll tax cut and other major stimulus moves, but the details remain unclear. The greenback against a basket of currencies traded 0.6 percent down at 95.94, having touched a low of 94.65 on Monday, its lowest since September 27, 2018.
EUR/USD: The euro nudged up after tumbling by more than 1 percent in the prior session on data showing the eurozone economy grew at a slower pace in the fourth quarter. Markets expect the European Central Bank to cut its interest rates by 0.10 percentage on Thursday, although many investors think the ECB has limited room for additional cuts, with interest rates at minus 0.50 percent. The European currency traded 0.6 percent up at 1.1344, having touched a high of 1.1495 on Monday, its highest since January 2019. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the U.S. consumer price index and monthly budget statement. Immediate resistance is located at 1.1400, a break above targets 1.1440. On the downside, support is seen at 1.1240, a break below could drag it below 1.1205.
USD/JPY: The dollar eased as investors worried over how much governments and central banks can do to limit the economic damage from the coronavirus epidemic. On Tuesday, the White House and Congress negotiated measures to bolster the U.S. economy and Americans’ paychecks against the epidemic’s impact, although there was no immediate sign of a deal. The major was trading 1.4 percent down at 104.18, having hit a low of 101.18 on Monday, its lowest since October 2016. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. consumer price index and monthly budget statement. Immediate resistance is located at 106.99 (78.6% retracement of 108.57 and 101.18), a break above targets 107.95. On the downside, support is seen at 103.55, a break below could take it near at 102.92.
GBP/USD: Sterling rebounded from a near 1-week low as investors wait to see the extent of British government’s fiscal response to the virus outbreak, when new finance minister Rishi Sunak is expected to raise spending in his first budget. The major traded 0.2 percent higher at 1.2934, having hit a high of 1.3200 on Monday, it’s highest since Jan. 31. Investors’ attention will remain on the trade negotiations and geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2977 (5-DMA), a break above could take it near 1.3023. On the downside, support is seen at 1.2848, a break below targets 1.2811. Against the euro, the pound was trading 0.4 percent down at 87.73 pence, having hit a low of 87.80 on Tuesday, it’s lowest since Oct. 14.
AUD/USD: The Australian dollar nudged up from a 1-1/2 week low as Australian PM Morrison announced an A$2.4 bln health package to combat the spread of the coronavirus in the country. The A$2.4 billion package proposes setting up fever clinics across the country and offer cost-free facilities for people to consult doctors over video calls. The Aussie trades 0.05 percent up at 0.6506, having hit a low of 0.6314 on Monday, it’s lowest since March 2009. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6544, a break above could take it near 0.6571 (10-DMA). On the downside, support is seen at 0.6462, a break below targets 0.6433.
NZD/USD: The New Zealand dollar surged, retreated from a 1-1/2 week trough hit in the prior session, boosted by New Zealand Electronic Card Retail Sales February data that surprised markets with upbeat releases. The Kiwi trades 0.3 percent up at 0.6286, having touched a low of 0.6008 on Monday, its lowest level since May 2009. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6305, a break above could take it near 0.6343 (21-DMA). On the downside, support is seen at 0.6230 (78.6% retracement of 0.6191 and 0.6372), a break below could drag it below 0.6191.
Equities Recap
Asian shares plunged amid growing scepticism about Washington’s stimulus package to fight the coronavirus outbreak.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.3 percent.
Tokyo's Nikkei declined 2.3 percent to 19,416.06 points, Australia's S&P/ASX 200 index fell 3.6 percent to 5,725.90 points and South Korea's KOSPI slumped 2.8 percent to 1,908.27 points.
Shanghai composite index eased 0.8 percent to 2,972.97 points, while CSI 300 index traded 1.2 percent down at 4,032.73 points.
Hong Kong’s Hang Seng traded 0.6 percent lower at 25,226.44 points. Taiwan shares shed 1.0 percent to 10,893.75 points
Commodities Recap
Crude oil prices surged for a second straight day, lifted by hopes that U.S. producers will cut output, although Saudi Arabia and Russia's price war limited gains. International benchmark Brent crude was trading 1.2 percent higher at $38.37 per barrel by 0458 GMT, having hit a low of $31.26 on Monday, its lowest since Feb. 2016. U.S. West Texas Intermediate was trading 1.1 percent up at $35.07 a barrel, after falling as low as $27.40 on Monday, its lowest since Feb. 2016.
Gold prices surged, reversing some of its previous session losses, as doubts about a stimulus package proposed by U.S. President Donald Trump to soften the economic impact of the coronavirus epidemic weighed on risk sentiment. Spot gold was trading 0.9 percent up at $1,664.27 per ounce by 0511 GMT, having touched a high of $1703.28 on Monday, its highest since December 2012. U.S. gold futures slipped 0.2 percent to $1,656.70.
Treasuries Recap
The benchmark U.S. 10-year Treasury yields were last at 0.7068 percent, more than double Monday’s record low yield of 0.3180 percent.
