Market Roundup
- Fed lifts rates, signals tougher stance as economy strengthens
- Trump set for China tariff announcement on Thursday, trade war fears grow
- U.S. Treasury has prepared China investment restriction options -Mnuchin
- China calls U.S. repeat abuser of world trade rules
- China partially wins WTO case over Obama-era U.S. tariffs
- China raises a key market interest rate, following Fed's move
- U.S. Congress unveils $1.3 trillion spending bill as shutdown looms
- Republican concedes to Democrat in close U.S. House race in Pennsylvania
- Zuckerberg apologizes for Facebook mistakes with user data, vows curbs
- Bank of England expected to keep path clear for May rate rise
- EU leaders to weigh how to talk trade with Trump as tariffs loom
- RBNZ holds rates in last meeting with pure inflation target mandate
- Australia keeps adding jobs, still can't satisfy jobseekers
Economic Data Ahead
- (0345 ET/0745 GMT) France Mar Business Climate, 111 eyed; 112 last
- (0400 ET/0800 GMT) France Mar Markit Mfg Flash PMI, 55.5 eyed; 55.9 last
- (0400 ET/0800 GMT) France Mar Markit Serv Flash PMI, 57.0 eyed; 57.4 last
- (0400 ET/0800 GMT) France Mar Markit Comp Flash PMI, 57.0 eyed; 57.3 last
- (0430 ET/0830 GMT) Germany Mar Markit Comp Flash PMI, 57.0 eyed; 57.6 last
- (0430 ET/0830 GMT) Germany Mar Markit Mfg Flash PMI, 59.8 eyed; 60.6 last
- (0430 ET/0830 GMT) Germany Mar Markit Service Flash PMI, 55.0 eyed; 55.3 last
- (0500 ET/0900 GMT) Germany Mar Ifo Business Climate, 114.8 eyed; 115.4 last
- (0530 ET/0930 GMT) Great Britain Feb Retail Sales MM, 0.4% eyed; 0.1% last
Key Events Ahead
- N/A ECB holds general council meeting in Frankfurt, Germany
- N/A Riksbank Deputy Governor Martin Floden holds a breakfast presentation in Karlstad about the economic situation and current monetary policy in Karlstad, Sweden
- (0430 ET ET/0830 GMT) ECB’s Sabine Lautenschlaeger participates in a panel discussion at the 9th annual EFR Stakeholder Round Table on "Financial Fragmentation or Integration" hosted by the ING Group in Brussels, Belgium
- (0500 ET/0900 GMT) Introductory remarks by ECB’s Daniele Nouy at "Joint Governance Conference: Governance expectations for banks in a changing financial environment" organised by the ECB in Frankfurt, Germany
- (0800 ET/1200 GMT) Bank of England announces its interest rate decision and publishes the minutes of the meeting
- (1215 ET/1615 GMT) Norway Central Bank Governor Oystein Olsen gives a speech in Washington D.C.
- (1300 ET/1700 GMT) Bank of England Deputy Governor Dave Ramsden gives speech at HM Treasury annual fintech conference in London
- (1445 ET/1845 GMT) Bank of Canada Senior Deputy Governor Carolyn Wilkins speaks at Rotman School of Management in Toronto, Canada
FX Beat
DXY: The dollar index slumped to a 2-week low as the Fed raised rates by 25 basis points to 1.75 percent and forecast at least two more hikes for 2018. The greenback against a basket of currencies 0.1 percent down at 89.64, having touched a low of 89.48 on Wednesday, its lowest since Mar. 8. FxWirePro's Hourly Dollar Strength Index stood at -66.61 (Bearish) by 0500 GMT.
EUR/USD: The euro rose to a 1-week high ahead of a slew of Markit flash PMIs, German IFO business climate indicators, and the European Central Bank's Vice-Chair Sabine Lautenschläger speech. The German manufacturing PMI is expected to come in at 59.8 versus the previous 60.6, the Services PMI is forecast at 55.0 versus the previous 55.3, and the PMI Composite is forecast at 57.0 versus prior 57.6. The European currency traded 0.2 percent up at 1.2362, having touched a high of 1.2369 earlier, its highest since Mar. 15. FxWirePro's Hourly Euro Strength Index stood at 66.83 (Bullish) by 0400 GMT. Investors’ attention will remain on German IFO Expectations and Business Climate, ECB Vice-Chair Sabine Lautenschläger's speech and Markit flash PMIs, ahead of the U.S. unemployment benefit claims, housing price index and Markit PMIs. Immediate resistance is located at 1.2383 (Mar 15 High), a break above targets 1.2412 (Mar. 14 High). On the downside, support is seen at 1.2301 (5-DMA), a break below could drag it lower 1.2251 (Mar. 2 Low).
USD/JPY: The dollar fell to a 2-week low after the Federal Reserve maintained the view that it would raise interest rate three times in 2018 instead of four. The major was trading 0.2 percent down at 105.80, having hit a low of 105.57 earlier, its lowest since Mar. 7. FxWirePro's Hourly Yen Strength Index stood at -16.85 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, housing price index and Markit PMIs'. Immediate resistance is located at 106.74 (Mar. 14 Low), a break above targets 106.97 (Mar 12 High). On the downside, support is seen at 105.45 (Mar. 7 Low), a break below could take it lower 105.25 (Mar. 2 Low).
GBP/USD: Sterling rose to a fresh 7-week high after data showed British workers' pay rose at the fastest pace in nearly 2-1/2 years in the three months to January, cementing expectations the Bank of England will hike interest rates in May. The major traded 0.1 percent up at 1.4156, having hit a high of 1.4170 earlier, it’s highest since Feb. 2. FxWirePro's Hourly Sterling Strength Index stood at 67.29 (Bullish) by 0400 GMT. Investors’ focus will remain on UK retail sales and BoE interest rate decision, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.4233 (Jan 31 High), a break above could take it near 1.4278. On the downside, support is seen at 1.4008 (5-DMA), a break below targets 1.3952 (10-DMA). Against the euro, the pound was trading 0.1 percent up at 87.21 pence, having hit a high of 87.07 pence the day before, it’s highest since Jan 25.
AUD/USD: The Australian dollar declined after data from the Australian Bureau of Statistics showed 17,500 net new jobs were added in February, just under forecasts of 20,000, while unemployment rate nudged up to 5.6 percent, from 5.5 percent in January. The Aussie trades 0.2 percent down at 0.7748, having hit a low of 0.7672 the day before; it’s lowest since Dec. 21. FxWirePro's Hourly Aussie Strength Index stood at -13.14 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7708 (Mar. 16 Low), a break below targets 0.7653 (Dec. 21 Low). On the upside, resistance is located at 0.7796 (50.0% retracement of 0.7916 and 0.7672), a break above could take it near 0.7825 (38.2% retracement).
NZD/USD: The New Zealand dollar steadied after falling to a 1-1/2 month low in the previous session, as the Reserve Bank of New Zealand left the OCR unchanged at 1.75 percent, and continued to signal that it expects the OCR to remain on hold for an extended period. The Kiwi trades 0.05 percent up at 0.7227, having touched a low of 0.7153 the day before, its lowest level since Jan. 10. FxWirePro's Hourly Kiwi Strength Index was at -55.17 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7254 (50.0% retracement of 0.7354 and 0.7153), a break above could take it near 0.7280 (Mar 16 High). On the downside, support is seen at 0.7208 (Mar. 16 Low), a break below could drag it below 0.7176 (Mar 20 Low).
Equities Recap
Asian shares tumbled, while the greenback slipped after the Federal Reserve did not signal a faster pace of rate hikes this year while concerns about an upcoming announcement on tariffs from U.S. President Donald Trump hurt market sentiment.
MSCI's broadest index of Asia-Pacific shares outside Japan plunged 0.1 percent.
Tokyo's Nikkei rose 0.9 percent to 21,591.99 points, Australia's S&P/ASX 200 index eased 0.3 percent to 5,937.20 points and South Korea's KOSPI surged 0.3 percent to 2,492.50 points.
Shanghai composite index declined 0.5 percent to 3,265.84 points, while CSI300 index was trading 0.8 percent down at 4,030.67 points.
Hong Kong’s Hang Seng was trading 0.4 percent lower at 31,270.74 points. Taiwan shares shed 0.05 percent to 11,005.84 points.
Commodities Recap
Crude oil prices declined, after rising to an over 7-week high in the previous session on the back of a surprise draw on U.S. crude inventories. International benchmark Brent crude was trading 0.4 percent down at $69.45 per barrel by 0440 GMT, having hit a high of $69.82 on Wednesday, its highest since Feb. 2. U.S. West Texas Intermediate was trading 0.4 percent down at $65.19 a barrel, after rising as high as $65.69 earlier, its strongest since Feb 2.
Gold prices edged lower after rising to a 2-week peak in the previous session on the back of a weaker dollar after the U.S. Federal Reserve disappointed investors expecting more hawkish comments on interest rate rises. Spot gold declined 0.2 percent to $1,330.02 per ounce at 0445 GMT, having hit a high of $1,336.49 an ounce on Wednesday, its highest since Mar. 7. U.S. gold futures for April delivery rose 0.9 percent to $1,333.70 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.875 percent lower by 0.031 bps, while 5-year yield was 0.026 bps low at 2.672 percent.
The Japanese government bonds gained after manufacturing PMI declined to nine-month low for the month of February. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1/2 basis point to 0.036 percent, the yield on the long-term 30-year note slid 1/2 basis point to 0.755 percent and the yield on short-term 2-year down 1/2 basis point lower at -0.15 percent.
The Australian government bonds gained after unemployment rate for the month of February ditches market expectations, rising to 5.6 percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.700 percent, the yield on the long-term 30-year note traded 2 basis points lower at 3.278 percent and the yield on short-term 2-year slid 1/2 basis point to 2.038 percent.
The Canadian government bond prices were lower across the yield curve, with the two-year down 7.5 Canadian cents to yield 1.867 percent and the 10-year falling 33 Canadian cents to yield 2.255 percent. The 2-year yield touched its highest intraday since June 2011 at 1.909 percent.
