Market Roundup
- Japan FinMin Aso – Timing of Toshiba earnings will depend on any possible US Westinghouse bankruptcy filing, should be decided by month-end – Reuters.
- Greater profit growth expected for Japan Inc in fiscal ’17 – Nikkei.
- Japan - No barriers to auto imports after US fires first trade salvo.
- BoJ reduces purchases of 1-3 year JGBs to Y300 bln from Y320 bln – Reuters.
- China PBOC Gov Zhou – Neutral monetary policy setting will help supply-side reforms, will strengthen controls on asset management risks, falls in FX reserves normal, won’t overreact, stable CNY best, to stay so – Reuters.
- PBOC/SAFE Pan – China opening up bond market to foreign investors – Reuters.
- PBOC DepGov Yi – Corporate debt levels excessively high – Reuters.
- DepGov Yi – Won’t devalue CNY to stimulate exports – China Economic Daily.
- Foreign CB US debt holdings +$6.950 billion to $3.182 trillion March 8 week, Treasury holdings +$6.963 billion to $2.853 trillion, agencies -$166 million to $266.505 billion.
- NY Fed – FX swaps with foreign CBs $491 million Mar 8 week, BoJ $1 million, rest ECB.
- Lipper – US-based stock funds attract $8.5 billion latest week, cash out of junk bond funds.
- IMF Lagarde – Exit from EUR would make France poorer – Le Parisien.
- Australia Jan owner-occupied housing finance +0.5% m/m, -1.0% eyed, Dec rev +0.2%, value of investment housing finance +4.2%.
- New Zealand Feb electronic card retail sales -0.6% m/m, still +2.6% y/y.
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Imports MM SA
- (0200 ET/0700 GMT) Germany Trade Balance SA
- (0200 ET/0700 GMT) Germany Wholesale Price Index
- (0200 ET/0700 GMT) Norway CPI
- (0200 ET/0700 GMT) Norway Core Inflation
- (0200 ET/0700 GMT) Norway PPI
- (0245 ET/0745 GMT) France Industrial Output
- (0300 ET/0800 GMT) Spain Retail Sales YY
- (0300 ET/0800 GMT) Denmark CPI YY
- (0430 ET/0930 GMT) Great Britain O/P Vol
- (0430 ET/0930 GMT) Great Britain Industrial Output
- (0430 ET/0930 GMT) Great Britain Manufacturing Output
- (0430 ET/0930 GMT) Great Britain Goods Trade Bal Non- EU
- (0430 ET/0930 GMT) Great Britain Goods Trade Bal GBP
Key Events Ahead
- N/A China National People’s Congress.
- N/A EU Summit in Brussels (final day).
- (0500 ET/1000 GMT) Italy E6.5 bln 12-month BOT auction.
- (0600 ET/1100 GMT) UK DMO GBP0.5/0.5/1.0 bln 1/3/6-month treasury bill auctions.
FX Beat
DXY: The dollar rallied to six-week highs versus the yen as investors await monthly nonfarm payrolls release that would give the Fed more reason to raise interest rates at its March 14-15 meeting. The greenback against a basket of currencies traded 0.1 percent down at 101.88, having hit a high of 102.25 in the previous session. FxWirePro's Hourly Dollar Strength Index stood at 39.12 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, extending previous session gains after the European Central Bank offered a slightly less dovish tone that supported the view that the eurozone economy was improving. The ECB President Mario Draghi stated that additional policy measures will probably not be required because the sense of urgency to stimulate growth and inflation is not there. The European currency traded 0.2 percent higher at 1.0597, having hit a high of 1.0615 the day before. FxWirePro's Hourly Euro Strength Index stood at 114.97 (Highly Bullish) by 0400 GMT. Investors’ will continue to digest ECB head Draghi's comments, ahead of the U.S. economic fundamentals. Immediate resistance is located at 1.0615 (78.6 % retracement of 1.0640 and 1.0525), a break above targets 1.0640. On the downside, support is seen at 1.0566 (10-DMA), a break below could drag it near 1.0510.
USD/JPY: The dollar rallied to a 6-week high above the 115.00 handle, as investors await the U.S. job data due later in the day that is likely to reinforce expectations of a Federal Reserve interest rate hike next week. Investors now price in more than a 90 percent chance of an interest rate hike after Wednesday's private-sector payrolls report showed employers added 298,000 jobs in February, surpassing estimates of 190,000 jobs. The pair traded 0.3 percent up at 115.25, hovering towards a high of 115.37, its highest since Feb. 15. FxWirePro's Hourly Yen Strength Index stood at -105.42 (Highly Bearish) by 0400 GMT. Investors’ will continue to track overall market sentiment, ahead of the U.S. nonfarm payroll, unemployment rate and average hourly earning. Immediate resistance is located at 115.40, a break above targets 115.75/116.00. On the downside, support is seen at 114.85, a break below could take it lower 114.23 (5-DMA).
GBP/USD: Sterling declined, extending losses for the fifth consecutive session after Scottish First Minister Nicola Sturgeon stated that Scotland could hold a second referendum on independence in the autumn of 2018, just months before Britain is due to leave the European Union. The major trades 0.06 percent lower at 1.2157, having hit a low of 1.2133 in the previous session, its weakest since Jan. 17. FxWirePro's Hourly Sterling Strength Index stood at -10.80 (Neutral) by 0400 GMT. Investors’ focus will remain on UK consumer inflation expectations, trade balance, industrial and manufacturing production figures ahead of series of U.S. economic data. Immediate resistance is located at 1.2200, a break above could take it near 1.2236 (38.2 % retracement of 1.2569 and 1.2133). On the downside, support is seen at 1.2133 (Previous Session Low), a break below targets 1.2100. Against the euro, the pound trades flat at 87.17 pence, having hit a fresh 7-week low of 87.18 earlier.
AUD/USD: The Australian dollar steadied above the 0.7500 handle after declining to a 7-week low in the previous session, amid a risk-on rally in the Asian equities. However, increased cautiousness ahead of the US payrolls data and weakness in gold and copper prices dampened the sentiment around the Aussie. The major trades 0.25 percent up at 0.7521, having touched a low of 0.7491 in the previous session, it’s lowest since Jan. 17. FxWirePro's Hourly Aussie Strength Index stood at 11.63 (Neutral) by 0500 GMT. Markets will continue to track overall market sentiment, ahead of the U.S. payrolls data. Immediate support is seen at 0.7480, a break below could drag it near 0.7458. On the upside, resistance is located at 0.7545 (38.2 % retracement of 0.7632 and 0.7491), a break above targets 0.7561 (50.0 % retrace).
NZD/USD: The New Zealand dollar stood firm after falling in the previous ten sessions, ahead of U.S. nonfarm payrolls report due later in the day. Moreover, divergent monetary policy outlooks between the Federal Reserve and the RBNZ continued to hurt the Kiwi bulls' sentiment. The pair trades 0.2 percent higher at 0.6910, hovering away from a low of 0.6890 hit in the prior session, it’s lowest since Jan. 4. FxWirePro's Hourly Kiwi Strength Index was at -102.81 (Highly Bearish) by 0500 GMT. Investors’ will continue to track board based market sentiment, ahead of the U.S. macroeconomic fundamental drivers for further momentum. Immediate resistance is located at 0.6950, a break above could take it near 0.6973 (23.6% retrace of 0.7244 and 0.6890). On the downside, support is seen at 0.6878 (Dec 27 Low), a break below could drag it near 0.6850.
Equities Recap
Asian shares gained following a modest bounce in Wall Street overnight, while investors await highly influential U.S. non-farm payrolls report due later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2 percent.
Tokyo's Nikkei gained 1.38 percent to 19,584.68 points, Australia's S&P/ASX 200 index rose 0.54 percent to 5,772.20 points and South Korea's KOSPI was trading 0.29 percent down at 2,097.14 points.
Shanghai composite index edged up 0.02 percent to 3,217.26 points, while CSI300 index was trading 0.1 percent up at 3,430.44 points.
Hong Kong’s Hang Seng was trading 0.14 percent higher at 23,534.68 points. Taiwan shares shed 0.3 percent at 9,627.89 points.
Commodities Recap
Crude prices steadied after declining to their lowest in more than three months the session before, weighed down by concerns that a global supply glut is growing persistently. International benchmark Brent crude was trading 0.06 percent up at $52.48 per barrel by 0411 GMT, having hit a low of $51.49 on Thursday, its lowest since Dec. 1. U.S. West Texas Intermediate crude trades 0.07 percent up at $49.61 a barrel, after falling to a trough of $48.58 the day before, its weakest since Nov. 15.
Gold prices slumped, breaching the key level of $1,200 an ounce to hit their lowest in over five weeks, as the dollar strengthened ahead of U.S. jobs data due later in the day. Spot gold was down 0.2 percent at $1,198.17 per ounce at 0415 GMT, after hitting its weakest since Jan. 31 at $1,197.51 earlier in the session and was set for a weekly loss of about 2.8 percent. U.S. gold futures fell 0.4 percent to $1,198.10 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.6129 percent higher by 0.015 bps, while 5-year yield was 0.018 bps up at 2.1434 percent.
The Australian bonds dived Friday as investors cashed in profits on the last day of the week amid a mild rise in equities. The yield on the benchmark 10-year Treasury note jumped 4 basis points to 2.98 percent, the yield on the 15-year note climbed 3-1/2 basis points to 3.37 percent and the yield on short-term 3-year traded 1-1/2 basis points higher at 2.14 percent.
The New Zealand government bonds closed flat as investors remained sidelined in a mild trading session that witnessed data of little economic significance. The yield on the benchmark 10-year bond fell 1 basis point to 3.42 percent at the time of closing, the yield on 7-year note also slipped nearly 1 basis point to 2.97 percent while the yield on short-term 5-year note traded 1 basis point higher at 2.23 percent.
The Canadian government bond prices were lower across a steeper yield curve, with the 2-year off 1 Canadian cent to yield 0.826 percent and the 10-year falling 27 Canadian cents to yield 1.809 percent.
