Market Roundup
- China Feb Caixin Mfg PMI Final, 51.6 vs 51.5 last, 51.3 f'cast
- Japan Feb final mfg PMI 54.1, flash 54.0, Dec final 54.0, hiring at 11-year high
- Japan MoF survey – Q4 ’17 CAPEX +4.3% y/y, recurring profits +0.9%, sales +5.9%
- BoJ Gov Kuroda (in Diet) – Wages, prices still weak despite solid economy
- BoJ Policy Board Kataoka (dove) – Warns against premature exit from ease
- Japan's PM climbs down on contentious labour reform after data flaws
- Australia Q4 Capital Expenditure, -0.2% vs 1.0% last (1.9% rvsd), 0.9% f'cast
- Australia Q4 Building Capex, -2.1% vs 1.2% last (1.7% rvsd)
- Australia Q4 Plant/machinery Capex, 2.2% vs 0.7% last (2.1% rvsd)
- Hawk or dove? Fed's Powell showed markets both sides in debut
- Fed's Kashkari: 'I want to see the wage growth'
- U.S. steel, aluminum execs invited to White House for possible announcement
- Merkel ally favours new election if SPD rejects coalition
- EU says to regulate N.Irish trade unless Britain acts fast
- New Zealand Q4 Terms of Trade q/q, 0.8% vs 0.7% last, -0.2% f'cast
Economic Data Ahead
- (0145 ET/0645 GMT) Switzerland Q4 GDP, 0.6% q/q, 1.8% y/y eyed; 0.6%, 1.2% prev
- (0200 ET/0700 GMT) Great Britain Feb Nationwide house prices, 0.2% m/m, 2.6% y/y eyed; 0.6%, 3.2% prev
- (0300 ET/0800 GMT) Spain Q4 GDP, 0.7% q/q, 3.1% y/y eyed; 0.7%, 3.1% prev
- (0315 ET/0815 GMT) Spain Feb Manufacturing PMI, 54.7 eyed, 55.2 prev
- (0350 ET/0850 GMT) France Feb Markit Mfg PMI, 56.1 eyed, 56.1 prev
- (0400 ET/0900 GMT) EU Feb Markit Mfg Final PMI, 58.5 eyed, 58.5 prev
- (0400 ET/0900 GMT) EU Jan Unemployment Rate, 8.6% eyed, 8.7% prev
- (0400 ET/0900 GMT) Germany Feb Markit/BME Mfg PMI, 60.3 eyed, 60.3 prev
- (0430 ET/0930 GMT) Great Britain Feb Markit/CIPS Mfg PMI, 55.0 eyed, 55.3 prev
- (0430 ET/0930 GMT) Great Britain Jan BOE Consumer Credit, 1.400 bln eyed, 1.520 bln prev
Key Events Ahead
- (0200 ET/0700 GMT) Riksbank Governor Stefan Ingves talks about economy and monetary policy in Stockholm
- (0300 ET/0800 GMT) Bank of Spain Governor Luis María Linde speaks at an economy event in Tenerife, Spain
- (0440 ET/0940 GMT) Spain E250-350 mln/E3.5-4.5 bln/E3.5-4.5 bln/E3.5-4.5 bln for 12/13/14/10 year auction
- (0455 ET/0955 GMT) France E8.0-9.0/E8.0-9.0/E8.0-9.0/E8.0-9.0 for 8/10/13/20 year auction
- (0530 ET/1030 GMT) ECB's Daniele Nouy speaks in Delphi
- (0535 ET/1035 GMT) Great Britain Stg 2.75 bln for 5 year auction
- (0630 ET/1130 GMT) Central Bank of Ireland Gov Philip Lane speaks in Brussels
- (0800 ET/1300 GMT) Canadian Finance Minister Bill Morneau speaks in Toronto
- (1000 ET/1500 GMT) Fed Chairman Jerome Powell testifies before the Senate Banking Committee in Washington
FX Beat
DXY: The dollar index rose to a near1-1/2 month high, as Federal Reserve's new chief Jerome Powell's optimism on the U.S. economy suggested the Fed is going to raise interest rates four times in 2018. The greenback against a basket of currencies traded 0.1 percent up at 90.72, having touched a high of 90.74 earlier, its highest since Jan. 18. FxWirePro's Hourly Dollar Strength Index stood at 116.08 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro slumped to a 6-week low after data showed Eurozone inflation slowed to a 14-month low in February, underscoring why the European Central Bank remained cautious about removing stimulus despite growth exceeding expectations. The European currency traded 0.05 percent down at 1.2190, having touched a low of 1.2183, its lowest since Jan. 18. FxWirePro's Hourly Euro Strength Index stood at 36.39 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone Markit manufacturing PMI, ahead of U.S. personal consumption expenditure- price index, unemployment benefit claims and Manufacturing PMI by Markit and ISM. Immediate resistance is located at 1.2273 (5-DMA), a break above targets 1.2347 (21-DMA). On the downside, support is seen at 1.2205 (Feb 9 Low), a break below could drag it lower 1.2165.
USD/JPY: The dollar rose, reversing some of its previous session losses after the Federal Reserve's new chief Jerome Powell struck an optimistic tone on the U.S. economy. The major was trading 0.2 percent up at 106.81, having hit a high of 107.90 last week, its highest since Feb.14. FxWirePro's Hourly Yen Strength Index stood at 57.21 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. personal consumption expenditure- price index, unemployment benefit claims and Manufacturing PMI by Markit and ISM. Immediate resistance is located at 107.90 (Feb 21. High), a break above targets 108.50. On the downside, support is seen at 106.09, a break below could take it lower 105.60.
GBP/USD: Sterling slumped for a fourth straight session below the 1.3800 handle after the EU's chief Brexit negotiator said a transition deal was not guaranteed and the Prime Minister said the EU's draft legal text would undermine Britain. The major traded 0.05 percent down at 1.3753, having hit a low of 1.3743 earlier, it’s lowest since Jan 16. FxWirePro's Hourly Sterling Strength Index stood at -126.08 (Highly Bearish) by 0500 GMT. Investors’ focus will remain on the UK consumer credit data, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3910 (5-DMA), a break above could take it near 1.3971 (21-DMA). On the downside, support is seen at 1.3723, a break below targets 1.3700. Against the euro, the pound was trading 0.05 percent down at 88.64 pence, having hit a low of 88.69 pence, it’s lowest since Feb. 20.
AUD/USD: The Australian dollar tumbled to an over 2-month low, undermined by mixed domestic data and expectations of faster rate hikes in the United States. The Aussie trades 0.4 percent down at 0.7727, having hit a low of 0.7712 earlier; it’s lowest since Dec 26. FxWirePro's Hourly Aussie Strength Index stood at -61.34 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7699 (Dec 22 Low), a break below targets 0.7653 (Dec 21 Low). On the upside, resistance is located at 0.7817 (5-DMA), a break above could take it near 0.7875 (21-DMA).
NZD/USD: The New Zealand dollar declined despite New Zealand terms of trade outpacing expectations to hit an all-time high in the fourth quarter. The Kiwi trades 0.1 percent down at 0.7199, having touched a low of 0.7186, its lowest level since Feb. 8. FxWirePro's Hourly Kiwi Strength Index was at -19.90 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7275 (5-DMA), a break above could take it near 0.7309 (21-DMA). On the downside, support is seen at 0.7144 (Jan. 5 Low), a break below could drag it below 0.7100.
Equities Recap
Asian shares declined after Wall Street recorded its worst monthly performance in two years, while the greenback rallied to multi-week highs on the new Federal Reserve chief Jerome Powell's hawkish-sounding comments.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.4 percent.
Tokyo's Nikkei fell 1.7 percent to 21,695.27 points, Australia's S&P/ASX 200 index plunged 0.7 percent to 5,973.30 points.
Shanghai composite index declined 0.1 percent to 3,256.94 points, while CSI300 index was trading 0.1 percent up at 4,027.62 points.
Hong Kong’s Hang Seng was trading 0.4 percent lower at 30,721.79 points. Taiwan shares shed 0.3 percent to 10,785.79 points.
Commodities Recap
Crude oil prices steadied after falling for two straight sessions as investors drifted away from riskier assets amid volatile equity markets. International benchmark Brent crude was trading 0.05 percent up at $64.66 per barrel by 0505 GMT, having hit a high of $67.86 on Monday, its highest since Feb. 7. U.S. West Texas Intermediate was trading 0.2 percent up at $61.67 a barrel, after rising as high as $64.21 on Monday, its strongest since Feb. 7.
Gold prices slumped, extending losses for the third consecutive session, weighed down as the dollar remained strong following comments from Federal Reserve Chairman Jerome Powell that eased concerns of faster-than-expected hikes in U.S. interest rates. Spot gold was trading 0.3 percent lower at $1,314.34 an ounce at 0509 GMT, having fallen to its lowest level since Feb. 9 at $1,313.36 on Tuesday. U.S. gold futures were down 0.1 percent at $1,316.7 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.866 percent lower by 0.002 bps, while 5-year yield was 0.003 bps down at 2.646 percent.
The Japanese government bonds edged higher following firmness in the U.S. Treasuries. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1/2 basis point to 0.042 percent, the yield on the long-term 30-year note also declined 1/2 basis point to 0.757 percent and the yield on short-term 2-year dipped nearly 1/2 basis point to -0.158 percent.
The Australian government bonds gained after new capital expenditure declined in the last quarter of 2017, which is negative for the economy. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 4 basis points to 2.749 percent, the yield on the long-term 30-year note slid 5-1/2 basis point to 3.369 percent and the yield on short-term 2-year down 1 basis point to 2.000 percent.
