Market Roundup
- Germany's Merkel wins party nod to renew coalition with Social Democrats
- Maintaining customs union will sell UK's Brexit short, trade minister says
- New Zealand Jan Trade balance, -566.0 mln vs 640.0 mln (596.0 mln rvsd)
- New Zealand Jan Trade balance y/y, -3.22 bln vs -2.48 bln (-2.88 bln rvsd)
- New Zealand Jan Imports, 4.87 bln vs 4.91 bln (5.89 bln rvsd)
- New Zealand Jan Exports, 4.31 bln vs 5.55 bln (5.49 bln rvsd)
- Seoul pushes for U.S.-Korea talks, Trump says 'We'll see'
- S.Korea holds rates, resists turning hawkish in the face of Fed risks
- China pushes back against criticism of plan for Xi to stay in power
- Japan EconMin Motegi – Consumer spending will continue to rise
- Strong JPY threat for Japan corporate earnings in ’18 – Nikkei
- Corporate Japan’s overseas retained earnings hit record high – Nikkei
Key Economic Ahead
- (0200 ET/0700 GMT) France Feb Consumer Confidence, 103 eyed, 104 prev
- (0500 ET/1000 GMT) EU Feb Business Climate, 1.47 eyed, 1.54 prev
- (0500 ET/1000 GMT) EU Feb Economic Sentiment, 114.0 eyed, 114.7 prev
- (0500 ET/1000 GMT) EU Feb Industrial Sentiment, 8.0 eyed, 8.8 prev
- (0500 ET/1000 GMT) EU Feb Services Sentiment, 16.3 eyed, 16.7 prev
- (0500 ET/1000 GMT) EU Feb Consumer Confidence final, 0.1 eyed, 1.4 prev
- (0800 ET/1300 GMT) Germany Feb CPI Prelim, 0.5% m/m, 1.5% y/y eyed; -0.7%, 1.6% prev
- (0800 ET/1300 GMT) Germany Feb HICP Prelim, 0.6% m/m, 1.3% y/y eyed; -1.0%, 1.4% prev
Key Events Ahead
- (0340 ET/0840 GMT) ECB's Yves Mersch speaks in Brussels
- (0400 ET/0900 GMT) Riksbank First Deputy Governor Kerstin of Jochnick speaks in Sweden
- (0500 ET/1000 GMT) Bundesbank's Weidmann Presents Institution's Annual Report
- (0515 ET/1015 GMT) Italy E1.25-1.75/E3.0-4.0/E1.5-2.0 bln for 7/5/10 month auction
- (0535 ET/1035 GMT) Belgium E1.5-1.9/E1.5-1.9 bln for 5/7 month auction
- (1000 ET/1500 GMT) Fed Chairman Jerome Powell speaks in Washington
- N/A European Union EUR1 bln 15-year benchmark via CrAgr, Citi, Deutsche, LBBW
FX Beat
DXY: The dollar index slightly nudged down, ahead of Federal Reserve Chairman Jerome Powell's testimony. The greenback against a basket of currencies traded 0.1 percent down at 89.79, having touched a high of 90.24 on Thursday, its highest since Feb. 13. FxWirePro's Hourly Dollar Strength Index stood at -4.49 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, extending previous session gains after Germany's Merkel won party nod to renew coalition with Social Democrats. The European currency traded 0.1 percent up at 1.2324, having touched a low of 1.2265 Thursday, its lowest since Feb. 14. FxWirePro's Hourly Euro Strength Index stood at 85.31 (Slightly Bearish) by 0500 GMT. Investors’ attention will remain on Eurozone sentiment indicator, ahead of U.S. goods trade balance, durable goods orders and housing price index. Immediate resistance is located at 1.2364 (10-DMA), a break above targets 1.2410. On the downside, support is seen at 1.2245 (Feb 7 Low), a break below could drag it lower 1.2205 (Feb 9 Low).
USD/JPY: The dollar slightly edged up, as investors awaited series of economic data this week and Federal Reserve Chairman Jerome Powell's testimony, which could determine the U.S. currency's recovery from a 3-year low. The major was trading 0.05 percent up at 106.92, having hit a high of 107.90 on Wednesday, its highest since Feb.14. FxWirePro's Hourly Yen Strength Index stood at 73.12 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. goods trade balance, durable goods orders and housing price index. 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 extended previous session losses, ahead of Prime Minister Theresa May's speech on Friday, where she will set out her Brexit plan and outline the negotiating position for the UK following Brexit, which begins next March. The major traded 0.05 percent down at 1.3958, having hit a low of 1.3858 on Thursday, it’s lowest since Feb 14. FxWirePro's Hourly Sterling Strength Index stood at -20.32 (Neutral) by 0500 GMT. Investors’ focus will remain on the U.S. fundamental drivers, as UK economic data remains absolutely data empty. Immediate resistance is located at 1.4050, a break above could take it near 1.4104 (Feb 15 High). On the downside, support is seen at 1.3904 (Feb 21 Low), a break below targets 1.3845. Against the euro, the pound was trading 0.2 percent up at 88.30 pence, having hit a high of 87.71 pence on Thursday, it’s highest since Feb. 8.
AUD/USD: The Australian dollar edged down, as investors awaited Fed Chairman Jerome Powell's testimony on the central bank's semi-annual report on monetary policy and the economy later in the day. The Aussie trades 0.1 percent down at 0.7846, having hit a low of 0.7790 Thursday; it’s lowest since Feb 14. FxWirePro's Hourly Aussie Strength Index stood at 96.02 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7825 (Previous Session Low), a break below targets 0.7773. On the upside, resistance is located at 0.7905 (21-DMA), a break above could take it near 0.7966.
NZD/USD: The New Zealand dollar slumped after the country recorded its biggest monthly trade deficit in more than 10 years. The Kiwi trades 0.2 percent down at 0.7284, having touched a low of 0.7270 on Friday, its lowest level since Feb. 14. FxWirePro's Hourly Kiwi Strength Index was at -72.97 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7345, a break above could take it near 0.7410. On the downside, support is seen at 0.7270 (Feb. 23 Low), a break below could drag it below 0.7239.
Equities Recap
Asian shares extended its recovery momentum, while the greenback slightly eased ahead of Federal Reserve Chairman Jerome Powell's highly-anticipated first congressional testimony later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.
Tokyo's Nikkei gained 1.1 percent to 22,389.36 points, Australia's S&P/ASX 200 index surged 0.3 percent to 6,056.90 points and South Korea's KOSPI advanced 0.1 percent to 2,460.75 points.
Shanghai composite index declined 1.2 percent to 3,289.32 points, while CSI300 index was trading 1.4 percent up at 4,059.79 points.
Hong Kong’s Hang Seng was trading 0.2 percent lower at 31,432.99 points. Taiwan shares shed 0.2 percent to 10,815.47 points.
Commodities Recap
Crude oil prices extended gains for the fourth straight session, supported by signs of stronger demand, robust production curbs led by OPEC and a slight fall in U.S. output. International benchmark Brent crude was trading 0.2 percent down at $67.36 per barrel by 0445 GMT, having hit a high of $67.86 the day before, its highest since Feb. 7. U.S. West Texas Intermediate was trading 0.3 percent down at $63.75 a barrel, after rising as high as $64.21 on, its strongest since Feb. 7.
Gold prices declined, reversing some of its previous session gains, while investors awaited U.S. Federal Reserve Chair Jerome Powell's first congressional testimony for clues on the future pace of monetary tightening. Spot gold was 0.1 percent up at $1,331.93 an ounce at 0451 GMT, having fallen to its lowest level since Feb. 14 at $1,320.85 on Thursday. U.S. gold futures were up 0.4 percent at $1,337.7 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.862 percent higher by 0.003 bps, while 5-year yield was 0.003 bps up at 2.608 percent.
The Australian government bond futures were mostly flat too, with the three-year bond contract down half a tick at 97.925 and the 10-year contract steady at 97.2350.
The New Zealand government bonds were unchanged.
The Canadian government bond prices were mixed across the yield curve, with the two-year down 2 Canadian cents to yield 1.794 percent and the 10-year flat to yield 2.247 percent.
