Market Roundup
- Trump says 'signing summit' with Xi for U.S.-China deal possible soon
- U.S. lawmakers, industry fret over Trump's China trade deal eagerness
- N.Korea's Kim arrives to warm welcome in Vietnam; Trump on the way
- Fed's Powell heads to U.S. Congress amid shifting landscape
- Fed's Clarida says U.S. economy in a good place
- UK PM May considers delaying Brexit deadline -Bloomberg
- Pakistan says Indian aircraft "released a payload" after crossing frontier, no casualties
- RBNZ capital hike proposal to have minor impact on bank lending rates, economy-dep gov
- Venezuela hit with new U.S. sanctions after clashes over food aid on border
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Mar GfK Consumer Sentiment, 10.8 f’cast, 10.8 prev
- (0245 ET/0745 GMT) France Feb Consumer Confidence, 92 f’cast, 91 prev
- (0430 ET/0930 GMT) Great Britain Jan UK Finance Mortgage Apps, 38.779k prev
Key Events Ahead
- (0230 ET/0730 GMT) Spanish Economy Minister Nadia Calvino and Bank of Spain Governor Pablo Hernandez de Cos attend economy event in Madrid
- (0830 ET/1330 GMT) Philadelphia Fed issues Nonmanufacturing Business Outlook Survey for February in Philadelphia
- (0930 ET/1430 GMT) ECB’s Yves Mersch speaks at a conference in Brussels
- (1000 ET/1500 GMT) Fed Chairman Jerome Powell to testify on U.S. monetary policy and the economy before the Senate Banking Committee in Washington
FX Beat
DXY: The dollar index eased to a 6-day low, as investors now await testimony from U.S. Federal Reserve Chairman Jerome Powell before a U.S. Senate committee after the central bank shifted to a more cautious stance on further interest rate hikes last month. The greenback against a basket of currencies trades 0.05 percent down at 96.38, having touched a low of 96.32, its lowest since February 20. FxWirePro's Hourly Dollar Strength Index stood at -15.25 (Neutral) by 0500 GMT.
EUR/USD: The euro consolidated within narrow ranges, as investors awaited the German Gfk consumer confidence that could provide further clues on the strength of the economy. The European currency traded flat at 1.1358, having touched a high of 1.1371 on Wednesday, its highest since Feb. 6. FxWirePro's Hourly Euro Strength Index stood at 66.83 (Bearish) by 0500 GMT. Investors’ attention will remain on German Gfk consumer confidence survey, ahead of U.S. housing start, building permits, housing price index, consumer confidence and Fed Chair Powel's testimony. Immediate resistance is located at 1.1394 (Jan. 23 High), a break above targets 1.1417 (Jan. 25 High). On the downside, support is seen at 1.1318 (10-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar declined, retreating from a 2-month peak touched in the previous session, as investors cautiously waited to see if Washington and Beijing can secure a trade deal. The major was trading 0.05 percent down at 110.66, having hit a high of 111.23 on Monday, its highest since December 27. FxWirePro's Hourly Yen Strength Index stood at -71.24 (Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. housing start, building permits, housing price index, consumer confidence and Fed Chair Powel's testimony. Immediate resistance is located at 111.19 (Dec. 24 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 110.25 (Feb.15 Low), a break below could take it lower at 109.60 (Feb. 7 Low).
GBP/USD: Sterling rallied to an over 4-week peak after Bloomberg News reported that British Prime Minister Theresa May was considering delaying the March 29 deadline for U.K.'s exit from the European Union. The major traded 0.2 percent up at 1.3124, having hit a high of 1.3149 earlier; it’s highest since January 31. FxWirePro's Hourly Sterling Strength Index stood at 49.85 (Neutral) 0500 GMT. Immediate resistance is located at 1.3160 (January 31 High), a break above could take it near 1.3199 (January 29High). On the downside, support is seen at 1.3050 (February 25 Low), a break below targets 1.2991 (21-DMA). Against the euro, the pound was trading 0.2 percent up at 86.52 pence, having hit a high of 86.35, it’s highest since Jan. 28.
AUD/USD: The Australian dollar eased as the Reserve Bank of Australia has taken a dovish turn on policy, stating that economic risks were now more balanced and the next move in interest rates might be a cut rather than a hike. The Aussie trades 0.2 percent down at 0.7155, having hit a high of 0.7206 on Thursday; it’s highest since February 6. FxWirePro's Hourly Aussie Strength Index stood at 44.52 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7103 (Feb.19 Low), a break below targets 0.7060 (Feb.8 Low). On the upside, resistance is located at 0.7206 (Feb. 21 High), a break above could take it near 0.7245 (Feb. 6 High).
NZD/USD: The New Zealand dollar steadied after rising to a near 3-week high in the previous session as signs of progress in the U.S.-China trade dispute were taken as a positive for the Chinese economy and commodity prices. The Kiwi trades flat at 0.6881, having touched a high of 0.6901 on Monday, its highest level Feb. 6. FxWirePro's Hourly Kiwi Strength Index was at 82.33 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6941 (Feb. 1 High), a break above could take it near 0.6969 (Dec. 4 High). On the downside, support is seen at 0.6853 (5-DMA), a break below could drag it below 0.6809 (Feb. 15 Low).
Equities Recap
Asian shares slumped from a 5-month peak as investors waited to see if Washington and Beijing can clinch a trade deal.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.5 percent.
Tokyo's Nikkei fell 0.4 percent to 21,449.39 points, Australia's S&P/ASX 200 index declined 0.9 percent to 6,128.40 points and South Korea's KOSPI eased 0.2 percent to 2,229.06 points.
Shanghai composite index rose 0.7 percent to 2,984.12 points, while CSI300 index traded 0.2 percent up at 3,736.86 points.
Hong Kong’s Hang Seng traded 0.6 percent lower at 28,793.036 points. Taiwan shares added 0.05 percent to 10,391.55 points.
Commodities Recap
Crude oil prices declined, extending losses from the previous session after U.S. President Donald Trump called on OPEC to ease its efforts to boost the market. International benchmark Brent crude was trading 0.4 percent down at $64.50 per barrel by 0435 GMT, having hit a high of $67.70 on Friday, its highest since November 19. U.S. West Texas Intermediate was trading 0.5 percent lower at $55.10 a barrel, after rising as high as $57.79 on Friday, its highest since the November 16.
Gold prices steadied, as the greenback eased after Fed policymakers indicated they favour patience before raising key lending rates again due to recent signs of slowing economic growth. Spot gold was 0.1 percent up at $1,329.01 per ounce at 0458 GMT, having touched a high of $1,346.61 per ounce on Wednesday, its highest level since April 20. while U.S. gold futures were steady at $1,329.9 per ounce.
Treasuries Recap
The Japanese government bonds remained tad lower at the end of Asian session Tuesday, as investors remained side-lined in a muted trading session that witnessed data of little economic significance amid growing hopes of a positive U.S.-China trade deal shortly. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped nearly 3 basis points to -0.027 percent, the yield on the long-term 30-year jumped 1-1/2 basis points to 0.596 percent and the yield on short-term 2-year plunged 16-1/2 basis points to -0.164 percent.
The Australian government bond yields gained during Asian trading session tracking a similar movement in the United States counterpart as optimism continued to grow on hopes of U.S.-China trade agreement, after President Donald Trump stated an extension of the March 1 deadline, in lieu of the ongoing progress and a better trade deal. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1-1/2 basis points to 2.092 percent, the yield on the long-term 30-year bond edged 1 basis point higher to 2.644 percent and the yield on short-term 2-year traded tad higher at 1.737 percent.
The yields on New Zealand government bonds edged up around 1 basis point across the curve.
The Canadian government bond prices edged lower on Monday across much of the yield curve. The two-year fell 1 Canadian cent to yield 1.783 percent and the 10-year declined 5 Canadian cents to yield 1.897 percent. The gap between Canada's 2-year yield and its U.S. equivalent widened by 1.7 basis points to a spread of 72.9 basis points in favor of the U.S. bond.
