Europe Roundup: Euro drops against dollar after bleak German investor survey,European shares slump, Gold rises, Oil drops below $57 on coronavirus impact and OPEC+ delay-February 18th,2020

Market Roundup

• UK Dec Average Earnings Index +Bonus  2.9%,3.0% forecast, 3.2% previous

• UK Jan  Claimant Count Change  5.5K, 22.6K forecast, 2.6K previous

• UK Dec Employment Change 3M/3M (MoM ) 180K, 145K forecast, 208K previous

• German Feb ZEW Current Conditions  -15.7, -10.3 forecast, -9.5  previous

• German Feb ZEW Economic Sentiment  8.7, 21.5 forecast, 26.7 previous

Looking Ahead - Economic Data (GMT)    

 • 13:30 US Feb NY Empire State Manufacturing Index  5.00 forecast, 4.80 previous

• 13:30 Canada Dec Manufacturing Sales (MoM)  0.5% forecast, -0.6% previous

• 15:00 US Feb NAHB Housing Market Index  75 forecast, 75 previous

• 15:20 New Zealand GlobalDairyTrade Price Index -4.7% previous

Looking Ahead - Economic events and other releases  (GMT)    

• No significant events

Fx Beat

EUR/USD: The euro weakened on Tuesday, close to the three-year low it touched on Monday, after a German survey showed a slump in investor confidence, adding to pessimism about the outlook for Europe’s largest economy. The euro has lost 3.4% of its value against the U.S. dollar so far this year, as weak manufacturing and gross domestic product data from Germany suggest the euro zone is more vulnerable than previously thought. The euro was last trading down 0.1% at $1.0814, close to its lowest since April 2017. Immediate resistance can be seen at 1.0861 (5 DMA), an upside break can trigger rise towards 1.0904 (9 DMA).On the downside, immediate support is seen at 1.0812 (Lower BB), a break below could take the pair towards 1.0800 (Psychological level).

GBP/USD: Sterling edged lower against the dollar on Tuesday as conflicting views from Britain and the European Union on how to proceed with trade negotiations weighed on the currency, although strong jobs data limited losses.Prime Minister Boris Johnson’s Europe adviser, David Frost, said on Monday Britain would not be threatened into following EU rules to win a free-trade agreement with the bloc. By 1230 GMT, the pound was 0.1% lower at $1.3001. It was 0.1% lower to the euro, at 83.34 pence Immediate resistance can be seen at 1.3071  (50 DMA), an upside break can trigger rise towards 1.3100 (Psychological level).On the downside, immediate support is seen at 1.2978  (9 DMA), a break below could take the pair towards 1.2920 (100 DMA).

USD/CHF: The dollar strengthened against the Swiss franc on Tuesday, after Apple Inc said it would miss its March quarter revenue guidance as the coronavirus slowed production and weakened demand in China. The warning from the most valuable U.S. company sobered investor optimism that stimulus from China and other countries would protect the global economy from the effects of the epidemic. At (GMT 13:25), Greenback gained 0.12% versus the Swiss franc to 0.9820. Immediate resistance can be seen at 0.9837 (100 DMA), an upside break can trigger rise towards 0.9878 (Dec 12th high).On the downside, immediate support is seen at 0.9793 (5 DMA), a break below could take the pair towards 0.9757 (11 DMA).

USD/JPY: The dollar was little changed against the Japanese yen on Tuesday, as increasing financial fallout of the virus outbreak in China and chances of central banks opting for monetary easing as a measure to shore up regional economies weighed on investor sentiment.  With death toll climbing to nearly 1,900 in China, disruptions and delays in operations in the mainland owing to the epidemic and its impact remained a concern for businesses. Strong resistance can be seen at 110.14 (12th Feb high), an upside break can trigger rise towards 110.38 (Higher BB).On the downside, immediate support is seen at 109.68 (11 DMA), a break below could take the pair towards 109.31 (50 DMA). 

Equities Recap

European shares dropped on Tuesday as a revenue warning from Apple Inc sent shockwaves through the tech sector, hammering iPhone parts makers and underlining the impact of the coronavirus outbreak on global supply chains.

At (GMT 13:00),UK's benchmark FTSE 100 was last trading down at 0.85 percent, Germany's Dax was down by 0.76 percent, France’s CAC finished was down by 0.47 percent.

Commodities Recap

Gold rose to a two-week high on Tuesday, spurred by demand for safe-havens after iPhone maker Apple Inc’s revenue warning underscored the financial fallout of the coronavirus epidemic in China.

Spot gold was up 0.4% at $1,586.32 per ounce as of 0246 GMT. Earlier in the session, prices touched their highest since Feb. 3 at $1,586.90.U.S. gold futures inched up by 0.2% to $1,589.30.

Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on oil demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Brent crude  was down $1.02 at $56.65 a barrel by 1100 GMT after rallying in the previous five sessions. U.S. West Texas Intermediate crude  fell 82 cents to $51.23.

Treasuries Recap

U.S.: The U.S. Treasuries gained during Tuesday’s afternoon session after returning from a long weekend, only to witness the country’s producer price index (PPI) for the month of January, and the Federal Reserve’s monetary policy meeting minutes for the last month, both scheduled for February 19 by 13:30GMT and 19:00GMT respectively. The yield on the benchmark 10-year Treasury yield slumped over 4 basis points to 1.546 percent, the super-long 30-year bond yield plunged 5 basis points to trade at 1.992 percent and the yield on the short-term 2-year lost nearly 3 basis points to 1.397 percent.

UK: The United Kingdom’s jumped during European trading hours Tuesday even as the country’s labour market remained solid and promising, with the unemployment rate remaining at a 45-year low. The yield on the benchmark 10-year gilts, remained flat at 0.625 percent, the 30-year yield remained tad down at 1.107 percent and the yield on the short-term 2-year remained range-bound at 0.532 percent.

EUR: The German bunds surged during afternoon session Tuesday after the country’s ZEW economic sentiment for the month of February, released today, disappointed market sentiments, while the index for current conditions worsened beyond expectations. The German 10-year bond yield, which move inversely to its price, slumped over 3 basis points to 0.430 percent, the long-term 30-year yield plunged 4 basis points to 0.082 percent and the yield on short-term 2-year remained 1 basis point down at -0.661 percent.