Europe Roundup: Euro near two-month highs, European shares rise, Gold retreats, Oil rises $1 as OPEC, allies work on big output cut-March 4th,2020

Market Roundup

• German Jan Retail Sales (MoM) 0.9%,1.0% forecast, -2.0% previous

• German Jan Retail Sales (YoY) 1.8%,1.5% forecast, 1.7% previous

• Swiss Feb CPI (MoM) 0.1%,0.2% forecast, -0.2% previous

• Swiss Feb CPI (YoY) -0.1%,0.1% forecast, 0.2% previous

• Spanish Feb Services PMI 52.1, 52.5 forecast, 52.3 previous

• Italian Feb Composite PMI 50.7, 50.4 previous

•Italian Feb Services PMI 52.1, 51.4 forecast, 51.4 previous

•French Feb Services PMI 52.5, 52.6 forecast, 51.1 previous

• Italian GDP (QoQ) (Q4) -0.3%,-0.3% forecast, 0.1% previous

• EU Feb Markit Composite PMI 51.6, 51.6 forecast, 51.3 previous

• UK Feb Composite PMI 53.0, 53.3 forecast, 53.3 previous

• UK Feb Services PMI 53.2, 53.3 forecast, 53.9 previous

•EU Jan Retail Sales (MoM) 0.6%,0.6% forecast, -1.1% previous

Looking Ahead - Economic Data (GMT)

• US Feb ADP Nonfarm Employment Change 170K forecast, 291K previous

• 13:30 US Labour Productivity (QoQ) (Q4) 0.2% previous

• 13:30 US Feb Market Composite PMI 49.6 forecast, 53.3 previous

• 14:45 US Feb Services PMI 49.4, 53.4 previous

• 15:00 US Feb ISM Non-Manufacturing Employment 53.1 forecast, 53.1 previous

• 15:00 US ISM Non-Manufacturing PMI 54.9 forecast, 55.5 previous

• 15:00 Canada BoC Interest Rate Decision1.75% forecast,1.75% previous

Looking Ahead - Economic events and other releases (GMT)

•18:00 UK BoE MPC Member Broadbent Speaks

•18:30 German Buba President Weidmann Speaks

•22:00 US FOMC Member Bullard Speaks

Currencies Summary

EUR/USD: The euro traded near two-month highs against dollar on Wednesday as traders evaluated the impact of an emergency Fed rate cut a day earlier. The Fed surprised investors by slashing rates by 50 basis points to a target range of 1.00% to 1.25% on Tuesday, two weeksbefore a regularly scheduled policy meeting, in an effort to combat the effects of the coronavirus. The euro rose 0.1% in early London trade to $1.11760, but remained shy of Tuesday's two-month high at $1.12124. Immediate resistance can be seen at 1.1164 (300 DMA), an upside break can trigger rise towards 1.1213 (3rd March high).On the downside, immediate support is seen at 1.1092(100 DMA), a break below could take the pair towards 1.0952 (9 DMA).

GBP/USD: Sterling dipped against the U.S. dollar on Wednesday, as an unexpected rate cut from the U.S. Federal Reserve fuelled expectations the Bank of England could follow suit to protect the economy from the fallout of the coronavirus outbreak.The Fed’s emergency move on Tuesday to shield the world’s largest economy from the impact of the virus failed to comfort markets overnight, and the dollar regained ground against a basket of currencies. Immediate resistance can be seen at 1.2876 (11 DMA), an upside break can trigger rise towards 1.2934 (21 DMA).On the downside, immediate support is seen at 1.2731 (March 3rd low), a break below could take the pair towards 1.2700 (Psychological level).

USD/CHF: The dollar edged higher against the Swiss franc on Wednesday after the U.S. Federal Reserve’s surprise 50 basis point interest rate cut, part of global efforts to contain economic damage from the coronavirus outbreak. The Fed’s first off-schedule move since the 2008 financial crisis came with comments highlighting both the scale of the challenge and the limits of monetary policy. At (GMT 12:51), Greenback gained 0.23% versus the Swiss franc to 0.9579. Immediate resistance can be seen at 0.9607 (5 DMA), an upside break can trigger rise towards 0.9678 (9 DMA).On the downside, immediate support is seen at 0.9515 (Daily low ), a break below could take the pair towards 0.9500 (Psychological level).

USD/JPY: The dollar strengthened against the Japanese yen on Wednesday after a surprise interest rate cut in the United States sent investors rushing back to riskier assets. The Fed dropped its benchmark funds rate half a percentage point overnight, its first off-schedule cut since the depths of the global financial crisis in 2008. Investors awaited the release of the U.S. ISM non-manufacturing PMI data and the Fed’s Beige Book of economic condition later in the day. Strong resistance can be seen at 108.14 (5 DMA), an upside break can trigger rise towards 108.91 (Ichimoku Cloud Base).On the downside, immediate support is seen at 106.84 (March 3rd low), a break below could take the pair towards 106.00 (Psychological level).

Equities Recap

European shares rose on Wednesday as investors hoped the European Central Bank and euro zone governments would green light stimulus measures after the U.S. Federal Reserve cut interest rates in an emergency move.

At (GMT 12:56 ),UK's benchmark FTSE 100 was last trading lower at 1.64 percent, Germany's Dax was up by 1.64percent, France’s CAC was last up by 1.64 percent.

Commodities Recap

Gold edged lower on Wednesday, reversing course from a 3% surge in the previous session following a surprise rate cut by the U.S. Federal Reserve as equities and the dollar regained some ground.

Spot gold slipped 0.2% to $1,636.13 per ounce as of 0838 GMT, having risen as much as 0.7% earlier in the session and registered its biggest one-day percentage gain since 2016 on Tuesday.

Brent oil prices rose on Wednesday on expectations that major producers have moved closer to an agreement to enact deeper output cuts aimed at offsetting the slump in demand caused by the coronavirus outbreak.

Brent crude was up by $1.11, or 2.1%, at $52.97 a barrel at 1234 GMT.U.S. West Texas Intermediate (WTI) was up by 93 cents, or 2%, at $48.11 a barrel.

Treasuries Recap

Government bond yields across the euro area held close to multi-month lows on Wednesday, after an emergency rate cut from the U.S. Federal Reserve failed to ease concern about the impact coronavirus will have on the world economy.

In early trade, Germany’s benchmark 10-year Bund yield was steady around -0.64% — near six-month lows set on Monday at around -0.67%.

Italy’s 10-year bond yield was a touch higher at 1.02 % , having tumbled 17 bps on Tuesday in its biggest one-day drop in five weeks.