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Europe Roundup: Sterling eases ahead of parliamentary vote on Brexit delay, euro slumps as Ifo slashes German growth projections, European shares at 5-month peak - Thursday, March 19th, 2019 

Market Roundup

  • EUR/USD -0.16%, USD/JPY 0.44%, GBP/USD -0.67%, EUR/GBP 0.53%
  • DXY 0.19%, DAX 0.18%, FTSE 0.38%, Brent 0%, Gold -0.84%
  • British parliament to vote on Brexit delay, PM seeks to revive her deal
  • U.S. Senate poised to pass bill ending Trump's border emergency; veto expected
  • China And U.S. To Push Back Trump-Xi Meeting To At Least April - Bloomberg
  • Ifo institute cuts German 2019 GDP growth forecast to 0.6 pct
  • UK Feb RICS Housing Survey, -28, -24 f'cast, -22 prev
  • Germany Feb HICP Final YY, 1.7%, 1.7% f'cast, 1.7% prev
  • Germany Feb HICP Final MM, 0.5%, 0.5% f'cast, 0.5% prev
  • Germany Feb CPI Final YY, 1.5%, 1.6% f'cast, 1.6% prev
  • Germany Feb CPI Final MM, 0.4%, 0.5% f'cast, 0.5% prev
  • France Feb CPI (EU Norm) Final MM, 0.1%, 0.1% f'cast, 0.1% prev
  • France Feb CPI (EU Norm) Final YY, 1.6%, 1.5% f'cast, 1.5% prev

Economic Data Ahead

  • (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 2,000 to a seasonally adjusted 225,000 for the week ended Mar. 4, while continuing claims for the week ended Mar. 1 is expected to rise to 1.775 million from a previous reading of 1.755 million.
  • (0830 ET/1230 GMT) The U.S. Labor Department publishes the import and export prices index for the month of February. The import prices are likely to have gained 0.3 percent after slumping 0.5 percent in January, while exports are expected to have edged up 0.1 percent after falling 0.6 percent in the prior month.
  • (0830 ET/1230 GMT) The Statistics Canada is likely to report that the New Housing Price Index (NHPI) remained flat in January, after being unchanged in December.
  • (1000 ET/1400 GMT) The U.S. new single-family home sales are expected to have declined 0.9 percent to a seasonally adjusted annual rate of 620,000 units in January. New home sales rose 3.7 percent in December to a seasonally adjusted annual rate of 621,000 units.
  • (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending March 4.

Key Events Ahead

  • N/A Britain's Parliament to vote on delaying March 29 Brexit date
  • N/A U.S. Treasury Secretary Steven Mnuchin testifies at U.S. House Ways and Means Committee hearing on President Donald Trump's proposed budget.
  • (1200 ET/1600 GMT) Irish Central Bank Governor Philip Lane addresses students in Dublin
  • (1905 ET/2305 GMT) BOC senior deputy governor Carolyn Wilkins speaks in Vancouver

FX Beat

DXY: The dollar index bounced back from an over 1-week low after Bloomberg reported that a meeting between U.S. President Donald Trump and Chinese President Xi Jinping was more likely to take place in April at the earliest. The greenback against a basket of currencies traded 0.3 percent up at 96.72, having touched a low of 96.39 on Wednesday, its lowest since March 4. FxWirePro's Hourly Dollar Strength Index stood at 47.22 (Neutral) by 1000 GMT.

EUR/USD: The euro plunged from an over 1-week peak hit in the prior session after German Ifo institute cut its 2019 growth forecast for Germany to 0.6 percent from 1.1 percent due to weaker foreign demand for industrial goods. The European currency traded 0.2 percent down at 1.1306, having touched a high of 1.1338 on Wednesday, its highest since Mar. 5. FxWirePro's Hourly Euro Strength Index stood at 9.41 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1367 (78.6% retracement of 1.1176 and 1.1496), a break above targets 1.1408 (March 1 High). On the downside, support is seen at 1.1297 (10-DMA), a break below could drag it till 1.1256 (5-DMA).

USD/JPY: The dollar rallied to a 1-week peak as risk sentiment improved after Britain's parliament removed a key source of uncertainty by rejecting a no-deal Brexit. The major was trading 0.4 percent up at 111.60, having hit a high of 111.73 earlier, its highest since March 8. FxWirePro's Hourly Yen Strength Index stood at -70.16 (Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. unemployment benefit claims, export and import price index, and new home sales. Immediate resistance is located at 111.85 (Mar. 7 High), a break above targets 112.13 (Mar. 5 High). On the downside, support is seen at 110.66 (Feb.28 Low), a break below could take it lower at 110.35 (Feb.27 Low).

GBP/USD: Sterling slumped from a 9-month peak recorded yesterday as investors remained in a cautious mood ahead of another crucial vote to extend the Brexit deadline later in the day. On Wednesday, British lawmakers voted against a potentially disorderly no-deal departure from the European Union that sent the pair over the 1.3300 handle. The major traded 0.7 percent down at 1.3231, having hit a high of 1.3380 on Wednesday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at 17.98 (Neutral) 1000 GMT. Immediate resistance is located at 1.3380 (Mar. 13 High), a break above could take it near 1.3446 (June 14 High). On the downside, support is seen at 1.3166 (Mar. 4 Low), a break below targets 1.3097 (Mar. 5 Low). Against the euro, the pound was trading 0.6 percent down at 85.44 pence, having hit a high of 84.71 on Wednesday, it’s highest since May 2017.

USD/CHF: The Swiss franc eased, retreating from an over 1-week high touched in the previous session, as the greenback rebounded on the back of better-than-expected U.S. core capital goods orders.  The major trades 0.05 percent up at 1.0043, having touched a low of 1.0026 on Wednesday; it’s lowest since March 5. FxWirePro's Hourly Swiss Franc Strength Index stood at 74.47 (Bullish) by 1000 GMT. On the higher side, near-term resistance is around 1.0082 (5-DMA) and any break above will take the pair to next level till 1.0124 (Mar. 7 High). The near-term support is around 1.0001 (February 19 Low), and any close below that level will drag it till 0.9983 (February 25 Low).

Equities Recap

European shares advanced to a 5-month high in early deals after the British parliament voted to reject a disorderly Brexit.

The pan-European STOXX 600 index surged 0.5 percent at 377.49 points, while the FTSEurofirst 300 index rallied 0.4 percent to 1,482.20 points.

Britain's FTSE 100 trades 0.5 percent up at 7,195.58 points, while mid-cap FTSE 250 rose 0.8 to 19,334.58 points.

Germany's DAX fell 0.05 percent at 11,566.77 points; France's CAC 40 trades 0.5 percent higher at 5,330.00 points

Commodities Recap

Crude oil prices surged to 4-months highs, as a production curb agreement by OPEC and its partners along with U.S. sanctions on Iran and Venezuela tightened global supplies. International benchmark Brent crude was trading 0.3 percent down at $67.44 per barrel by 1037 GMT, having hit a high of $68.11 earlier, its highest since Nov. 16. U.S. West Texas Intermediate was trading 0.3 percent lower at $58.14 a barrel, after rising as high as $58.65, its highest since the Nov. 13.

Gold prices declined from a 2-week high hit in the previous session as the dollar regained some ground. Spot gold was 0.8 percent down at $1,298.86 per ounce as of 1040 GMT, having touched a high of $1,311.18 on Wednesday, its highest since March 1. U.S. gold futures also dipped 0.5 percent, to $1,302.40 an ounce.

Treasuries Recap

The U.S. Treasuries suffered during afternoon session ahead of the country’s weekly initial jobless claims, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasury yield rose nearly 2-1/2 basis points to 2.632 percent, the super-long 30-year bond yields surged 1-1/2 basis points to 3.024 percent and the yield on the short-term 2-year also traded 1-1/2 basis points up at 2.469 percent.

The United Kingdom’s gilts plunged during the afternoon session after the House of Commons voted last night to reject a no-deal Brexit. Investors will now keep a close eye on the British Parliament’s vote on an extension of Brexit date, to be held later today. The yield on the benchmark 10-year gilts, jumped nearly 3-1/2 basis points to 1.232 percent, the super-long 30-year bond yields surged 2 basis points to 1.750 percent and the yield on the short-term 2-year climbed 2-1/2 basis points to 0.780 percent.

The German bunds slipped during European session after investors have largely shrugged-off the lower-than-expected reading of the country’s consumer price inflation (CPI) data for the month of February, released today. The German 10-year bond yields, which move inversely to its price, rose nearly 1-1/2 basis points to 0.076 percent, the yield on 30-year note traded tad higher at 0.739 percent and the yield on short-term 2-year traded 1 basis point higher at -0.541 percent.

The Japanese government bonds remained flat during Asian session amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around -0.042 percent, the yield on the long-term 30-year barely slipped to 0.568 percent and the yield on short-term 2-year too edged tad lower to -0.157 percent.

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