Market Roundup
- EU does not expect Brexit breakthrough before weekend - Diplomats, Officials
- Brexit: Britain's business minister says the competitiveness of UK industry would decline if we imposed tariffs on components the UK imports
- Brexit: Britain's business minister says cutting tariffs could remove incentive for other countries to want a trade deal with the UK
- Brexit: Britain's business minister says UK will face very difficult choice on tariffs in the event of a no-deal Brexit
Economic Data Ahead
- (0815 ET/1315 GMT) Payrolls processor ADP releases U.S. employment report for the month of February. The report is expected to show that 189,000 jobs were added as compared with 213,000 jobs in January.
- (0830 ET/1330 GMT) The United States releases trade balance figures for the month of December. The economy's trade deficit is expected to have widened to $57.0 billion from 49.3 billion in November.
- (0830 ET/1330 GMT) Statistics Canada is likely to report that international trade deficit expanded to C$2.80 billion in December from C$2.06 billion in November
- (1000 ET/1500 GMT) Bank of Canada will meet to announce its benchmark interest rate, where it is expected to hold interest rates steady.
- (1000 ET/1500 GMT) The Richard Ivey School of Business releases Canada's seasonally adjusted Ivey Purchasing Managers Index for the month of February. The index posted a reading of 54.7 in the prior month.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 25.
- (1400 ET/1900 GMT) The Fed issues its Beige Book, a summary of anecdotes on the health of the economy.
Key Events Ahead
- (0715 ET/1215 GMT) Bank of England Deputy Governor Jon Cunliffe speaks at an event in London
- (1000 ET/1500 GMT) Bank of Canada will meet to announce its benchmark interest rate, where it is expected to hold interest rates steady.
- (1200 ET/1700 GMT) Federal Reserve Bank of Cleveland President Loretta Mester participates in moderated question-and-answer session in Columbus, Ohio(1210 ET/1710 GMT) Federal Reserve Bank of New York President John Williams at the Economic Club of New York
- (1230 ET/1730 GMT) Michael Saunders, Bank of England member of the monetary policy committee, speaks at an event in London
- (1300 ET/1800 GMT) Bank of England chief economist Andy Haldane to host first 'Citizens Panel' in Hull, northeast England
FX Beat
DXY: The dollar index rose, extending gains for the sixth straight session, as investors now awaited U.S. ADP non-farm employment data for the month of February, and speeches by members of the Federal Open Market Committee, Mester and Williams for fresh clues on the strength of the economy. The greenback against a basket of currencies traded 0.05 percent up at 96.94, having touched a high of 97.01 on Tuesday, its highest since February 19. FxWirePro's Hourly Dollar Strength Index stood at 82.28 (Slightly Bullish) by 0900 GMT.
EUR/USD: The euro plunged to a 2-week low as inventors expect the European Central Bank on Thursday to signal a delay in hiking rates until next year and re-launch long-term bank loans soon. The European currency traded 0.05 percent down at 1.1301, having touched a low of 1.1289 earlier, its lowest since Feb. 19. FxWirePro's Hourly Euro Strength Index stood at 41.96 (Neutral) by 0900 GMT. Immediate resistance is located at 1.1341 (Feb. 13 High), a break above targets 1.1371 (Feb. 20 High). On the downside, support is seen at 1.1275 (Feb. 19 Low), a break below could drag it till 1.1234 (Feb. 15 Low).
USD/JPY: The dollar consolidated near a 2-1/2 month peak hit in the previous session as investors continued to digest better-than-expected U.S. single-family home sales data. Moreover, the rebound in the service sector to a 7-month high in December continued to support the bid tone around the pair. The major was trading flat at 111.90, having hit a high of 112.07 on Friday, its highest since December 20. FxWirePro's Hourly Yen Strength Index stood at 10.38 (Neutral) by 0900 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. ADP employment change, trade balance and Fed William's speech. Immediate resistance is located at 112.20, a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 111.32 (Mar. 1 Low), a break below could take it lower at 110.66 (Feb.28 Low).
GBP/USD: Sterling slumped, drifting closer to a 1-week low touched in the prior session, amid a lack of progress in Brexit talks stroking concern that a vote on Prime Minister Theresa May's deal could be delayed. The major traded 0.4 percent down at 1.3130, having hit a low of 1.3097 on Tuesday; it’s lowest since Feb.26. FxWirePro's Hourly Sterling Strength Index stood at 22.79 (Neutral) 0900 GMT. Immediate resistance is located at 1.3226 (5-DMA), a break above could take it near 1.3288 (Feb.26 High). On the downside, support is seen at 1.3093 (Feb. 26 Low), a break below targets 1.3011 (Feb. 20 Low). Against the euro, the pound was trading 0.3 percent down at 86.05 pence, having hit a low of 86.45 on Tuesday, it’s lowest since Feb 26.
USD/CHF: The Swiss franc tumbled to a 2-week low as the greenback surged across the board on unexpectedly strong U.S. economic data. The major trades 0.1 percent up at 1.0050, having touched a low of 0.9926 on Thursday; it’s lowest since February 1. FxWirePro's Hourly Swiss Franc Strength Index stood at -90.08 (Slightly Bearish) by 0900 GMT. On the higher side, near-term resistance is around 1.0060 (February 19 High) and any break above will take the pair to next level till 1.0099 (February 11 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 declined, weighed down by weak results from the autos sector, while sterling slumped as the European Union saw no Brexit breakthrough before this weekend
The pan-European STOXX 600 index slumped 0.2 percent at 375.49 points, while the FTSEurofirst 300 index declined 0.1 percent to 1,475.78 points.
Britain's FTSE 100 trades 0.1 percent up at 7,191.82 points, while mid-cap FTSE 250 eased 0.1 to 19,418.78 points.
Germany's DAX fell 0.2 percent at 11,602.22 points; France's CAC 40 trades 0.1 percent lower at 5,291.33 points
Commodities Recap
Crude oil prices plunged as bullish output forecasts by two U.S. producers and a build in weekly U.S. crude stockpiles offset OPEC-led production cuts. International benchmark Brent crude was trading 0.1 percent down at $65.51 per barrel by 0934 GMT, having hit a high of $67.11 on Friday, its highest since February 25. U.S. West Texas Intermediate was trading 0.5 percent lower at $55.96 a barrel, after rising as high as $57.85 on Friday, its highest since the November 16.
Gold prices eased, hovering towards a more than 5-week low hit in the previous session, as the greenback surged across the board. Spot gold was 0.1 percent down at $1,286.34 per ounce by 0936 GMT, having touched a low of $1,281.08 in the previous session, its lowest since January 25. U.S. gold futures were up about 0.4 percent at $1,289.60 per ounce.
Treasuries Recap
The U.S. Treasuries gained during late European session ahead of the country’s ADP non-farm employment data for the month of February, scheduled to be released today by 13:15GMT. The yield on the benchmark 10-year Treasury yield slipped 1 basis point to 2.711 percent, the super-long 30-year bond yields also edged 1 basis point higher at 3.078 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points lower at 2.538 percent.
The German bunds slightly rose during European session ahead of the European Central Bank’s (ECB) monetary policy meeting, due to be held on March 7 by 12:45GMT, besides, the eurozone’s gross domestic product (GDP) for the fourth quarter of 2018, scheduled to be released on the same day by 10:00GMT, which will add further direction to the debt market. The German 10-year bond yields, which move inversely to its price, fell 1-1/2 basis points to 0.151 percent, the yield on 30-year note also slipped nearly 1-1/2 basis points to 0.791 percent and the yield on short-term 2-year suffered 1 basis point to trade at -0.511 percent.
The Japanese government bonds remained tad higher ahead of the country’s gross domestic product (GDP) for the fourth quarter of 2018 and household spending data for the month of January, both scheduled to be released on March 7 by 23:30GMT and 23:50GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained 1/2 basis point lower at -0.004 percent, the yield on the long-term 30-year too traded slighgtly lower at 0.636 percent while the yield on short-term 2-year slumped 14 basis points to -0.142 percent.
The Australian government bond yields hit a one-week low during Asian trading session after the country’s gross domestic product (GDP) for the fourth quarter of this year missed market expectations, also falling from the previous reading in the third quarter. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged nearly 5-1/2 basis points to 2.104 percent, the yield on the long-term 30-year bond also slumped 51/2 basis points to trade at 2.616 percent and the yield on short-term 2-year traded 4-1/2 basis points lower at 1.692 percent.
