Market Roundup
- EUR/USD -0.05%, USD/JPY -0.43%, GBP/USD -0.15%, EUR/GBP 0.08%
- DXY 0.08%, DAX 0.22 %, FTSE 0.16%, Brent -0.15%, Gold -0.11%
- Euro zone banks may get reprieve until 2021 from ECB bad-debt rules
- Russia to expel UK diplomats as row over spy attack escalates
- U.S. pressing China to cut trade surplus by $100 bln -White House
- BOJ Kuroda calls for raising Japan's service-sector productivity
- Gold prices steady amid trade war fears, Britain-Russia tensions
- Oil prices stable on healthy demand, but oversupply worries loom
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of New York is expected to report that manufacturing activity in New York State grew to 15 in March, after rising 13.1 percent in February.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 5,000 to a seasonally adjusted 226,000 for the week ended Mar. 9, while continuing claims for the week ended Mar. 2 is expected to rise to 1.900 million from previous 1.870 million.
- (0830 ET/1230 GMT) The U.S. Labor Department publishes import and export prices index for the month of February. The import prices are likely to have gained 0.2 percent after rising 1.0 percent in January, while exports are expected to have edged up 0.3 percent after increasing 0.8 percent in the prior month.
- (0830 ET/1230 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity decreased to 23.0 in March from 25.8 in February.
- (0830 ET/1230 GMT) Payrolls processor ADP releases Canada employment report for the month of February. The report showed 10,700 jobs added in January.
- (1000 ET/1400 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index eased to 71 in March from 72 in February,
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending March 9.
Key Events Ahead
- N/A U.S. President Donald Trump meets with Irish Prime Minister Leo Varadkar at the White House, in Washington, D.C.
- N/A Treasury $62 bn coupon auctions settle (3/10(r)/30(r)) (raise $38.0 bn new cash)
- (1100 ET1500 GMT) Treasury announces 13- and 26-week bills (e: $51/45 bn)
- (1100 ET1500 GMT) Treasury announces reopened 10-year TIPS (e: $11 bn)
- (1145 ET/1545 GMT) European Central Bank Executive Board member Sabine Lautenschläger 's speech
FX Beat
DXY: The dollar index consolidated within narrow ranges after the Trump administration pressed China to cut its trade surplus with the United States by $100 billion. The greenback against a basket of currencies trades flat at 89.76, having touched a high of 90.36 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at -39.47 (Neutral) by 1000 GMT.
EUR/USD: The euro declined, extending previous session losses, weighed down by dovish comments from ECB President Mario Draghi, who addressed the lack of upside traction in inflation and added that the exchange rate level could affect inflation prospects. The European currency traded 0.05 percent down at 1.2361, having touched a high of 1.2412 on Wednesday, its highest since Mar. 8. FxWirePro's Hourly Euro Strength Index stood at -19.66 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2412 (Previous Session High), a break above targets 1.2465 (Feb 14 High). On the downside, support is seen at 1.2344 (10-DMA), a break below could drag it lower 1.2314.
USD/JPY: The dollar tumbled to a 1-week low against the yen as investors remained concerned about a U.S. shift towards increased protectionism under Donald Trump's administration. The major was trading 0.4 percent down at 105.91, having hit a low of 105.78 earlier, its lowest since Mar. 7. FxWirePro's Hourly Yen Strength Index stood at 159.35 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. unemployment claims and import and export price index. Immediate resistance is located at 107.04 (Mar 9 High), a break above targets 107.67 (Feb. 27 High). On the downside, support is seen at 105.78 (Session Low), a break below could take it lower 105.25.
GBP/USD: Sterling slumped after rising for fourth straight sessions, as worries that Britain and EU officials would fall short of securing a transition arrangement at a March 22-23 summit weighed heavily on the British currency. The major traded 0.2 percent down at 1.3935, having hit a high of 1.3995 the day before, it’s highest since Feb. 27. FxWirePro's Hourly Sterling Strength Index stood at 20.91 (Neutral) by 1000 GMT. Immediate resistance is located at 1.4010, a break above could take it near 1.4070. On the downside, support is seen at 1.3918 (21-DMA), a break below targets 1.3868 (10-DMA). Against the euro, the pound was trading 0.1 percent down at 88.69 pence, having hit a high of 88.41 pence earlier, it’s highest since Mar 1.
USD/CHF: The Swiss franc eased as the Swiss National Bank remained ultra-cautious in not changing its policy, and kept its target range for the 3-month LIBOR at -1.25 to -0.25 percent, as expected. The major trades 0.1 percent up at 0.9452, having touched a low of 0.9424 the day before, it’s lowest since Mar. 8. FxWirePro's Hourly Swiss Franc Strength Index stood at 61.29 (Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9480 (5-DMA) and any break above will take the pair to next level till 0.9514. The near-term support is around 0.9409 and any close below that level will drag it till 0.9388 (21-DMA).
Equities Recap
European shares rallied, supported by upbeat results from companies, while the greenback consolidated near a 1-week low hit in the prior session on fears of a global trade war as well as the prospect of political uncertainty in the United States.
The pan-European STOXX 600 index advanced 0.4 percent to 379.82 points, while the FTSEurofirst 300 index surged 0.1 percent to 1,467.63 points.
Britain's FTSE 100 trades 0.2 percent higher at 7,145.23 points, while mid-cap FTSE 250 fell 0.2 percent to 19,776.09 points.
Germany's DAX rose 0.2 percent at 12,267.00 points; France's CAC 40 trades 0.3 percent up at 5,247.17 points.
Commodities Recap
Crude oil prices declined as a relentless rise in U.S. production undermined efforts led by producer cartel OPEC to cut supplies and balance markets. International benchmark Brent crude was trading 0.1 percent up at $64.75 per barrel by 1035 GMT, having hit a high of $65.81 on Monday, its highest since Mar. 6. U.S. West Texas Intermediate was trading 0.05 percent up at $60.95 a barrel, after rising as high as $62.31 on Monday, its strongest since Mar. 7.
Gold prices declined, extending previous session losses, amid political tensions between Britain and Russia, and renewed worries about a global trade war. Spot gold 0.1 percent down at $1,322.99 per ounce at 1037 GMT, having hit a high of $1,329.91 an ounce on Wednesday, its highest since Mar. 7. U.S. gold futures for April delivery were almost unchanged at $1,325.20 per ounce.
Treasuries Recap
The U.S. Treasuries traded tad higher ahead of the country’s initial jobless claims and the Philadelphia Fed manufacturing index for the month of March, both scheduled to be released today by 12:30GMT respectively. The yield on the benchmark 10-year Treasuries slid nearly 1 basis point to 2.81 percent, the super-long 30-year bond yields fell nearly 1-1/2 basis points to 3.04 percent and the yield on the short-term 2-year traded tad lower at 2.25 percent
The German bunds slipped, following optimism among investors as they prepare to watch the Eurozone’s consumer price inflation index (CPI) for the month of February, scheduled to be released on March 15 by 10:00GMT for detailed direction in the debt market. The German 10-year bond yields, which move inversely to its price, rose 1/2 basis point to 0.59 percent, the yield on 30-year note hovered around 1.24 percent and the yield on short-term 3-year traded tad higher at -0.39 percent.
The New Zealand government bonds jumped at the time of closing after the country’s gross domestic product (GDP) for the fourth quarter of last year disappointed market participants, although remaining unchanged from that in the third quarter of 2017. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 4-1/2 basis points to 2.90 percent, the yield on 20-year also plunged 4-1/2 basis points to 3.40 percent and the yield on short-term 2-year too closed 2 basis points lower at 1.94 percent.
The Japanese government bonds traded sideways as investors remained muted in a silent session that witnessed little data of any economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.04 percent, the yield on the long-term 30-year note remained steady at 0.76 percent and the yield on short-term 2-year traded tad lower at -0.14 percent
The Australian government bonds rallied as growing concerns among investors of trade war which would hurt the global economy pushed demand for safe-haven assets. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 2-1/2 basis points to 2.731 percent, the yield on the long-term 30-year note dipped 2 basis points to 3.310 percent and the yield on short-term 2-year down 1/2 basis points to 1.997 percent.
