Market Roundup
- USD/JPY -1.0%, EUR/USD +0.65%, GBP/USD +1.0%
- DXY -0.27%, DAX -0.85%, Brent -0.25%, Iron -5.25%, Gold +1.10%
- Germany Mar IFO Bus Climate 112.3 vs 111.1 previous, 111.00 expected
- Germany Mar IFO Current Conditions 119.3 vs 118.4 previous, 118.3 expected
- Germany Mar IFO Expectations 105.7 vs 104.2 previous, 104.3 expected
- EZ Feb M3 annual growth 4.7% vs 4.9% previous, 4.9% expected
- Switzerland Domestic sight deposit w/e Mar 24 CH476.34 bln vs 470.893 bln previous
- Merkel’s conservative CDU comes first in German Saarland state vote
- OPEC, non-OPEC committee recommends extending output cut by 6 months
- CFTC IMM CTA data – Specs boost net long USD bets for third straight week
- South Africa Finmin Gordhan recalled from UK visit by Pres. Zuma
- Japanese manufacturing braces for possible US import tax, plan lower pay hikes – Reuters poll
- BoJ March 15-16 minutes – Will take time for inflation to get to 2% target
- Toshiba’s Westinghouse may file bankruptcy Tuesday, seeks Kepco aid – Nikkei
- Advisor Fan Gang – PBOC wants smooth transition to less reserves
Economic Data Ahead
- (1030 ET/1430 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of March. The index posted a rise of 24.5 percent in the previous month.
- (1130 ET/1530 GMT) The Bank of Canada releases Business Outlook Survey.
Key Events Ahead
- (1315 ET/1715 GMT) Chicago Fed President Charles Evans will give a speech on the economy and monetary policy before the Global Interdependence Center "2017 Central Banking Series: Madrid".
- (1315 ET/1715 GMT) European Central Bank Executive Board member Peter Praet's speech.
- (1800 ET/2200 GMT) Reserve Bank of Australia Assistant Governor Guy Debelle's Speech.
- (1830 ET/2230 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated Q/A session before "A Discussion of Economic Conditions and the Role of Monetary Policy" hosted by the Mosbacher Institute for Trade, Economics and Public Policy, in College Station, Texas.
FX Beat
DXY: The dollar tumbled versus its major peers after Trump's failure to get approval for his healthcare plan last week raised doubts over the future of his agenda. The greenback against a basket of currencies traded 0.7 percent down at 99.06, having hit a low of 98.94 earlier in the session, its lowest since Nov. 11. FxWirePro's Hourly Dollar Strength Index stood at -4.83 (Neutral) by 1100 GMT.
EUR/USD: The euro rallied to a 4-1/2-month high after the latest Opinionway Poll on French presidential election showed that candidate Macron continued to lead both the rounds. Moreover, the major was also supported by broad-based U.S. dollar weakness as Donald Trump's defeat over the health-care replacement plan dampened investors' sentiment. The European currency traded 0.6 percent higher at 1.0880, having touched a high of 1.0882 earlier, its highest since Dec. 8. FxWirePro's Hourly Euro Strength Index stood at 9.08 (Neutral) by 1000 GMT. The pair faces major intraday support at 1.0820 and a break below will drag it down till 1.07985 (61.8% retracement of 1.07610 and 1.08735)/1.07500. The major resistance is around 1.08735 and any break above targets 1.0900/1.09369 (61.8% retracement of 1.1299 and 1.03400) level.
USD/JPY: The dollar tumbled to a 4-month low amid heavy selling pressure around the greenback after the U.S. President Donald Trump's failed to push through the healthcare reform bill, triggering a fresh wave of risk-aversion. However, the major trimmed some losses above the 110.00 handle as markets focus shifted on speeches from the FOMC member Charles Evans and Robert Steven Kaplan. The major traded 0.8 percent down at 110.38, having hit a low of 110.11 earlier in session, its lowest since Nov. 18. FxWirePro's Hourly Yen Strength Index stood at 66.33 (Bullish) by 1000 GMT. On the higher side, any break above 112 (support turned into resistance) will take the pair till 113.47 (21- day EMA)/114.30. The near term support is around 110 and any break below will drag it till 108.65.
GBP/USD: Sterling touched an 8-week high near the 1.2600 handle after Trump administration’s failed to pass the Healthcare bill through the Congress, triggering steep losses in the U.S. Treasury yields. The major trades 0.92 higher at 1.2606, having hit an early high of 1.2610, its highest since Feb. 2. FxWirePro's Hourly Sterling Strength Index stood at 118.65 (Highly Bullish) by 1000 GMT. On the lower side, 1.2520 (resistance turned into support) will be acting as near-term support and any break below will drag the pair down till 1.2460/1.2420. Any break above 1.2582 confirms minor bullishness, a jump till 1.2706 (Feb 2 high) is likely. Against the euro, the pound traded 0.2 percent higher at 86.32 pence, retreating away from a low of 86.73 hit earlier, its lowest since Mar 22.
USD/CHF: The Swiss franc rose to an over 4-month high as the greenback remained heavily offered across the board after President Donald Trump failed to push through a healthcare reform bill. The major traded 0.6 percent lower at 0.9849, hovering towards an early low of 0.9835, its weakest since Nov. 11. FxWirePro's Hourly Swiss Franc Strength Index stood at 62.02 (Highly Bullish) by 1000 GMT. The low formed on Jan 31 around 0.9861 was acting as major support and any break below will drag the pair down till 0.97850/0.9730. On the higher side, 0.9900 will be acting as minor resistance and any break above 0.9960 will take the pair till 1.0000/1.0060 in the short term.
AUD/USD: The Australian dollar gained after falling for four consecutive days, as the U.S. dollar weakened after Trumpcare bill failure to seek the House approval raised concerns over President Trump's ability to deliver on his campaign promises. The Aussie trades 0.26 percent up at 0.7642, having hit a low of 0.7603 in the previous session, it’s lowest since Mar. 15. FxWirePro's Hourly Aussie Strength Index stood at -94.53 (Slightly Bearish) by 1000 GMT. On the lower side, the next immediate support stands at 0.7593 (55- day EMA) and any break below will drag the pair down till 0.7561 (100- day EMA)/0.7540 (200- day MA). The major resistance is around 0.7750 (Feb 23 high) and a break above will take it till 0.7800.
Equities Recap
European shares plunged in early trade, weighed down by losses among miners and banks stocks, while the greenback plunged as investors worried over President Trump's administration and its ability to introduce tax reforms and fiscal spending plans.
The pan-European STOXX 600 index slumped 0.49 percent to 374.65 points, while the FTSEurofirst 300 index declined 0.5 percent to 1,477.09 points.
Britain's FTSE 100 trades 0.68 percent down at 7,286.00 points, while mid-cap FTSE 250 eased 0.38 percent to 18,909.25 points.
Germany's DAX edged down 0.72 percent at 11,977.98 points; France's CAC 40 trades 0.32 percent lower at 5,004.82 points.
Tokyo's Nikkei plunged 1.44 percent to 18,985.59 points, Australia's S&P/ASX 200 index fell 0.15 percent to 5,745.10 points and South Korea's KOSPI shed 0.17 percent to 2,168.95 points.
Shanghai composite index eased 0.1 percent to 3,266.96 points, while CSI300 index dropped 0.3 percent to 3,478.04 points. Hong Kong’s Hang Seng declined 0.7 percent to 24,193.70 points.
Commodities Recap
Crude oil declined dragged lower by uncertainty over whether an OPEC-led production cut will be extended beyond June in order to reduce a global oversupply of crude. International benchmark Brent crude was trading 0.9 percent down at $50.51 per barrel by 0938 GMT, having hit a low of $49.75 last week, its lowest since Nov. 30. U.S. West Texas Intermediate crude fell 1.16 percent to $47.56 a barrel, hovering towards a low of $47.08 hit on Wednesday, its weakest since Nov. 30.
Gold rose by more than 1 percent to hit a one-month peak as the dollar slumped and equities eased after President Donald Trump failed to pass the healthcare reform, raising doubts about his ability to steer the economic agenda. Spot gold rose 1.0 percent to $1,257.54 per ounce by 0943 GMT, having touched a high of $1,259.02, its highest since Feb. 27. U.S. gold futures were up 0.8 percent at $1,258.
Treasuries Recap
The U.S. Treasuries traded higher, following the failure of Trumpcare and as investors wait to watch the Federal Reserve Chair Janet Yellen’s speech, scheduled to be held on March 28. The yield on the benchmark 10-year Treasury slumped nearly 3 basis points to 2.37 percent, the super-long 30-year bond yield fell nearly 2 basis points to 2.98 percent and the yield on short-term 2-year note traded nearly 1-1/2 basis point lower at 1.24 percent.
The UK gilts traded mixed Monday as investors remain keen to watch the 5-year auction, scheduled to be held on March 28. The yield on the benchmark 10-year gilts slumped nearly 2 basis points to 1.18 percent, the super-long 30-year bond yields slid nearly 1-1/2 basis points to 1.76 percent while the yield on the short-term 2-year traded over 1-1/2 basis points down at 0.18 percent.
The German bunds bounced after investors largely shrugged off higher-than-expected Ifo business climate index. The yield on the benchmark 10-year bond slumped nearly 3-1/2 basis points to 0.38 percent, the long-term 30-year bond yields plunged nearly 4 basis points to 1.11 percent and the yield on the short-term 3-year bond traded 1 basis point lower at -0.62 percent.
The Japanese government bonds remained flat in mild trading session, following a slight global rout as concerns mounted over the United States President Donald Trump's inability to overhaul the US healthcare system. The benchmark 10-year bond yield, hovered around 0.05 percent, the long-term 30-year bond yields also remained flat at 0.83 percent and the yield on the short-term 2-year note also remained relatively unchanged at -0.25 percent.
The New Zealand bonds closed tad higher, slightly tracking the U.S. counterparts amid a session that witnessed data of little economic significance. The yield on the benchmark 10-year bond, fell 1 basis point to 3.19 percent, the yield on 7-year note also slid nearly 1 basis point to 2.80 percent while the yield on short-term 2-year note closed flat at 2.13 percent.
The Australian bonds sharply rebounded as investors poured into safe-haven assets tracking firmness in U.S. Treasuries amid losses in riskier equities and oil. The yield on the benchmark 10-year Treasury note, slumped 6-1/2 basis points to 2.70 percent, the yield on 15-year note plunged nearly 7 basis points to 3.10 percent and the yield on short-term 2-year traded 5 basis points lower at 1.73 percent.
