Europe Roundup: Sterling gains as emergency rate cut expectations wane, European shares up,Gold gains, Oil rises as OPEC backs deeper supply cuts-March 5th,2020

Market Roundup

• Spanish 10-Year Obligacion Auction 0.170%,0.240% previous

• Spanish 3-Year Bonos Auction    -0.416%,-0.301% previous

• Spanish 5-Year Bonos Auction    -0.260%,-0.103% previous

• Spanish Consumer Confidence  85.7, 87.2 previous

• Brazilian Jan PPI (MoM)  0.32%,0.65%    previous
    
Looking Ahead - Economic Data (GMT)  
 
• 13:30 US Continuing Jobless Claims 1,733K, 1,724K1,724K

• 13:30 US Initial Jobless Claims    215K, 219K previous

• 13:30 US Jobless Claims 4-Week Avg 209.75K previous  
 
• 13:30 US Nonfarm Productivity (QoQ) (Q4) 1.4%,-0.2%  previous

• 13:30 US Unit Labor Costs (QoQ) (Q4)    1.4%,2.5% previous  
 
• 13:30 US Jan Durables Excluding Defense (MoM)  3.6%  previous

• 13:30 US Jan Factory Orders (MoM)  -0.1%, 1.8% previous    
 
Looking Ahead - Economic events and other releases (GMT)

• 17:00 UK BoE Gov Carney Speech

•17:45  Canada    BoC Gov Poloz Speech  
 
Fx Beat    

EUR/USD: The euro strengthened against dollar on Thursday as traders priced in more monetary policy easing by the Federal Reserve after it cut interest rates by 50 basis points this week in an emergency move to shield the economy from the coronavirus spread. As a result, the greenback remained close to the two-month low of 1.1214 it fell to against the euro on Tuesday, last trading neutral at 1.1132.  Immediate resistance can be seen at 1.1206 (Higher BB), an upside break can trigger rise towards 1.1238 (31st Dec high).On the downside, immediate support is seen at 1.1129 (5 DMA), a break below could take the pair towards 1.1033 (9 DMA).

GBP/USD: Sterling gained further ground against the U.S. dollar on Thursday, as expectations waned for an immediate Bank of England rate cut to follow this week’s emergency move from the U.S. Federal Reserve to contain coronavirus damage. Incoming BoE governor Andrew Bailey dampened expectations of an inter-meeting cut late on Wednesday, telling lawmakers the central bank should wait until it has more clarity about the economic hit from the outbreak. Immediate resistance can be seen at 1.3000(Psychological level), an upside break can trigger rise towards 1.3075 (Higher BB).On the downside, immediate support is seen at 1.2764 (Lower BB), a break below could take the pair towards 1.2700 (Psychological level).

USD/CHF: The dollar dipped against the Swiss franc on Thursday as monetary policy easing in the United States fueled by worries about the economic impact of the coronavirus on global economy. The Fed acted on Tuesday, delivering a 50-basis point emergency rate cut, with many traders expecting at least two more such moves in coming months.But while U.S. policy rates, which stand at a target range of 1.00% to 1.25%, have more room to fall, many rates in Europe and Japan are already below zero and monetary authorities there are hesitant to lower them much further. Immediate resistance can be seen at 0.9650 (5 DMA), an upside break can trigger rise towards 0.9730 (30 DMA).On the downside, immediate support is seen at 0.9500 (Psychological level), a break below could take the pair towards 0.9420 (23.6% fib).

USD/JPY: The dollar declined against the Japanese yen on Thursday amid expectations of the Federal Reserve will cut interest rates further, after slashing them by 50 basis points this week in an emergency move to shield the economy from the effects of coronavirus. The Fed had mentioned the epidemic 48 times in its latest Beige Book report, suggesting policymakers were highly concerned about the economic damage of the disease. At (GMT 13:00), the yen was last up 0.51% at 107.72.Strong resistance can be seen at 107.69 (5 DMA), an upside break can trigger rise towards 108.72 (9 DMA).On the downside, immediate support is seen at 106.79 (Daily low), a break below could take the pair towards 106.00  (Psychological level). 

Equities Recap

European shares headed lower on Thursday, as a slump in British stocks and profit warnings from several companies soured market sentiment even after central banks this week tried to ease the blow of the coronavirus outbreak on global growth.

At (GMT 13:04 ),UK's benchmark FTSE 100 was last trading lower at 1.72percent, Germany's Dax was down by 1.72 percent, France’s CAC was last down by 1.88 percent.

Commodities Recap

Gold edged up on Thursday on safe-haven buying fuelled by worries about the fast-spreading coronavirus, but a rise in equity markets limited bullion’s gains.

Spot gold inched 0.2% higher to $1,638.70 per ounce by 0451 GMT. U.S. gold futures were down 0.2% at $1,639.50.

Oil rose on Thursday after major producers agreed on deeper output cuts to bolster prices as worries intensify over the fast-spreading coronavirus outbreak and its impact on the global economy and crude consumption.

Brent crude  rose by 19 cents, or 0.4%, to $51.32 a barrel by 1133 GMT. U.S. West Texas Intermediate (WTI)   was up 15 cents, or 0.3%, at $46.93.

Treasuries Recap

German bond yields held near recent six-month lows on Thursday, as stock markets soured and caution in the face of the coronavirus outbreak steered investors back to safe-haven debt markets.

The yield on Germany’s benchmark 10-year Bund, regarded as one of the safest assets in the world, was steady at -0.64%   back within sight of six-month lows hit Monday.Most other 10-year bond yields in the euro area were lower on the day, although Italy’s 10-year bond yield rose to 1.03%.