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Europe Roundup: Sterling gains on upbeat labour data, greenback halts 3-day losing streak amid hopes of progress in U.S.-China talks, European shares decline - Tuesday, February 19th, 2019

Market Roundup

  • Eurozone Feb 2019 ZEW survey expectations increase to -16.6 balance vs previous -20.9 balance
     
  • Eurozone Dec 2018 construction output mm decrease to -0.37 % vs previous 0.28 % (revised from -0.09 %)
     
  • Germany Feb 2019 ZEW current conditions decrease to 15 balance (forecast 23 balance) vs previous 27.6 balance
     
  • Germany Feb 2019 ZEW economic sentiment increase to -13.4 balance (forecast -14 balance) vs previous -15 balance
     
  • United Kingdom Dec 2018 average wk earnings 3m yy stays flat at 3.4 % (forecast 3.5 %) vs previous 3.4 %
     
  • United Kingdom Dec 2018 ILO unemployment rate stays flat at 4 % (forecast 4 %) vs previous 4 %
     
  • United Kingdom Dec 2018 average earnings (ex-bonus) increase to 3.4 % (forecast 3.4 %) vs previous 3.3 %
     
  • United Kingdom Dec 2018 employment change increase to 167 person (forecast 140 person) vs previous 141 person
     
  • United Kingdom Jan 2019 claimant count underemployment change decrease to 14.2 person vs previous 20.8 person
     
  • Eurozone Dec 2018 current account nsa,eur increase to 33 eur vs previous 25.6 eur (revised from 23.2 eur)
     
  • Eurozone Dec 2018 current account sa, eur decrease to 16.2 eur vs previous 22.65 eur (revised from 20.3 eur)
     
  • Eurozone Dec 2018 current account sa, eur decrease to 16 eur vs previous 23 eur (revised from 20.3 eur)
     
  • Italy Dec 2018 industrial orders yy nsa decrease to -5.3 % vs previous -2.2 % (revised from -2 %)
     
  • Italy Dec 2018 industrial sales mm sa decrease to -3.5 % vs previous -0.1 % (revised from 0.1 %)
     
  • Italy Dec 2018 industrial sales yy wda decrease to -7.3 % vs previous 0.5 % (revised from 0.6 %)
     
  • Italy Dec 2018 industrial orders mm sa decrease to -1.8 % vs previous -0.4 % (revised from -0.2 %)
     

Economic Data Ahead

  • (1000 ET/1500 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index rose to 59 points in February compared to 58 points in January.

Key Events Ahead

  • (0850 ET/1350 GMT) Federal Reserve Bank of Cleveland President Loretta Mester to speaks on the economic outlook and monetary policy in Newark
     
  • (1000 ET/1500 GMT) ECB Chief Economist Peter Praet participates in a panel discussion at a conference in Berlin
     
  • (1230 ET/1730 GMT) Riksbank Governor Stefan Ingves speaks about the economic situation and current monetary policy in New York
     

FX Beat

DXY: The dollar index gained after the White House said a new round of talks between the United States and China to resolve their trade war will take place in Washington today, with follow-up sessions at a higher level later in the week. The greenback against a basket of currencies trades 0.1 percent up at 96.92, having touched a high of 97.37 on Friday, its highest since December 17. FxWirePro's Hourly Dollar Strength Index stood at 9.66 (Neutral) by 1000 GMT.

EUR/USD: The euro steadied above the 1.3000 handle on news that Italy started discussions with the European Union over the renewal of a state guarantee scheme designed to help banks shed bad loans. The European currency traded 0.05 percent up at 1.1312, having touched a low of 1.1234 on Friday, its lowest since Nov. 13. FxWirePro's Hourly Euro Strength Index stood at -28.40 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1341 (Feb. 13 High), a break above targets 1.1368 (Feb.7 High). On the downside, support is seen at 1.1216 (Nov. 13 Low), a break below could drag it till 1.1180.

USD/JPY: The dollar surged against the Japanese yen after Bank of Japan Governor Haruhiko Kuroda told the Japanese parliament the central bank was ready to ramp up stimulus if a rising yen dented the economy. Moreover, growing expectations for an easing in the U.S.-China trade conflict supported investor risk sentiment. The major was trading 0.2 percent up at 110.80, having hit a high of 111.12 on Thursday, its highest since December 27. FxWirePro's Hourly Yen Strength Index stood at -32.19 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. housing market index. Immediate resistance is located at 111.05 (Feb. 13 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 110.28 (10-DMA), a break below could take it lower at 109.60 (Feb. 7 Low).

GBP/USD: Sterling rose, extending gains for the third straight session after data showed British workers' pay growth held at its fastest pace in a decade in late 2018 and job creation remained robust, indicating the labour market was staying strong ahead of Brexit. The major traded 0.1 percent up at 1.2928, having hit a low of 1.2772 on Thursday; it’s lowest since January 15. FxWirePro's Hourly Sterling Strength Index stood at 117.04 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.2958 (Feb. 18 High), a break above could take it near 1.2996 (February 7 High). On the downside, support is seen at 1.2845 (Feb 11 Low), a break below targets 1.2766 (Nov 22 Low). Against the euro, the pound was trading flat at 87.47 pence, having hit a high of 87.42 on Monday, it’s highest since Feb. 8.

USD/CHF: The Swiss franc eased, retreating from a 1-week peak as optimism about U.S.-China trade talks boosted investor morale. The major trades 0.05 percent up at 1.0042, having touched a low of 1.0024 on Monday; it’s lowest since February 11. FxWirePro's Hourly Swiss Franc Strength Index stood at 80.41 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 1.0111 (November 12 High) and any break above will take the pair to next level till 1.0150. The near-term support is around 0.9961 (January 22 Low), and any close below that level will drag it till 0.9889 (December 7 Low).

Equities Recap

European shares tumbled, weighed down by losses in the banking sector, while sterling gained on better-than-expected labor market report.

The pan-European STOXX 600 index gained 0.4 percent at 368.40 points, while the FTSEurofirst 300 index eased 0.4 percent to 1,448.88 points.

Britain's FTSE 100 trades 0.5 percent down at 7,183.90 points, while mid-cap FTSE 250 declined 0.3 to 19,073.72 points.

Germany's DAX fell 0.1 percent at 11,290.12 points; France's CAC 40 trades 0.4 percent lower at 5,150.31 points

Commodities Recap

Crude oil prices eased, hovering away from its 2019 highs, amid concerns over slowing economic growth that would curb demand, however, OPEC-led supply cuts limited downside. International benchmark Brent crude was trading 0.5 percent down at $66.07 per barrel by 1028 GMT, having hit a high of $66.81 on Monday, its highest since November 20. U.S. West Texas Intermediate was trading 0.3 percent lower at $55.88 a barrel, after rising as high as $56.32 on Monday, its highest since the November 20.

Gold prices rallied to a near 10-month high as optimism around U.S.-China trade discussions dimmed the greenback's appeal. Spot gold was trading 0.3 percent up at $1,329.09 per ounce by 1036 GMT, having touched a high of $1,329.92, its highest level since April 25. U.S. gold futures rose 0.5 percent to $1,329 an ounce.

Treasuries Recap

The Italian government bond yields rose 5-6 basis points across the board, with the Italy's 10-year bond yield up 6 basis points at 1.74 percent, pushing the gap over German 10-year bond yields to 273 bps. German 10-year bond yields were down two bps points at 0.09 percent, heading back towards their lowest levels since October 2016.

The Japanese government bond prices traded slightly higher, with March 10-year JGB futures up 0.04 point at 152. The 20-year JGB yield was down 1 basis point at 0.405 percent, while the 30-year yield was down 1 basis point, at 0.580 percent.

The Australian government bond futures inched up in the wake of the minutes, with the three-year bond contract rising half a tick to 98.320. The 10-year contract also added half a tick to 97.8700.

The New Zealand government bonds slipped a touch with yields up as much as 2 basis points at the far end of the curve.

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July 2 15:00 UTC Released

DKCurrency Reserves

Actual

449.6 Stale

Forecast

Previous

451.7 Stale

July 2 13:45 UTC Released

USISM NY Biz Conditions

Actual

50 %

Forecast

Previous

48.6 %

January 31 00:00 UTC 766509766509m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 766509766509m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 778329778329m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 766509766509m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 778329778329m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 766509766509m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 766509766509m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 766509766509m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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