Menu

Search

  |   Market Roundups

Menu

  |   Market Roundups

Search

Europe Roundup: Sterling hits 1-week low on downbeat wage report, dollar index rallies as investors eye FOMC meeting minutes, European shares slump - Wednesday, February 21st, 2018

Market Roundup

  • United Kingdom Jan PSNCR, mm gbp decrease to -26.379 bln gb vs previous 25.312 bln gb (revised from 25.13 bln gb)
     
  • United Kingdom Dec Average earnings (ex-bonus) increase to 2.5 % (forecast 2.4 %) vs previous 2.3 % (revised from 2.4 %)
     
  • United Kingdom Dec employment change decrease to 88 (forecast 173) vs previous 102
     
  • United Kingdom Dec Average week earnings 3m yy stays flat at 2.5 % (forecast 2.5 %) vs previous 2.5 %
     
  • United Kingdom Dec ILO unemployment rate increase to 4.4 % (forecast 4.3 %) vs previous 4.3 %
     
  • United Kingdom Jan PSNB ex banks gbp decrease to -10.008 bln gb (forecast -9.5 bln gb) vs previous 1.892 bln gb (revised from 2.591 bln gb)
     
  • United Kingdom Jan PSNB, mm gbp decrease to -11.62 bln gb (forecast -11.1 bln gb) vs previous 0.28 bln gb (revised from 0.979 bln gb)
     
  • United Kingdom Jan claimant count unemployment change decrease to -7.2 k (forecast 4.1 k) vs previous 6.2 k (revised from 8.6 k)
     
  • Eurozone Feb Markit service flash PMI decrease to 56.7 (forecast 57.6) vs previous 58
     
  • Eurozone Feb Markit manufacturing flash PMI decrease to 58.5 (forecast 59.3) vs previous 59.6
     
  • Eurozone Feb Markit composite flash PMI decrease to 57.5 (forecast 58.5) vs previous 58.8
     
  • Germany Feb Markit composite flash PMI decrease to 57.4 (forecast 58.5) vs previous 59
     
  • Germany Feb Markit service flash PMI decrease to 55.3 (forecast 57) vs previous 57.3
     
  • Germany Feb Markit manufacturing flash PMI decrease to 60.3 (forecast 60.6) vs previous 61.1
     
  • France Feb Markit service flash PMI decrease to 57.9 (forecast 59) vs previous 59.2

Economic Data Ahead

  • (0945 ET/1445 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of February. The index is likely edged down to 55.4 after posted a final reading of 55.5 in the previous month.
     
  • (0945 ET/1445 GMT) Financial firm Markit releases preliminary U.S. composite PMI for the month of February. The index posted a final reading of 53.8 in the previous month.
     
  • (0945 ET/1445 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 54.0 in February after printing a final reading of 53.3 in January.
     
  • (1000 ET/1500 GMT) National Association of Realtors is expected to report that U.S. existing home sales rose 0.9 percent to an annual rate of 5.60 million units in January after falling 3.6 percent to 5.577 million units in December.
     
  • (1630 ET/2130 GMT) API reports its weekly crude oil stock.
     
  • (1400 ET/1900 GMT) Federal Open Market Committee issues minutes from its meeting that was held at the end of January.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending February 16.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending February 16.
     

Key Events Ahead

  • (0900 ET/1400 GMT) Philadelphia Fed President Patrick Harker speaks on the economic outlook before the "Edward Jones Dean's Breakfast: The Economic Outlook" event in St. Louis, Missouri.
     
  • (0915 ET/1415 GMT) Bank of Engaland's Mark Carney, Dr Ben Broadbent, Andrew G Haldane and Silvana Tenreyro speak in London
     
  • (2015 ET/0115 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari is expected to participate in a question-and-answer session moderated by Mike McKee of Bloomberg in Minneapolis.

FX Beat

DXY: The dollar index hit a 1-week high as investors focus shifted on Federal Reserve minutes for hints on the future pace of U.S. monetary tightening. The greenback against a basket of currencies traded 0.2 percent up at 89.87, having touched a high of 89.94, its highest since Feb. 14. FxWirePro's Hourly Dollar Strength Index stood at 83.21 (Slightly Bullish) by 1000 GMT.

EUR/USD: The euro declined to a 1-week low after data showed Eurozone business growth slowed more than expected in February. The economy's IHS Markit's composite flash PMI fell to 57.5, below forecasts for a modest dip to 58.5 from January's final reading of 58.8. The European currency traded 0.2 percent down at 1.2317, having touched a low of 1.2307 earlier, its lowest since Feb. 14. FxWirePro's Hourly Euro Strength Index stood at -48.21 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2450, a break above targets 1.2500. On the downside, support is seen at 1.2284, a break below could drag it lower 1.2245 (Feb 7 Low).

USD/JPY: The dollar rallied to a 1-week peak against the Japanese yen as the higher Treasury yields supported the greenback ahead of minutes of the Federal Reserve's most recent policy meeting. The major was trading 0.2 percent up at 107.49, having hit a low of 105.55 on Friday, its lowest since Nov. 2016. FxWirePro's Hourly Yen Strength Index stood at -15.50 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. PMI reports, existing home sales and FOMC minutes. Immediate resistance is located at 108.59 (38.2% retracement of 110.48 and 105.74), a break above targets 109.30 (23.6% retracement). On the downside, support is seen at 106.55  (Previous Session Low), a break below could take it lower 105.80.

GBP/USD: Sterling slumped to a 1-week low after data showed Britain's unemployment rate rose unexpectedly for the first time in almost two years in the three months to December. The economy's unemployment rate rose to 4.4 percent from 4.3 percent in the three months to December, the first increase since the three months to February 2016, as the number of jobless rose for a third consecutive month. The major traded 0.4 percent down at 1.3944, having hit a high of 1.4144 on Friday, it’s highest since Feb 5. FxWirePro's Hourly Sterling Strength Index stood at -41.33 (Neutral) by 1000 GMT. Immediate resistance is located at 1.4050, a break above could take it near 1.4144 (Feb 16 High). On the downside, support is seen at 1.3915, a break below targets 1.3900. Against the euro, the pound was trading 0.3 percent down at 88.40 pence, having hit a low of 89.19 pence on Wednesday, it’s lowest since Jan. 12.

USD/CHF: The Swiss franc declined to an over 1-week low as the greenback rallied ahead of the release of minutes of the Federal Reserve's latest policy meeting.  The major trades 0.2 percent up at 0.9374, having touched a low of 0.9187 on Friday, it’s lowest since Jun 2015. FxWirePro's Hourly Swiss Franc Strength Index stood at -72.29 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9406 and any break above will take the pair to next level till 0.9470 (Feb 8 High). The near-term support is around 0.9283 (Previous Session Low) and any close below that level will drag it till 0.9200.

Equities Recap

European shares tumbled, weighed down by a continuous rise in bond yields, while the greenback rallied to a 1-week high ahead of the Federal Reserve minutes release.

The pan-European STOXX 600 index declined 0.7 percent to 377.85 points, while the FTSEurofirst 300 index eased 0.6 percent to 1,480.60 points.

Britain's FTSE 100 trades 0.5 percent lower at 7,228.45 points, while mid-cap FTSE 250 plunged 0.6 percent to 19,683.39 points.

Germany's DAX fell 0.8 percent at 12,389.81 points; France's CAC 40 trades 0.6 percent down at 5,257.97 points.

Commodities Recap

Crude oil prices declined, weighed down by a rebound in the U.S. dollar from three-year lows hit last week and by an expected rise in U.S. crude production. International benchmark Brent crude was trading 0.5 percent down at $64.74 per barrel by 1029 GMT, having hit a high of $65.86 on Monday, its highest since Feb. 8. U.S. West Texas Intermediate was trading 0.7 percent down at $61.15 a barrel, after rising as high as $62.62 the day before, its strongest since Feb. 8.

Gold prices hit their lowest in a week as the greenback recovered from last week's three-year low, while investors awaited the minutes of the U.S. Federal Reserve's last policy meeting for clues on the pace of interest rate hikes this year. Spot gold was 0.1 percent down at $1,328.55 an ounce by 1031 GMT, having fallen to its lowest level since Feb. 14 at $1,325.32 earlier. U.S. gold futures dipped 0.2 percent to $1,328.3 per ounce.

Treasuries Recap

The UK gilts jumped after the country’s unemployment rate for the month of December came in worse than market expectations, leading investors to flock into safe-haven instruments. The yield on the benchmark 10-year gilts slumped nearly 4 basis points to 1.55 percent, the super-long 30-year bond yields plunged 3-1/2 basis points to 1.93 percent and the yield on the short-term 2-year traded 2 basis points lower at 0.65 percent.

The Japanese bonds traded nearly flat as investors eyed January consumer inflation data scheduled to be released on Thursday at 23:30GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.062 percent, the yield on the long-term 30-year note remained steady at 0.790 percent and the yield on short-term 2-year stood flat at -0.150 percent.

The Australian bonds snapped losses as investors covered previous short positions despite a better-than-expected wage price index data for the fourth-quarter of this year, released early today. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2 basis points to 2.88 percent, the yield on the long-term 30-year note fell nearly 1-1/2 basis points to 3.51 percent and the yield on short-term 2-year traded tad lower at 2.06 percent.

The New Zealand government bonds ended Wednesday’s session on a higher note after dairy product prices declined at the overnight GlobalDairyTrade auction, sliding for the first time this year after three consecutive increases. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 2.98 percent, the yield on 20-year also edged 1/2 basis point lower to 3.48 percent while the yield on short-term 2-year closed 2 basis points lower at 1.88 percent.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.