Market Roundup
- United Kingdom Jan UK finance mortgage apps increase to 40.117 k vs previous 36.085 k (revised from 36.115 k)
- Switzerland Q4 non-farm payrolls increase to 4.962 mln vs previous 4.956 mln
- Switzerland Q4 non-farm payrolls increase to 4962 mln vs previous 4.956 mln
- British Labour leader Corbyn says Labour would legislate immediately to guarantee rights of EU citizens living in Britain
- British Labour leader Corbyn says Labour respects referendum result, priority is to get best deal for jobs and the economy
- British opposition Labour party leader Jeremy Corbyn says 20 months after Brexit referendum, country is in the dark about government plans
Economic Data Ahead
- (0830 ET/1330 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of January. The index stood at 0.27 in the prior month.
- (1000 ET/1500 GMT) The U.S. new home sales are expected to have increased 3.1 percent to a seasonally adjusted annual rate of 645,000 units in January, after falling 9.3 percent to a seasonally adjusted annual rate of 625,000 units in December.
- (1030 ET/1530 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of February. The index rose to 33.4 in the previous month.
- (1300 ET/1800 GMT) The Bank of England Deputy Governor for Financial StabilitySir Jon Cunliffe's speech.
Key Events Ahead
- (0830 ET/1330 GMT) Federal Reserve Bank of St. Louis President James Bullard gives a presentation on the U.S. economy and monetary policy before the National Association for Business Economics conference, "Promoting Sustained Growth: Policy Tensions and Risks," in Washington.
- (0900 ET/1400 GMT) European Central Bank President Mario Draghi participates in a regular hearing before the European Parliament's committee on economic affairs.
- (1500 ET/2000 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles speaks on "An Assessment of the U.S. Economy" at the same event.
FX Beat
DXY: The dollar index eased to a 6-day trough ahead of Federal Reserve Chairman Jerome Powell's testimony on the central bank's semi-annual report before the U.S. House of Representatives' Financial Services Committee. The greenback against a basket of currencies traded 0.4 percent down at 89.55, having touched a high of 90.24 on Thursday, its highest since Feb. 13. FxWirePro's Hourly Dollar Strength Index stood at -150.26 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro rebounded, reversing some of its previous session losses, ahead of the decision by the leading political parties in Germany on a coalition deal that could secure Angela Merkel a fourth term as chancellor and Italians vote in a national election on Sunday. The European currency traded 0.4 percent up at 1.2338, having touched a low of 1.2265 Thursday, its lowest since Feb. 14. FxWirePro's Hourly Euro Strength Index stood at 23.62 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2365 (10-DMA), a break above targets 1.2410. On the downside, support is seen at 1.2245 (Feb 7 Low), a break below could drag it lower 1.2205 (Feb 9 Low).
USD/JPY: The dollar fell to a 1-week low against the Japanese yen, weighed down by a fall in U.S. Treasury yields, while investors awaited several speeches by Fed policymakers. The major was trading 0.3 percent down at 106.57, having hit a high of 107.90 on Wednesday, its highest since Feb.14. FxWirePro's Hourly Yen Strength Index stood at 47.56 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. new home sales. Immediate resistance is located at 107.90 (Feb 21. High), a break above targets 108.50. On the downside, support is seen at 106.09, a break below could take it lower 105.60.
GBP/USD: Sterling rallied to a 10-day peak after comments from the Bank of England deputy governor reinforced the view that the bank would soon raise rates. Moreover, the opposition Labour party's support for a customs union after Brexit boosted the sentiment around the British currency. The major traded 0.6 percent up at 1.4055, having hit a low of 1.3858 on Thursday, it’s lowest since Feb 14. FxWirePro's Hourly Sterling Strength Index stood at 130.63 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.4104 (Feb 15 High), a break above could take it near 1.4167 (Jan 30 High). On the downside, support is seen at 1.3904 (Feb 21 Low), a break below targets 1.3845. Against the euro, the pound was trading 0.05 percent up at 87.85 pence, having hit a high of 87.71 pence earlier, it’s highest since Feb. 9.
USD/CHF: The Swiss franc rose, reversing most of its prior session losses, as the greenback fell to a 6-day low ahead of this week's Federal Reserve Chairman Jerome Powell's first congressional testimony on monetary policy and the economy. The major trades 0.3 percent down at 0.9335, having touched a high of 0.9409 on Thursday, it’s highest since Feb. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at 95.04 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9467 and any break above will take the pair to next level till 0.9500. The near-term support is around 0.9285) and any close below that level will drag it till 0.9210.
Equities Recap
European shares advanced, with gains across bourses and sectors, while the euro rose ahead of Italy's general election on Sunday.
The pan-European STOXX 600 index surged 0.5 percent to 382.97 points, while the FTSEurofirst 300 index rallied 0.5 percent to 1,500.33 points.
Britain's FTSE 100 trades 0.3 percent higher at 7,266.13 points, while mid-cap FTSE 250 gained 0.1 percent to 19,820.26 points.
Germany's DAX rose 0.6 percent at 12,552.79 points; France's CAC 40 trades 0.5 percent up at 5,346.06 points.
Commodities Recap
Crude oil prices declined after hitting their highest level in nearly three weeks, supported by comments from top oil exporter Saudi Arabia that it would continue to curb shipments in line with the OPEC-led effort to cut global supplies. International benchmark Brent crude was trading 0.1 percent down at $67.24 per barrel by 0947 GMT, having hit a high of $67.56 earlier, its highest since Feb. 7. U.S. West Texas Intermediate was trading 0.1 percent up at $63.49 a barrel, after rising as high as $63.88 on, its strongest since Feb. 7.
Gold prices rose to a 6-day high, supported by a weaker dollar as U.S. bond yields dipped, while investors were cautious ahead of Federal Reserve Chairman Jerome Powell's first congressional testimony. Spot gold was 0.8 percent up at $1,339.87 an ounce by 0951 GMT after rising to as high as $1,340.92, the highest since Feb. 20. U.S. gold futures were up 0.9 percent at $1,341.9 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.856 percent lower by 0.014 bps, while 5-year yield was 0.015 bps down at 2.603 percent.
The German 10-year government bond yield dipped to a 1-month low, ahead of a speech by European Central Bank chief Mario Draghi to the European Parliament. Germany's Bund yield briefly dipped to 0.64 percent, pulling back further from more than 2-year highs set earlier this month at around 0.81 percent. Peripheral bond yields in Italy were down 3-4 basis points.
The Australian government bond futures rose, with the three-year bond contract up 3.5 ticks at 97.935. The 10-year contract climbed 7.5 ticks to 97.2400.
The New Zealand government bonds gained, sending yields 5 basis points lower at the long end of the curve.
