Market Roundup
- EUR/USD -0.19%, USD/JPY -0.01%, GBP/USD -0.05%, EUR/GBP -0.16%
- DXY 0.17%, DAX 0.32 %, FTSE 0.25%, Brent 0.63%, Gold -0.08%
- ECB to end bond buys only when inflation is on sustainable path
- ECB's Angeloni says banks must get ready for end of ECB stimulus
- German lawmakers elect weakened Merkel to fourth term
- EZ Industrial Production MM Jan, -1.0%, forecast -0.4%, previous 0.4%
- EZ Industrial Production YY Jan, 2.7%, forecast 4.7%, previous 5.2%
- EZ Employment YY Q4, 1.6%, previous 1.7%
- Germany CPI Final MM Feb, 0.5%, forecast 0.5%, previous 0.5%
- Germany CPI Final YY Feb, 1.4%, forecast 1.4%, previous 1.4%
- Germany HICP Final MM Feb, 0.5%, forecast 0.5%, previous 0.5%
- Germany HICP Final YY Feb, 1.2%, forecast 1.2%, previous 1.2%
- New Trump tariff threat overshadows strong China factory, investment data
- BOJ signals confidence on smooth exit from easy policy
- Gold flat amid rising U.S. protectionism fears
- Oil rises as Chinese factory data boosts commodities
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. producer price index is likely to have increased 0.1 percent in February, while in the 12 months through the same period, it is expected to have advanced 2.8 percent. PPI excluding food and energy probably edged up 0.2 percent, compared with a 0.4 percent increase in January.
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that retail sales rose 0.3 percent in February after declining 0.3 percent in January. While excluding autos, retail sales are likely to have gained 0.4 percent, after staying unchanged in the previous month.
- (1000 ET/1400 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.6 percent in January, after rising 0.4 percent in December.
- (1000 ET/1400 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending March 9.
Key Events Ahead
- N/A Brazilian President Michel Temer and Finance Minister Henrique Meirelles are scheduled to speak on the second day of the World Economic Forum on Latin America, in Sao Paulo.
FX Beat
DXY: The dollar index rebounded after falling to a near 1-week low on the back of fears of a global trade war as well as the prospect of political uncertainty in the United States. The greenback against a basket of currencies trades 0.1 percent up at 89.80, having touched a high of 90.36 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at -60.94 (Bearish) by 1000 GMT.
EUR/USD: The euro declined after rising to a 6-day high earlier in the session, as Euro zone’s industrial production was weaker than expected in January, mainly due to a sharp drop in the output of energy. The economy's production fell 1.0 percent month-on-month in January for a 2.7 percent year-on-year rise. The European currency traded 0.2 percent down at 1.2366, having touched a high of 1.2412, its highest since Mar. 8. FxWirePro's Hourly Euro Strength Index stood at -23.04 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2420, a break above targets 1.2465 (Feb 14 High). On the downside, support is seen at 1.2314 (Previous Session Low), a break below could drag it lower 1.2290.
USD/JPY: The dollar eased against the Japanese yen on news that U.S. President Donald Trump seeks to impose $60 billion in tariffs on Chinese imports. The major was trading 0.1 percent down at 106.50, having hit a high of 107.29 on Tuesday, its highest since Feb. 28. FxWirePro's Hourly Yen Strength Index stood at -4.76 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. producer price index and retail sales. Immediate resistance is located at 107.20 (Mar 1), a break above targets 107.67 (Feb. 27). On the downside, support is seen at 105.89, a break below could take it lower 105.25.
GBP/USD: Sterling rallied to a 2-week high, as the U.S. dollar weakened following the sudden dismissal of U.S. Secretary of State Rex Tillerson. However, the upside in the major remained capped as investors refrained from taking big positions amid renewed concerns about the state of Brexit talks after the EU rejected some British proposals for a trade deal last week. The major traded 0.1 percent up at 1.3966, having hit a high of 1.3995 earlier, it’s highest since Feb. 27. FxWirePro's Hourly Sterling Strength Index stood at 66.76(Bullish) by 1000 GMT. Immediate resistance is located at 1.4010, a break above could take it near 1.4070. On the downside, support is seen at 1.3914 (21-DMA), a break below targets 1.3848 (10-DMA). Against the euro, the pound was trading 0.1 percent up at 88.62 pence, having hit a high of 88.47 pence on Monday, it’s highest since Mar 1.
USD/CHF: The Swiss franc retreated after rising to a 6-day high as the greenback against a basket of currencies rebounded from a near -1week low. The major trades 0.1 percent up at 0.9453, having touched a high of 0.9534 on Friday, it’s highest since Jan. 24. FxWirePro's Hourly Swiss Franc Strength Index stood at -5.12 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9475 (5-DMA) and any break above will take the pair to next level till 0.9581. The near-term support is around 0.9409 and any close below that level will drag it till 0.9383 (21-DMA).
Equities Recap
European shares edged up on the back of robust mining stocks, while the greenback fell to a near 1-week low after U.S. President Donald Trump threatened to impose $60 billion in tariffs on Chinese imports.
The pan-European STOXX 600 index advanced 0.4 percent to 379.82 points, while the FTSEurofirst 300 index surged 0.3 percent to 1,472.35 points.
Britain's FTSE 100 trades 0.2 percent higher at 7,154.28 points, while mid-cap FTSE 250 gained 0.1 percent to 19,890.59 points.
Germany's DAX rose 0.4 percent at 12,265.20 points; France's CAC 40 trades 0.4 percent up at 5,263.96 points.
Commodities Recap
Crude oil edged up after falling for two straight sessions as strong Chinese factory activity encouraged investor inflows into industrial commodities. International benchmark Brent crude was trading 0.4 percent up at $64.94 per barrel by 1016 GMT, having hit a low of $63.41 on Thursday, its lowest since Mar. 2. U.S. West Texas Intermediate was trading 0.3 percent up at $60.99 a barrel, after falling as low as $59.99 on Thursday, its weakest since Feb. 15.
Gold prices eased after rising to a 1-week high earlier in the session on a weaker dollar following U.S. Secretary of State Rex Tillerson's sudden dismissal, which invigorated concerns of protectionist policies hampering global risk appetite. Spot gold declined 0.1 percent at $1,325.03 per ounce at 1018 GMT, having hit a high of $1,329.91 an ounce earlier, its highest since Mar. 7. U.S. gold futures for April delivery fell 0.1 percent to $1,326.30 per ounce.
Treasuries Recap
The U.S. Treasuries climbed after President Donald Trump threw US diplomacy into fresh turmoil on Tuesday by firing his secretary of state, Rex Tillerson – said to have discovered his fate via Twitter – and promoting two officials condemned by human rights groups for endorsing or overseeing torture. The yield on the benchmark 10-year Treasuries fell 1 basis point to 2.83 percent, the super-long 30-year bond yields also slipped nearly 1 basis point to 3.08 percent and the yield on the short-term 2-year hovered around 2.25 percent.
The German bunds remained mixed after the country’s consumer price inflation index (CPI) for the month of February met market expectations, also unchanged from that in January. The German 10-year bond yields, which move inversely to its price, hovered around 0.62 percent, the yield on 30-year note slipped to 1.27 percent and the yield on short-term 2-year traded nearly flat at 0.57 percent.
The New Zealand government bonds jumped at the time of closing Wednesday even as market participants are anticipating a slight rise in the country’s gross domestic product (GDP) for the fourth quarter of last year, scheduled to be released today by 21:45GMT. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 4-1/2 basis points to 2.95 percent, the yield on 20-year also plunged 4-1/2 basis points to 3.45 percent and the yield on short-term 2-year too closed 1 basis point lower at 1.96 percent
The Japanese government bonds remained flat after Bank of Japan (BoJ) Governor Haruhiko Kuroda voiced his opinion in favour of the central bank’s smooth exit from its ultra-loose monetary policy, but said it was too early to debate specifics with inflation still distant from its target. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note remained steady at 0.75 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.14 percent
The Australian bonds rallied following firmness in the U.S. Treasuries as lower inflation data and news that President Donald Trump had ousted Secretary of State Rex Tillerson pushed investors towards safe-haven buying. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 6 basis points to 2.760 percent, the yield on the long-term 30-year note dipped 5 basis points to 3.349 percent and the yield on short-term 2-year down 3-1/2 basis points to 2.008 percent.
