Market Roundup
- EUR/USD 0.05%, USD/JPY -0.02%, GBP/USD 0.5%, EUR/GBP -0.48%
- DXY -0.12%, DAX -1.07 %, FTSE -1.31%, Brent -0.26%, Gold -0.04%
- Putin savours big victory after winning six more years at Russia's helm
- EU, UK reach broad deal on Brexit transition terms- WSJ
- U.S. tariffs, China trade tensions overshadow G20 finance meeting
- WTO chief says U.S. wants reform in trade body, has raised concerns
- UK households report fastest income growth since 2016 - IHS Markit
- Italy industry output slumps in January after three straight rises
- China forms new economic team as President Xi kicks off second term
- Oil prices fall as increased U.S. drilling points to higher output
- Gold falls for fourth day as dollar stays firm ahead of Fed meeting
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- (0940 ET/1340 GMT) Atlanta Fed President Raphael Bostic participates in a chat, "Community Reinvestment Act", before the National Interagency Community Reinvestment Conference co-organized by the Federal Reserve Banks of Atlanta, Chicago, and San Francisco, in Miami.
FX Beat
DXY: The dollar index steadied as financial markets braced for the first rate hike of the year from the U.S. Federal Reserve. The greenback against a basket of currencies trades flat at 90.20, having touched a high of 90.38 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at 21.28 (Neutral) by 1000 GMT.
EUR/USD: The euro steadied after tumbling to an over 2-week low earlier in the session, as European Central Bank policymakers Francois Villeroy de Galhau, Klaas Knot and Jens Weidmann struck an optimistic tone on the outlook for eurozone inflation on Sunday despite stubbornly slow price growth so far this year. The European currency traded 0.1 percent up at 1.2299, having touched a low of 1.2258 earlier, its lowest since Mar. 2. FxWirePro's Hourly Euro Strength Index stood at -37.65 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2336 (5-DMA), a break above targets 1.2383 (Mar. 15 High). On the downside, support is seen at 1.2251 (Mar. 2 Low), a break below could drag it lower 1.2221 (Feb 28 Low).
USD/JPY: The dollar rose above the 106.00 handle, reversing some of its previous session losses ahead of this week's Federal Reserve policy meeting, where it is expected to raise rates to between 1.5 percent and 1.75 percent. The major was trading 0.2 percent up at 106.15, having hit a low of 105.60 the session before, its lowest since Mar. 7. FxWirePro's Hourly Yen Strength Index stood at 40.03 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of FOMC Member Bostic's speech. Immediate resistance is located at 106.31 (5-DMA), a break above targets 107.04 (Mar 9 High). On the downside, support is seen at 105.60 (Previous Session Low), a break below could take it lower 105.25.
GBP/USD: Sterling rallied to a 3-week peak above the 1.4000 handle on optimism that Britain expects to agree on a transition deal with the European Union for the period immediately after it leaves the bloc. The major traded 0.5 percent up at 1.4019, having hit a high of 1.4044 earlier, it’s highest since Feb. 26. FxWirePro's Hourly Sterling Strength Index stood at 134.90 (Slightly Bullish) by 1000 GMT. Immediate resistance is located at 1.4070, a break above could take it near 1.4104. On the downside, support is seen at 1.3941 (5-DMA), a break below targets 1.3899 (10-DMA). Against the euro, the pound was trading 0.5 percent down at 87.60 pence, having hit a high of 87.54 pence earlier, it’s highest since Feb 8
USD/CHF: The Swiss franc slumped to a near 2-month low as the greenback rallied ahead of U.S. Federal Reserve meeting this week. The major trades 0.2 percent up at 0.9531, having touched a high of 0.9551 earlier, it’s highest since Jan. 24. FxWirePro's Hourly Swiss Franc Strength Index stood at -76.00 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9633 (Jan. 23 High) and any break above will take the pair to next level till 0.9666 (Jan 18 High). The near-term support is around 0.9479 (5-DMA) and any close below that level will drag it till 0.9412 (21-DMA).
Equities Recap
European shares tumbled, while the greenback rose as investors remained cautious ahead of U.S. Federal Reserve meeting on Wednesday, which marks the debut for new Fed Chair Jerome Powell, and a likely interest rate hike.
The pan-European STOXX 600 index slumped 0.7 percent to 375.09 points, while the FTSEurofirst 300 index plunged 0.7 percent to 1,467.78 points.
Britain's FTSE 100 trades 1.3 percent lower at 7,074.87 points, while mid-cap FTSE 250 declined 0.3 percent to 19,739.86 points.
Germany's DAX eased 1.05 percent at 12,259.76 points; France's CAC 40 trades 0.8 percent fell at 5,240.04 points.
Commodities Recap
Crude oil prices declined after rising to a 2-1/2 week high in the previous session as increased drilling in the United States pointed to more output, raising concerns about a return of oversupply. International benchmark Brent crude was trading 0.05 percent down at $66.04 per barrel by 1033 GMT, having hit a high of $66.40 on Friday, its highest since Feb. 28. U.S. West Texas Intermediate was trading 0.1 percent down at $62.11 a barrel, after rising as high as $62.51 last week, its strongest since Mar. 7.
Gold prices extended losses into a fourth session to hit a more than two-week low, as expectations that the U.S. Federal Reserve would raise interest rates this week supported the greenback. Spot gold eased 0.1 percent at $1,311.58 per ounce at 1036 GMT, having hit a low of $1,307.71 an ounce earlier, its lowest since Mar. 1. U.S. gold futures for April delivery dropped 0.2 percent to $1,309.40 per ounce.
Treasuries Recap
The U.S. Treasuries fell in a muted trading session ahead of the Federal Open Market Committee’s (FOMC) monetary policy meeting, followed by a press conference, scheduled to be held on March 21 by 18:00GMT and 18:30GMT respectively. The yield on the benchmark 10-year Treasuries surged 1-1/2 basis points to 2.86 percent, the super-long 30-year bond yields jumped 2 basis points to 3.10 percent and the yield on the short-term 2-year traded nearly 1 percent higher at 2.30 percent.
The UK gilts slumped even as markets hope to see a fall in the country’s consumer price inflation for the month of February, scheduled to be released on March 20 by 09:30GMT. The yield on the benchmark 10-year gilts, jumped nearly 3 basis points to 1.45 percent, the super-long 30-year bond yields climbed 2 basis points to 1.81 percent and the yield on the short-term 2-year traded nearly 2 basis points higher at 0.83 percent
The German bunds slipped as investors wait to watch the country’s 10-year auction, scheduled to be held on March 21, besides, the ZEW economic sentiment index for the month of March, due for release on March 20 for detailed direction in the debt market. The German 10-year bond yields, which move inversely to its price, rose nearly 1 basis point to 0.57 percent, the yield on 30-year note surged 1 basis point to 1.23 percent and the yield on short-term 2-year hovered around -0.58 percent.
The New Zealand government bonds ended Monday’s session on a higher note as political tensions and disturbances continue to hover within the U.S. administration after President Donald Trump took to firing a number of officials in the last week on various charges. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 3-1/2 basis points to 2.87 percent, the yield on 20-year also plunged 3-1/2 basis points to 3.37 percent and the yield on short-term 2-year too closed 2-1/2 basis points lower at 1.91 percent
The Japanese government bonds edged slightly higher at the start of the trading week after the Bank of Japan (BoJ) reiterated, in its March Summary of Opinions that it will continue to pursue quantitative easing if it fails to achieve the 2 percent inflation target. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped to 0.04 percent, the yield on the long-term 30-year note also fell 1/2 basis point to 0.75 percent and the yield on short-term 2-year traded tad lower at -0.14 percent.
The Australian government bonds slumped at the start of the week as investors eye the Federal Reserve interest rate hike this week. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 2.712 percent, the yield on the long-term 30-year note also jumped 2 basis points to 3.298 percent and the yield on short-term 2-year climbed 11/2 basis points to 1.980 percent.
