Market Roundup
- EUR/USD -0.13%, USD/JPY -0.44%, GBP/USD 0.05%, EUR/GBP -0.21%
- DXY -0.08%, DAX -1.02 %, FTSE -0.61%, Brent -0.58%, Gold -0.15%
- U.S. Congress scrambles to pass funding bill before Friday deadline
- Trump set for China tariff announcement on Thursday, trade war fears grow
- EZ Markit Manufacturing Flash PMI Mar, 56.6, forecast 58.1, previous 58.6
- EZ Markit Service Flash PMI Mar, 55.0, forecast 56.0, previous 56.2
- EZ Markit Composite Flash PMI Mar, 55.3, forecast 56.7, previous 57.1
- EZ Current Account NSA,EUR Jan, 12.8 bln, previous 45.8 bln
- EZ Current Account SA, EUR Jan, 37.6 bln, previous 29.9 bln
- Germany Markit Composite Flash PMI Mar, 55.4, forecast 57.0, previous 57.6
- Germany Ifo Business Climate Mar, 114.7, forecast 114.8, previous 115.4
- Germany Ifo Current Conditions Mar, 125.9, forecast 125.7, previous 126.3
- Germany Ifo Expectations Mar, 104.4, forecast 104.4, previous 105.4
- Bank of England expected to keep path clear for May rate rise
- Great Britain Retail Sales YY Feb, 1.5%, forecast 1.3%, previous 1.6%
- Great Britain Retail Sales Ex-Fuel YY Feb, forecast 1.1%, previous 1.2%
- Gold hovers near 2-wk high on weaker dollar after Fed rate view
- Oil loses ground as rising U.S. output threatens to disrupt tightening market
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 1,000 to a seasonally adjusted 225,000 for the week ended Mar. 16, while continuing claims for the week ended Mar. 9 is expected to rise to 1.890 million from previous 1.879 million.
- (0900 ET/1300 GMT) The Federal Housing Finance Agency releases its housing price index for the month of January. The index gained 0.3 percent in February.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of March. The index is likely to show a final reading of 55.5 after posting 55.3 in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit preliminary final U.S. composite PMI for the month of March. The index posted a final reading of 55.8 in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 55.8 in March after printing a final reading of 55.9 in February.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending March 16.
- (1100 ET/1500 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of March. The indicator stood at 21 in the previous month.
Key Events Ahead
- (1215 ET/1615 GMT) Norway Central Bank Governor Oystein Olsen gives a speech in Washington D.C.
- (1300 ET/1700 GMT) Bank of England Deputy Governor Dave Ramsden gives speech at HM Treasury annual fintech conference in London
- (1445 ET/1845 GMT) Bank of Canada Senior Deputy Governor Carolyn Wilkins speaks at Rotman School of Management in Toronto, Canada
FX Beat
DXY: The dollar index plunged to a 4-week low after the Federal Reserve issued a forecast for future policy that was less hawkish than expected. The greenback against a basket of currencies 0.3 percent down at 89.74, having touched a low of 89.40 earlier, its lowest since Feb. 20. FxWirePro's Hourly Dollar Strength Index stood at -48.99 (Neutral) by 1000 GMT.
EUR/USD: The euro declined after rising to a 1-week high earlier in the session after data showed Eurozone businesses rounded off the first quarter of 2018 with their slowest growth in over a year, much weaker than expected. The economy's Markit's composite flash PMI slumped to 55.3 March, below estimates of 56.7 and from February's final reading of 57.1. The European currency traded 0.1 percent down at 1.2325, having touched a high of 1.2387 earlier, its highest since Mar. 15. FxWirePro's Hourly Euro Strength Index stood at -69.81 (Bearish) by 1000 GMT. Immediate resistance is located at 1.2387 (Mar 22 High), a break above targets 1.2412 (Mar. 14 High). On the downside, support is seen at 1.2301 (5-DMA), a break below could drag it lower 1.2251 (Mar. 2 Low).
USD/JPY: The dollar slumped to a 2-week low against the Japanese yen, as the Fed raised interest rates and forecast at least two more hikes in 2018, contrary to three more increases as expected. The major was trading 0.2 percent down at 105.80, having hit a low of 105.57 earlier, its lowest since Mar. 7. FxWirePro's Hourly Yen Strength Index stood at -16.85 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, housing price index and Markit PMI's. Immediate resistance is located at 106.74 (Mar. 14 Low), a break above targets 106.97 (Mar 12 High). On the downside, support is seen at 105.45 (Mar. 7 Low), a break below could take it lower 105.25 (Mar. 2 Low).
GBP/USD: Sterling rallied to a 7-week peak as British retail sales volumes rose in February, while investors prepared for a Bank of England meeting at which the central bank is expected to flag a rate rise in May. The economy's retail sales volumes rose 0.8 percent in February from January, above the forecast for a monthly rise of 0.4 percent, and after declining 0.2 percent in January. The major traded 0.1 percent up at 1.4147, having hit a high of 1.4180 earlier, it’s highest since Feb. 2. FxWirePro's Hourly Sterling Strength Index stood at 57.86 (Bullish) by 1000 GMT. Immediate resistance is located at 1.4233 (Jan 31 High), a break above could take it near 1.4278. On the downside, support is seen at 1.4008 (5-DMA), a break below targets 1.3952 (10-DMA). Against the euro, the pound was trading 0.2 percent up at 87.09 pence, having hit a high of 87.04 earlier, it’s highest since Jan 25.
USD/CHF: The Swiss franc rose to a 1-week peak as the greenback eased after the Fed raised U.S. interest rates but signalled two more hikes for 2018. The major trades 0.2 percent down at 0.9477, having touched a low of 0.9459, it’s lowest since Mar. 15. FxWirePro's Hourly Swiss Franc Strength Index stood at 79.90 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9520 (5-DMA) and any break above will take the pair to next level till 0.9569 (Mar 20 High). The near-term support is around 0.9443 (21-DMA) and any close below that level will drag it till 0.944 (Mar. 14 Low).
Equities Recap
European shares slumped to a 2-week low, while the greenback tumbled to a 4-week trough as the U.S. prepared to announce tariffs on Chinese imports.
The pan-European STOXX 600 index plunged 0.8 percent to 371.90 points, while the FTSEurofirst 300 index declined 0.8 percent to 1,454.85 points.
Britain's FTSE 100 trades 0.5 percent lower at 7,003.76 points, while mid-cap FTSE 250 shed 0.4 percent to 19,588.48 points.
Germany's DAX fell 1.1 percent at 12,172.32 points; France's CAC 40 trades 0.9 percent declined at 5,189.41 points.
Commodities Recap
Crude oil prices declined, reversing some of its previous session gains as the persistent rise in U.S. crude production threatened to undermine efforts led by producer cartel OPEC to tighten the market. International benchmark Brent crude was trading 1.3 percent down at $68.88 per barrel by 0945 GMT, having hit a high of $69.82 on Wednesday, its highest since Feb. 2. U.S. West Texas Intermediate was trading 1.2 percent down at $64.71 a barrel, after rising as high as $65.69 earlier, its strongest since Feb 2.
Gold prices slumped after rising to a near two-week highs in the previous session on a weaker dollar after the U.S. Federal Reserve disappointed investors, who were expecting more hawkish comments on interest rate rises. Spot gold eased 0.2 percent to $1,329.17 per ounce at 0943 GMT, having hit a high of $1,336.49 an ounce on Wednesday, its highest since Mar. 7. U.S. gold futures for April delivery rose 0.7 percent to $1,331.10 per ounce.
Treasuries Recap
The U.S. Treasuries surged on slight pessimism after the Federal Reserve in its monetary policy meeting, signalled three rate hikes this year, with only two being left, in contrast to market anticipations of four such rate hikes in 2018. The yield on the benchmark 10-year Treasuries slumped nearly 6 basis points to 2.85 percent, the super-long 30-year bond yields plunged 5-1/2 basis points to 3.07 percent and the yield on the short-term 2-year traded nearly 1 basis point lower at 2.30 percent.
The UK gilts climbed after investors have largely shrugged-off the country’s better-than-expected retail sales for the month of February ahead of the Bank of England’s (BoE) monetary policy decision, scheduled to be unveiled today by 09:30GMT for added direction in the debt market. The yield on the benchmark 10-year gilts, slumped 4-1/2 basis points to 1.48 percent, the super-long 30-year bond yields also plunged 4-1/2 basis points to 1.76 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points lower at 0.91 percent.
The German bunds surged during European session after the country’s manufacturing PMI for the month of March missed market expectations, also falling as compared to the reading in February. However, the Ifo business climate index was in line with consensus estimates, although not rendering much reaction to the debt market. The German 10-year bond yields, which move inversely to its price, slumped nearly 4 basis points to 0.55 percent, the yield on 30-year note also plunged nearly 4 basis points to 1.18 percent and the yield on short-term 2-year too traded nearly 1-1/2 basis points lower at -0.58 percent.
The New Zealand government bonds gained at the times of closing after the Reserve Bank of New Zealand’s (RBNZ) Acting Governor Grant Spencer hinted that a number of uncertainties continue to hover and the central bank may need to adjust monetary policy accordingly. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 3 basis points to 2.83 percent, the yield on 20-year plunged 2 basis points to 3.35 percent and the yield on short-term 2-year closed 1/2 basis point lower at 1.92 percent.
The Japanese government bonds gained after manufacturing PMI declined to nine-month low for the month of February. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1/2 basis point to 0.036 percent, the yield on the long-term 30-year note slid 1/2 basis point to 0.755 percent and the yield on short-term 2-year down 1/2 basis point lower at -0.15 percent
The Australian government bonds gained after unemployment rate for the month of February ditches market expectations, rising to 5.6 percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.700 percent, the yield on the long-term 30-year note traded 2 basis points lower at 3.278 percent and the yield on short-term 2-year slid 1/2 basis point to 2.038 percent.
