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Europe Roundup: Sterling near 4-week low as Brexit deadline looms, euro gains on ECB Coeure's comments, European shares rebound - Monday, March 11th, 2019

Market Roundup

  • Germany Jan 2019 current account - balance nsa decrease to 18.3 eur vs previous 21 eur
     
  • Germany Jan 2019 trade balance, eur, sa decrease to 18.5 eur vs previous 19.4 eur
     
  • Germany Jan 2019 imports mm sa increase to 1.5 % vs previous 1.2 %
     
  • Germany Jan 2019 industrial output mm decrease to -0.8 % (forecast 0.5 %) vs previous -0.4 %
     

Economic Data Ahead

  • (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that retail sales edged up 0.1 percent in January after easing 1.2 percent in December. While excluding autos, retail sales are likely to have gained 0.3 percent, after declining 1.8 percent in the previous month.
     
  • (1000 ET/1500 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.3 percent in December, after falling 0.1 percent in November.
     

Key Events Ahead

  • N/A The White House is set to release President Donald Trump's budget proposal.
     
  • (0800 ET/1300 GMT) BoE's Monetary Policy Committee member Jonathan Haskel delivers a speech in London
     
  • (1900 ET/2300 GMT) Federal Reserve Chairman Jerome Powell is scheduled to make videotaped welcoming remarks at National Community Reinvestment Coalition's Just Economy Conference.
     

FX Beat

DXY: The dollar index consolidated as soft U.S. employment growth data added to signs of a sharp slowdown in economic activity in the first quarter. The greenback against a basket of currencies traded flat at 97.34, having touched a high of 97.71 on Thursday, its highest since December. FxWirePro's Hourly Dollar Strength Index stood at 34.98 (Neutral) by 1000 GMT.

EUR/USD: The euro rose, extending previous session gains after the European Central Bank board member Benoit Coeure stated that the ECB's fresh stimulus measures are an adjustment to a new economic reality rather than reversing the course. The European currency traded 0.1 percent up at 1.1243, having touched a low of 1.1176 on Thursday, its lowest since June 2017. FxWirePro's Hourly Euro Strength Index stood at -19.52 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1269 (38.2% retracement of 1.1176 and 1.1496), a break above targets 1.1285 (50.0% retracement). On the downside, support is seen at 1.1200, a break below could drag it till 1.1176 (March 7 Low).

USD/JPY: The dollar rebounded from an 8-day low after Federal Reserve Chairman Jerome Powell said the current interest rates were appropriate and the central bank was not in a rush to change the level again as it scrutinizes the effects of slowing global economy on domestic conditions in the United States. The major was trading 0.1 percent up at 111.24, having hit a low of 110.74 on Friday, its lowest since February 28. FxWirePro's Hourly Yen Strength Index stood at 92.19 (Slightly Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. retail sales and business inventories. Immediate resistance is located at 111.49 (Feb. 28 High), a break above targets 112.13 (Mar. 5 High). On the downside, support is seen at 110.66 (Feb.28 Low), a break below could take it lower at 110.35 (Feb.27 Low).

GBP/USD: Sterling slumped, extending losses for the fourth straight session, as British Prime Minister Theresa May was warned by eurosceptic lawmakers that her Brexit deal would be rejected by parliament for a second time. Investors now await UK lawmakers vote on a European Union separation settlement due tomorrow. The major traded 0.2 percent down at 1.2983, having hit a low of 1.2960; it’s lowest since Feb.19. FxWirePro's Hourly Sterling Strength Index stood at -148.90 (Highly Bearish) 1000 GMT. Immediate resistance is located at 1.3051 (21-DMA), a break above could take it near 1.3109 (Feb. 20 High). On the downside, support is seen at 1.2924 (Feb. 5 Low), a break below targets 1.2854 (Feb. 7 Low). Against the euro, the pound was trading 0.4 percent down at 86.58 pence, having hit a low of 86.75 earlier, it’s lowest since Feb 25.

USD/CHF: The Swiss franc eased, reversing some of its previous session gains, as the greenback steadied following Federal Reserve Chairman Jerome Powell's comments. The major trades 0.1 percent up at 1.0086, having touched a high of 1.0124 on Thursday; it’s highest since November 13. FxWirePro's Hourly Swiss Franc Strength Index stood at -32.74 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0099 (February 11 High) and any break above will take the pair to next level till 1.0118 (Mar. 8 High). The near-term support is around 1.0001 (February 19 Low), and any close below that level will drag it till 0.9983 (February 25 Low).

Equities Recap

European shares rebounded as gains in the banking sector offset worries over a slowdown in the global economy.

The pan-European STOXX 600 index surged 0.4 percent at 371.85 points, while the FTSEurofirst 300 index rallied 0.4 percent to 1,463.62 points.

Britain's FTSE 100 trades 0.9 percent up at 7,172.24 points, while mid-cap FTSE 250 gained 0.4 to 19,119.04 points.

Germany's DAX rose 0.2 percent at 11,479.28 points; France's CAC 40 trades 0.2 percent higher at 5,240.21 points

Commodities Recap

Crude oil prices surged, boosted by a report showing a decline U.S. drilling activity and on comments from Saudi oil minister Khalid al-Falih that an end to OPEC-led supply cuts was unlikely before June. International benchmark Brent crude was trading 0.8 percent up at $66.19 per barrel by 1017 GMT, having hit a low of $63.99 on Friday, its lowest since Feb. 14. U.S. West Texas Intermediate was trading 0.9 percent higher at $56.50 a barrel, after falling as low as $54.50 on Friday, its lowest since the February 15.

Gold prices declined from an over 1-week peak hit last week as European equities surged, supported by improving risk sentiment. Spot gold was trading 0.2 percent down at $1,295.66 per ounce by 1026 GMT, having touched a high of $1,300.63 on Friday, its highest since March 1 and its biggest one-day gain since Feb. 19. U.S. gold futures slipped 0.2 percent to $1,296.70 an ounce.

Treasuries Recap

The U.S. Treasuries slumped during afternoon session ahead of the country’s retail sales data for the month of January, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasury yield jumped nearly 2-1/2 basis points to 2.648 percent, the super-long 30-year bond yields surged nearly 3 basis points to 3.037 percent and the yield on the short-term 2-year traded 1 basis point up at 2.473 percent.

The United Kingdom’s gilts surged during the afternoon session, ahead of the country’s manufacturing production for the month of January, scheduled to be held on March 12 by 09:30GMT. The yield on the benchmark 10-year gilts, fell 2 basis points to 1.17 percent, the super-long 30-year bond yields slipped nearly 1-1/2 basis points to 1.691 percent and the yield on the short-term 2-year edged 1-1/2 basis points down to 0.734 percent

The German bunds remained tad higher during European session on the first trading day of the week after the country’s industrial production data for the month of January and trade balance data for the similar month, released earlier today, disappointed market investors, thus weighing on bond yields. The German 10-year bond yields, which move inversely to its price, slipped 1-1/2 basis points to 0.060 percent, the yield on 30-year note edged nearly 1 basis point lower at 0.708 percent and the yield on short-term 2-year too traded tad lower at -0.539 percent.

The Japanese government bond yields slumped at the end of Asian session, amid a muted trading week that is scheduled to witness data of no major economic significance ahead of the Bank of Japan’s (BoJ) 2-day monetary policy meeting, which is due to be concluded on March 15 for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped nearly 3-1/2 basis points to -0.032 percent, the yield on the long-term 30-year remained tad lower at 0.581 percent and the yield on short-term 2-year plunged nearly 14-1/2 basis points to -0.143 percent.

The Australian government bonds remained range bound during Asian trading session as last week’s weak U.S. payrolls weighed on investor sentiment, raising fear of a global economic slowdown. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded 1/5 basis points higher at 2.028 percent, the yield on the long-term 30-year bond rose 1-1/2 basis points to trade at 2.616 percent and the yield on short-term 2-year traded tad higher at 1.678 percent.

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April 23 14:00 UTC Released

USNew Home Sales Chg MM

Actual

4.5 %

Forecast

-2.5 %

Previous

4.9 %

April 23 14:00 UTC Released

USUnits

Actual

0.692 %

Forecast

0.65 %

Previous

0.667 %

January 31 00:00 UTC 645140645140m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 645140645140m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 656960656960m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 645140645140m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 656960656960m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 645140645140m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 645140645140m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 645140645140m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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