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Europe Roundup: Sterling reverses gains ahead of Bexit parliamentary vote, greenback rises as investors eye U.S. CPI figures, European shares surge - Tuesday, March 12th, 2019

Market Roundup

  • EUR/USD 0.2%, USD/JPY 0.13%, GBP/USD 0.01%, EUR/GBP 0.2%
     
  • DXY -0.22%, DAX 0.04%, FTSE -0.13%, Brent 1.11%, Gold 0.2%
     
  • Brexit hangs in balance as parliament to vote on May's tweaked deal
     
  • DUP 'not averse' to Brexit vote delay, time to study May's tweaked deal
     
  • Great Britain Jan GDP Est 3M/3M, 0.2%, 0.2% f'cast, 0.2% prev
     
  • Great Britain Jan GDP Estimate MM, 0.5%, 0.2% f'cast, -0.4% prev
     
  • Great Britain Jan GDP Estimate YY, 1.4%, 1.2% f'cast, 1.0% prev
     
  • Great Britain Jan Industrial Output MM, 0.6%, 0.2% f'cast, -0.5% prev
     
  • Great Britain Jan Industrial Output YY, -0.9%, -1.3% f'cast, -0.9% prev
     
  • Great Britain Jan Manufacturing Output MM, 0.8%, 0.2% f'cast, -0.7% prev
     
  • Great Britain Jan Manufacturing Output YY, -1.1%, -1.9% f'cast, -2.1% prev
     
  • Great Britain Jan Goods Trade Balance GBP, -13.08 bln, -12.20 bln f'cast, -12.10 bln prev, -12.69 bln r'vsd
     
  • BOJ can be flexible in meeting its price goal - Japan finmin Aso
     
  • Japan firms wary of wage hike as economy wobbles amid trade war, global slowdown
     
  • China c.bank studying impact of rate overhaul on loan pricing- sources
     
  • China seeks to ease concerns over economy, data accuracy
     

Economic Data Ahead

  • (0830 ET/1230 GMT) The U.S. consumer price index likely increased 0.2 percent in February after an unchanged reading for the third straight month in January. In the 12 months through February, the CPI is expected to have risen 1.6 percent.  Excluding food and energy, the core CPI probably rose 0.2 percent, matching the gain in the previous month.
     
  • (1630 ET/2030 GMT) API reports its weekly crude oil stock.

Key Events Ahead

  • N/A The United Kingdom lawmakers are expected to vote on whether to accept Prime Minister Theresa May's Brexit deal, leave with no deal, or delay exiting the European Union.
     
  • (0745 ET/1245 GMT) Federal Reserve Governor Lael Brainard to speak on "Community Reinvestment Act Modernization" at the National Community Reinvestment Coalition's Just Economy Conference in Washington.
     

FX Beat

DXY: The dollar index steadied after data showed U.S. retail sales rose modestly in January, boosted by an increase in purchases of building materials and discretionary spending. The greenback against a basket of currencies traded 0.2 percent up at 97.17, having touched a high of 97.71 on Thursday, its highest since December. FxWirePro's Hourly Dollar Strength Index stood at -70.56 (Bearish) by 1000 GMT.

EUR/USD: The euro rose, hovering towards the 1.1300 handle, after data showed Greece's annual EU-harmonised inflation rate accelerated in February. The European currency traded 0.2 percent up at 1.1269, having touched a low of 1.1176 on Thursday, its lowest since June 2017. FxWirePro's Hourly Euro Strength Index stood at -33.48 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1298 (50.0% retracement of 1.1176 and 1.1496), a break above targets 1.1371 (61.8% 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 rose, extending previous session gains after Atlanta Federal Reserve's GDPNow forecast model showed the U.S. economy expanding at a 0.2 percent annualized rate in the first quarter, based on January data on domestic retail sales. The major was trading 0.1 percent down at 111.34, having hit a low of 110.74 on Friday, its lowest since February 28. FxWirePro's Hourly Yen Strength Index stood at -5.28 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. consumer price index and Fed Brainard's speech. Immediate resistance is located at 111.65 (Mar. 8 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 retreated from a near 2-week peak as investors turned cautious and braced for a vote at 1900 GMT that could decide how, and if, Britain leaves the EU in less than three weeks.  The major traded 0.4 percent down at 1.3087, having hit a low of 1.2960 on Monday; it’s lowest since Feb.19. FxWirePro's Hourly Sterling Strength Index stood at 68.69 (Bullish) 1000 GMT. Immediate resistance is located at 1.3319 (Feb. 28 High), a break above could take it near 1.3350 (Feb. 27 High). On the downside, support is seen at 1.3026 (Feb. 21 Low), a break below targets 1.2989 (Mar. 11 Low). Against the euro, the pound was trading 0.9 percent down at 86.27 pence, having hit a high of 84.74 earlier, it’s highest since May 2017.

USD/CHF: The Swiss franc rose, reversing some of its previous session losses, amid persisting concerns over the U.S.-China trade deal. The major trades 0.2 percent down at 1.0088, having touched a high of 1.0124 on Thursday; it’s highest since November 13. FxWirePro's Hourly Swiss Franc Strength Index stood at -112.28 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0124 (Mar. 7 High) and any break above will take the pair to next level till 1.0160 (Mar. 2017). 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 rallied after Britain and the European Union agreed changes to Britain's withdrawal agreement.

The pan-European STOXX 600 index surged 0.1 percent at 373.96 points, while the FTSEurofirst 300 index rallied 0.05 percent to 1,469.26 points.

Britain's FTSE 100 trades 0.1 percent up at 7,137.03 points, while mid-cap FTSE 250 gained 0.7 to 19,216.75 points.

Germany's DAX rose 0.05 percent at 11,546.98 points; France's CAC 40 trades 0.1 percent higher at 5,269.70 points

Commodities Recap

Crude oil prices rose over 1 percent, supported by Saudi Arabia's plan for further voluntary supply curbs in April and by a cut in oil exports from Venezuela due to a power outage.  International benchmark Brent crude was trading 1.0 percent up at $67.22 per barrel by 1040 GMT, having hit a low of $63.99 on Friday, its lowest since Feb. 14. U.S. West Texas Intermediate was trading 1.05 percent higher at $57.33 a barrel, after falling as low as $54.50 on Friday, its lowest since the February 15.

Gold prices surged as persisting concerns over the U.S.-China trade deal dented risk sentiment. Spot gold rose 0.2 percent to $1,296.24 per ounce by 1046 GMT, having touched a high of $1,300.63 on Friday, its highest since March 1. U.S. gold futures added 0.3 percent to $1,294.70 an ounce.

Treasuries Recap

The U.S. Treasuries suffered during afternoon session ahead of the country’s consumer price inflation (CPI) data for the month of February, scheduled to be released today at 12:30GMT, besides the 10-year note auction, also due today at 17:00GMT.The yield on the benchmark 10-year Treasury yield jumped 2 basis points to 2.661 percent, the super-long 30-year bond yields surged nearly 2 basis points to 3.050 percent and the yield on the short-term 2-year too traded nearly 2 basis points up at 2.494 percent.

The United Kingdom’s gilts slumped during the afternoon session, after the country’s manufacturing production for the month of January, cheered market investors, beating expectations as well as prior reading in December last month. However, The UK Parliament’s vote on the no-deal Brexit, scheduled for later today, shall provide further direction to the debt markets. The yield on the benchmark 10-year gilts, jumped nearly 5 basis points to 1.227 percent, the super-long 30-year bond yields surged nearly 3 basis points to 1.718 percent and the yield on the short-term 2-year climbed nearly 4 basis points to 0.777 percent.

The German bunds slumped during European session on the second trading day of the week as investors await to witness the country’s super-long 30-year auction, scheduled to be held on March 13 by 10:40GMT. The German 10-year bond yields, which move inversely to its price, surged nearly 4 basis points to 0.101 percent, the yield on 30-year note jumped nearly 4-1/2 basis points to 0.708 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at -0.527 percent.

The Japanese government bonds edged lower after the close of Asian session as investors drifted away from safe-haven assets following a rise in global equities tracking overnight strength in Wall Street. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1/2 basis point to -0.035 percent, the yield on the long-term 30-year also edged 1/2 basis point higher at 0.585 percent and the yield on short-term 2-year hovered around -0.149 percent.

The Australian government bonds traded a little lower during the Asian trading session as investors risk sentiment improved overnight following a rebound in the U.S. retail sales. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded 1/2 basis points higher at 2.034 percent, the yield on the long-term 30-year bond traded flat at 2.619 percent and the yield on short-term 2-year traded tad higher at 1.676 percent.

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April 19 12:30 UTC Released

USHouse Starts MM: Change

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-0.3 %

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-8.7 %

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1.162 Mln

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-1541 %

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-1541 %

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2016 bln ARS

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