Market Roundup
- Eurozone Feb inflation, flash yy increase to 1.2 % (forecast 1.2 %)
- Eurozone Feb inflation ex food & energy flash increase to 1.2 % (forecast 1.1 %)
- Germany Feb unemployment total SA decrease to 2.393 mln vs previous 2.415 mln
- Germany Feb unemployment total NSA decrease to 2.546 mln vs previous 2.57 mln
- Germany Feb unemployment rate SA stays flat at 5.4 % (forecast 5.4 %) vs previous 5.4 %
- Germany Feb unemployment change SA increase to -22 k (forecast -15 k) vs previous -25 k
- Switzerland Feb investor sentiment decrease to 25.8 vs previous 34.5
- Switzerland Feb KOF indicator increase to 108 (forecast 106.1) vs previous 107.6 (revised from 106.9)
- France Jan producer prices mm increase to 0.1 %
- France Q4 GDP detailed QQ stays flat at 0.6 % (forecast 0.6 %) vs previous 0.6 %
- France Feb CPI (EU norm) prelim yy increase to 1.4 % (forecast 1.5 %)
- France Jan consumer spending mm decrease to -1.9 % (forecast 0.4 %) vs previous -1.2 %
- France Feb CPI (EU norm) prelim yy increase to 1.3 % (forecast 1.5 %)
- Spain Dec current account balance decrease to 2.64 bln eu vs previous 3.04 bln eu
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that preliminary gross domestic product increased at a 2.5 percent annual rate in the fourth quarter compared to the previous estimate of a 2.6 percent annual rate.
- (0830 ET/1330 GMT) The U.S. Commerce Department releases the preliminary personal consumption expenditures (PCE) price index for the fourth quarter. The index is expected to rise 2.8 percent from 1.5 percent in the previous quarter, while core PCE is likely to increase 1.9 percent after gaining 1.3 percent in the third quarter.
- (0830 ET/1330 GMT) The Statistics Canada releases its Raw Material Price Index for the month of January. The index posted a decline of 0.9 percent in December.
- (0830 ET/1330 GMT) The Statistics Canada will report its industrial producer prices for the month of January. The indicator fell 0.1 percent in the prior month.
- (0945 ET/1445 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions rose to 55.0 in January from 54.6 last month.
- (1000 ET/1500 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 0.3 percent in January after rising 0.5 percent in December.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 23.
- (1730 ET/2230 GMT) Australian Industry Group (AiG) releases its performance of manufacturing index for the month of February. The index stood at 58.7 in January.
- (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending February 23.
- (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending February 23.
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index rallied to a near 3-week high after an upbeat assessment of the U.S. economy by Federal Reserve Chairman Jerome Powell's strengthened the case of more interest rate hikes in 2018. The greenback against a basket of currencies traded 0.1 percent up at 90.46, having touched a high of 90.55 earlier, its highest since Feb. 9. FxWirePro's Hourly Dollar Strength Index stood at 101.94 (Highly Bullish) by 1000 GMT.
EUR/USD: The euro fell to a 6-week after data showed Eurozone consumer price growth slowed as expected in February. The economy's inflation is estimated to 1.2 percent year-on-year in February, down from 1.3 percent in January. The European currency traded 0.1 percent down at 1.2219, having touched a low of 1.2198, its lowest since Jan. 18. FxWirePro's Hourly Euro Strength Index stood at -22.41 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2291 (5-DMA), a break above targets 1.2356 (10-DMA). On the downside, support is seen at 1.2205 (Feb 9 Low), a break below could drag it lower 1.2165.
USD/JPY: The dollar declined against the Japanese yen after the Bank of Japan reduced the amount they spend on long-dated government bonds to 70 billion Yen from 80 billion. The major was trading 0.2 percent down at 107.06, having hit a high of 107.90 last week, its highest since Feb.14. FxWirePro's Hourly Yen Strength Index stood at 99.95 (Slightly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. gross domestic product and pending home sales. Immediate resistance is located at 107.90 (Feb 21. High), a break above targets 108.50. On the downside, support is seen at 106.09, a break below could take it lower 105.60.
GBP/USD: Sterling slumped below the 1.3800 handle after sentiment among British consumers and businesses worsened slightly in February, indicating that the economy remains steady but slow course ahead of Brexit. The major traded 0.2 percent down at 1.3879, having hit a low of 1.3858 on Thursday, it’s lowest since Feb 14. FxWirePro's Hourly Sterling Strength Index stood at 8.21 (Neutral) by 1000 GMT. Immediate resistance is located at 1.3942 (5-DMA), a break above could take it near 1.3989 (21-DMA). On the downside, support is seen at 1.3858 (Previous Session Low), a break below targets 1.3800 (Feb 14 Low). Against the euro, the pound was trading 0.2 percent down at 88.07 pence, having hit a high of 87.71 pence on Thursday, it’s highest since Feb. 8.
USD/CHF: The Swiss franc slumped to a 3-week low as the greenback rallied on Federal Reserve Chairman Jerome Powell's testimony to U.S. lawmakers. The major trades 0.4 percent up at 0.9422, having touched a high of 0.9430 earlier, it’s highest since Feb. 8. FxWirePro's Hourly Swiss Franc Strength Index stood at -55.41 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9467 and any break above will take the pair to next level till 0.9500. The near-term support is around 0.9339 (21-DMA) and any close below that level will drag it till 0.9281.
Equities Recap
European shares tumbled, following a batch of poor corporate results, while greenback rallied to a near 3-week high after comments from new Federal Reserve Chairman Jerome Powell changed investors' perceptions of the pace of U.S. interest rate hikes.
The pan-European STOXX 600 index declined 0.2 percent to 381.50 points, while the FTSEurofirst 300 index slumped 0.2 percent to 1,495.94 points.
Britain's FTSE 100 trades 0.2 percent lower at 7,265.07 points, while mid-cap FTSE 250 plunged 0.4 percent to 19,794.67 points.
Germany's DAX fell 0.2 percent at 12,466.77 points; France's CAC 40 trades 0.3 percent down at 5,329.42 points.
Commodities Recap
Crude oil prices rose as weak Chinese and Japanese industrial data triggered concerns of an economic slowdown that could lower oil demand. International benchmark Brent crude was trading 0.2 percent up at $66.58 per barrel by 1015 GMT, having hit a high of $67.86 the day before, its highest since Feb. 7. U.S. West Texas Intermediate was trading 0.3 percent up at $63.00 a barrel, after rising as high as $64.21 on Monday, its strongest since Feb. 7.
Gold prices rose after falling more than 1 percent in the previous session as investors interpreted comments from Federal Reserve Chairman Jerome Powell to mean that the United States may raise interest rates more frequently than anticipated in 2018. Spot gold advanced 0.1 percent at $1,320.09 an ounce at 1018 GMT, having fallen to its lowest level since Feb. 9 at $1,313.36 in the prior session. U.S. gold futures were up 0.1 percent at $1,319.3 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.895 percent lower by 0.013 bps, while 5-year yield was 0.001 bps down at 2.668 percent.
The Euro zone bond yields edged down in early trade, with the German10-year government bond yield down around a basis point at 0.67 percent and not far from one-month lows hit on Monday.
The Japanese government bond prices edged lower oas the market was weighed down following a retreat by U.S. Treasuries. The two-year yield rose 0.5 basis point to minus 0.160 percent and the benchmark 10-year yield climbed 0.5 basis point to 0.045 percent. The 40-year yield stood unchanged at 0.885 percent after dropping to 0.875 percent on Friday, the lowest since January 2017.
The Australian government bond futures followed Treasuries lower, with the three-year bond contract off 4.5 ticks at 97.890. The 10-year contract eased 4.5 ticks to 97.2100. The New Zealand government bonds eased, sending yields 2.5 basis points higher at the long end of the curve.
