Market Roundup
- GBP/USD -0.35%, EUR/GBP +0.7%, USD/JPY -0.09%
- DXY -0.11%, DAX -0.40%, Brent +02.4%, Iron -1.5%, Gold -0.45%
- EZ Final Feb Composite PMI 56.0 vs 56.0 previous, 56.0 expected
- UK Feb Service PMI 53.3 vs 54.5 previous, 54.1 expected
- EZ Jan Retail Sales 1.2% y/y vs revised 1.2% previous, 1.6% expected
- Fillon spokesman says stepping down from campaign
- UK PM faces MP Brexit rebellion - Telegraph
- UK lawmakers say May’s industrial plan falls short, risks mistakes
- ECB Lautschlaeger sees no Frexit after Brexit, or stocks crash
- Japan FinMin Aso – Wants to debate rules for free-fair trade with US
- Japan Jan n/wide core CPI +0.1% y/y up for first time on y/y basis since Dec ‘15
- BoJ reduces buying of 25-40 year JGBs by Y20 billion to Y100 billion
- China Feb Caixin services PMI 52.6, Jan 53.1, expansion slowest in 4-months
Economic Data Ahead
- (0945 ET/1445 GMT) Financial firm Markit releases final U.S. composite PMI for the month of February. The index posted a final reading of 54.3 in the previous month.
- (0945 ET/1445 GMT) Markit Economics reports final U.S. services PMI for the month of February. The index posted a final reading of 53.9 in January.
- (1000 ET/1500 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index eased to a final reading of 56.2 in February from 56.5 in January.
- (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (1015 ET/1515 GMT) Chicago Fed President Charles Evans and Richmond Fed chief Jeffrey Lacker participate in a discussion, "Inflation Dynamics in Stable and Unstable Policy Regimes: Comment on 'Deflating Inflation Expectations'.
- (1115 ET/1615 GMT) Federal Reserve Board Governor Jerome Powell speech.
- (1145 ET/1645 GMT) FedTrade operation 30-year Ginnie Mae max $1.325 bln
- (1215 ET/1715 GMT) Dallas Fed chief Robert Kaplan will moderate a panel at the 2017 U.S. Monetary Policy Forum, in New York.
- (1230 ET/1730 GMT) Federal Reserve Vice Chairman Stanley Fischer gives a keynote address on "Fed Monetary Policy Decision-Making" at the 2017 U.S. Monetary Policy Forum, in New York.
- (1300 ET/1800 GMT) Federal Reserve Chair Janet Yellen speaks on the economic outlook at the Executives Club of Chicago.
- (1445 ET/1945 GMT) Bank of Canada Senior Deputy Governor Carolyn Wilkins will give remarks on a panel at Yale Law School.
FX Beat
DXY: The dollar eased against the euro after a poll showed French presidential candidate Macron beating Le Pen in the first round of voting. The greenback against a basket of currencies traded 0.1 percent down at 102.00, having hit a high of 102.26 on Thursday, it’s strongest since Jan. 11. FxWirePro's Hourly Dollar Strength Index stood at 122.40 (Highly Bullish) by 1000 GMT.
EUR/USD: The euro rose after declining in the previous three sessions, as the greenback eased following a sharp fall in the U.S. Treasury yields. However, the upside remained capped as downbeat Eurozone's Markit service PMI, which came in at 55.3 in February, below the forecast of 54.2 and previous 54.5 weighed on euro bulls’ sentiment. The European currency traded 0.16 percent up at 1.0521, having hit a low of 1.0494 the day before, it’s weakest since Feb. 22. FxWirePro's Hourly Euro Strength Index stood at 66.57 (Bullish) by 0900 GMT. On the lower side, any break below 1.04900 will drag the pair till 1.04500/ 1.03450. On the higher side, any break above 1.0530 will take it till 1.0559 (200- H MA) / 1.05717/ 1.0630 (Feb 28 high).
USD/JPY: The dollar tumbled, halting its 4-day winning streak as a modest retracement in the U.S. treasury bond yields and a fresh bout of risk aversion strengthened the Japanese yen. However, increasing expectations of Federal Reserve interest rate hike in March meeting supported the bid tone around the major. The major trades 0.1 percent lower at 114.27, having hit a peak of 114.59 in the previous session, its highest since Feb. 15. FxWirePro's Hourly Yen Strength Index stood at 31.36 (Neutral) by 1000 GMT. The minor resistance is around 114.95 (Feb 15th high) and any break above will take the pair till 115.94. On the lower side, minor support is around 113.14 (4H Kijun-Sen) and any break below 112 will drag it till 111.65/111.
GBP/USD: Sterling slumped, extending losses for the sixth straight day after weaker than expected Britain's services PMI reading indicated growth slowing to a five-month low. The major fell to a 6-week low after the Markit/CIPS service index showed a further decline to 53.3 following its first fall in four months in January. Sterling trades 0.4 percent lower at 1.2219, having hit a low of 1.2217 earlier, its weakest since Jan. 17. FxWirePro's Hourly Sterling Strength Index stood at -100.65 (Highly Bearish) by 1000 GMT. On the lower side, further weakness can be seen below 1.2200 and any violation below will drag the pair down till 1.2125/1.2080. The minor intraday bullishness can happen only above 1.2295 (55- H EMA) and any break above will take it till 1.2350 (100- H MA)/ 1.2413 (200- H MA). Against the euro, the pound trades 0.5 percent down at 86.05 pence, having hit an early 4-week low of 86.10.
USD/CHF: The Swiss franc edged up after declining to a 7-week low in the previous session, as the greenback weakened following a fall in the U.S. Treasury yields. The major trades 0.05 percent lower at 1.0127, hovering away from a high of 1.0146 hit in the previous session, its strongest since Jan. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at 35.54 (Neutral) by 1000 GMT. Any break above 1.01405 targets 1.0160 (61.8% retracement of 1.03436 and 0.98696)/1.0200. Major bullishness can be seen only above 1.0248. On the lower side, 1.0080 (55- 4 H EMA) will be acting as major intraday support and any break below will drag the pair till 1.000/0.9965 (Feb 16th low).
AUD/USD: The Australian dollar plunged, retreating from a three-month peak hit last week as rising prospects of a March Fed interest rate hike, fuelled by hawkish Fed speeches and upbeat U.S. fundamentals supported the U.S. dollar. The Aussie trades 0.17 percent down at 0.7555, having touched an early low of 0.7543, it’s lowest since Jan. 31. FxWirePro's Hourly Aussie Strength Index stood at -106.10 (Highly Bearish) by 1000 GMT. On the lower side, the major support stands at 0.7520 (200- day MA) and any break below will drag the pair down till 0.74450 (Jan 13th low). The major resistance is around 0.7626 (daily Kijun Sen) and a break above will take it till 0.7680/0.7740.
Equities Recap
European shares declined in early deals following downbeat company updates, while the dollar held gains on growing expectations that the U.S. Federal Reserve will raise interest rates later this month.
The pan-European STOXX 600 index decreased 0.34 percent to 374.32 points, while the FTSEurofirst 300 index eased 0.32 percent to 1,477.02 points.
Britain's FTSE 100 trades 0.35 percent lower at 7,356.45 points, while mid-cap FTSE 250 shed 0.52 percent to 18,852.77 points.
Germany's DAX edged down 0.4 percent at 12,010.66 points; France's CAC 40 trades 0.14 percent lower at 4,956.43 points.
Tokyo's Nikkei eased 0.49 percent to 19,469.17 points, Australia's S&P/ASX 200 index fell 0.49 percent to 5,729.90 points and South Korea's KOSPI gained 0.53 percent to 2,102.65 points.
Shanghai composite index declined 0.4 percent to 3,218.31 points, while CSI300 index dropped 0.2 percent to 3,427.86 points. Hong Kong’s Hang Seng shed 0.7 percent to 23,552.72 points.
Commodities Recap
Crude oil prices rose after declining more than 1 percent to a 3-week low as the dollar edged down from a multi-week peak. International benchmark Brent crude was trading 0.4 percent up at $55.27 per barrel by 0915 GMT, having hit a low of $55.01 the prior day, its lowest since Feb. 8. U.S. West Texas Intermediate crude gained 0.45 percent at $52.75 a barrel, after tumbling to a trough of $52.52 on Thursday, its weakest since Feb. 9.
Gold prices declined, extending losses from the previous session and was poised for its first fall in five weeks on growing expectations of Federal Reserve interest rate hike in March. Spot gold eased 0.5 percent to $1,227.72 per ounce by 0919 GMT, having recorded its worst session since Dec. 15 on Thursday, when it dropped more than 1 percent to hit over 1-week low of $1,230.74. U.S. gold futures rose 0.2 percent to $1,234.90.
Treasuries Recap
The U.S. Treasuries traded modestly higher ahead of the Federal Reserve Chair Janet Yellen’s speech scheduled for later in the day. The yield on the benchmark 10-year Treasury fell 1 basis point to 2.48 percent, the super-long 30-year bond yield slumped 1-1/2 basis points to 3.06 percent and the yield on short-term 2-year note also traded 1 basis point lower at 1.31 percent.
The UK gilts rallied after Purchasing Managers’ Index (PMI) in the services sector for the month of February disappointed market participants. The yield on the benchmark 10-year gilts, plunged 2-1/2 basis points to 1.18 percent, the super-long 30-year bond yields also fell nearly 2-1/2 basis points to 1.77 percent and the yield on the short-term 2-year traded lower by 2-1/2 basis points at 0.10 percent.
The German government bunds gained after reading the country’s worse-than-expected retail sales during the month of January. The yield on the benchmark 10-year bond, fell 1 basis point to 0.30 percent, the long-term 30-year bond yields also slipped 1/2 basis point to 1.11 percent while the yield on short-term 1-year bond moved lower by over 1 basis point to -0.84 percent.
The Japanese government bonds traded narrowly mixed, tracking disparate economic data that confused market movements. While the rise in core inflation and fall in the jobless rate improved investor sentiments, the dip in household spending and confidence added to the woes. The benchmark 10-year bond yield, fell 1/2 basis point to 0.08 percent, the long-term 30-year bond yields trade flat at to 0.87 percent while the yield on the short-term 2-year note traded 1 basis point higher at -0.27 percent.
The New Zealand government bonds traded a tad lower as investors cashed in profits on the last day of the week after witnessing a long rally. The yield on the benchmark 10-year bond, rose 1/2 basis point to 3.33 percent at the time of closing, the yield on 7-year note also pushed higher by nearly 1/2 basis point to 2.89 percent and the yield on mid-term 5-year note traded 1/2 basis point higher at 2.61 percent.
The Australian bonds slumped as investors remain cautious ahead of the Reserve Bank of Australia’s (RBA) monetary policy decision scheduled to be held on March 7. The yield on the benchmark 10-year Treasury note, jumped over 2-1/2 basis points to 2.82 percent, the yield on 15-year note also surged nearly 3 basis points to 3.25 percent while the yield on short-term 2-year traded nearly 2 basis points higher at 1.84 percent.
