Market Roundup
- EUR/USD 0.22%, USD/JPY -0.33%, GBP/USD -0.02%, EUR/GBP 0.24%
- DXY -0.18%, DAX -1.77 %, FTSE -0.85%, Brent 0.19%, Gold 1.04%
- China urges U.S. away from "brink" as Trump picks trade weapons
- Trump temporarily excludes EU, six other allies from steel tariffs
- EU leaders confirm Brexit transition offer, joint trade line
- U.S. Congress approves $1.3-trillion spending bill, sends to Trump
- Inflation bites into German 2017 real wages
- BOJ deputy gov says price gains insufficient, wants stronger policy regime
- Oil rises as Saudi talks about extending output cuts into 2019
- Gold shines as trade war fears rattle markets
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have increased 1.5 percent in February after declining 3.6 percent in January, while goods orders excluding transportation are likely to have risen 0.5 percent after easing 0.3 percent the prior month.
- (0830 ET/1230 GMT) Statistics Canada is expected to report that retail sales gained 1.1 percent in January after falling 0.8 percent in December. While excluding autos, retail sales are likely to have risen 0.9 percent, after declining 1.8 percent in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that annual inflation rate rose 2.0 percent in February from 1.7 percent in January, bringing it closer to the Bank of Canada’s 2 percent target.
- (1000 ET/1400 GMT) The U.S. new home sales are expected to have increased to 623,000 units in February from 593,000 units in January.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0810 ET/1210 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic speaks on the economic outlook before the Knoxville Economics Forum in Knoxville, Tennessee
- (0830 ET/1230 GMT) Bank of England Monetary Policy Committee member Gertjan Vlieghe gives a speech to the Birmingham Chamber of Commerce in Birmingham
- (1030 ET/1430 GMT) Minneapolis Fed President Neel Kashkari participates in a Q&A session moderated by Kathleen Hays of Bloomberg in New York
- (1130 ET/1530 GMT) Dallas Fed President Robert Kaplan participates in moderated Q&A session before the Trellis Foundation Summit on Postsecondary Access, Affordability, and Attainment in Austin, Texas
- (1145 ET/1545 GMT) FedTrade 15-year Fannie Mae / Freddie Mac (max $165 mn)
- (1900 ET/2300 GMT) Boston Fed President Eric Rosengren speaks before the 10th Annual International Research Forum on Monetary Policy co-sponsored by the Federal Reserve Board in Washington, D.C.
FX Beat
DXY: The dollar index eased as markets were rattled by worries over rising U.S.-China trade tensions after U.S. President Donald Trump announced tariffs on up to $60 billion of Chinese goods. The greenback against a basket of currencies 0.2 percent down at 89.68, having touched a low of 89.40 on Thursday, its lowest since Feb. 20. FxWirePro's Hourly Dollar Strength Index stood at -58.12 (Bearish) by 1000 GMT.
EUR/USD: The euro rose after U.S. President Donald Trump suspended import duties on steel and aluminium for the European Union as well as Argentina, Australia, Brazil, Canada, Mexico and South Korea for now. The European currency traded 0.2 percent up at 1.2331, having touched a high of 1.2387 the day before, its highest since Mar. 14. FxWirePro's Hourly Euro Strength Index stood at -64.14 (Bearish) by 1000 GMT. Immediate resistance is located at 1.2383 (Mar 15 High), a break above targets 1.2412 (Mar. 14 High). On the downside, support is seen at 1.2285 (Previous Session Low), a break below could drag it lower 1.2251 (Mar. 2 Low).
USD/JPY: The dollar declined to a 16-month low after U.S. President Donald Trump signed a memorandum that could levy tariffs on up to $60 billion of imports from China. Meanwhile, China unveiled plans to impose tariffs on up to $3 billion of U.S. imports in response to the steel and aluminium duties. The major was trading 0.3 percent down at 104.93, having hit a low of 104.63 earlier, its lowest since Nov. 2016. FxWirePro's Hourly Yen Strength Index stood at 138.15 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. new home sales and Fed officials' speech. Immediate resistance is located at 105.07 (78.6% retracement of 106.64 and 104.63), a break above targets 105.41 (61.8% retracement). On the downside, support is seen at 104.50, a break below could take it lower 104.05.
GBP/USD: Sterling steadied and was poised to post its biggest weekly rise in six weeks, amid threats of a global trade war. The British currency rose to a 7-week peak in the previous session as Britain and the European Union agreed on a transition period after Brexit and the Bank of England reinforced the view that the borrowing costs will rise for the second time since 2008 as early as May. The major traded 0.1 percent up at 1.4101, having hit a high of 1.4216 the day before, it’s highest since Feb. 2. FxWirePro's Hourly Sterling Strength Index stood at -19.01 (Neutral) 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 1.4041 (5-DMA), a break below targets 1.3981 (10-DMA). Against the euro, the pound was trading 0.2 percent down at 87.41 pence, having hit a high of 86.68 pence the day before, it’s highest since June 2016.
USD/CHF: The Swiss franc surged to a 1-week high as worries over the U.S. tariffs on imports from China triggered risk-aversion across the board. The major trades 0.2 percent down at 0.9474, having touched a low of 0.9444 the day before, it’s lowest since Mar. 15. FxWirePro's Hourly Swiss Franc Strength Index stood at 41.52 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9516 (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 0.9424 (Mar. 14 Low) and any close below that level will drag it till 0.9400.
Equities Recap
European shares declined, weighed down by losses in tech, basic resources, and banks stocks, while the dollar slumped against the yen on worries that U.S. tariffs on imports from China could escalate into a global trade war.
The pan-European STOXX 600 index plunged 1.5 percent to 363.54 points, while the FTSEurofirst 300 index declined 1.4 percent to 1,424.80 points.
Britain's FTSE 100 trades 0.8 percent lower at 6,890.96 points, while mid-cap FTSE 250 shed 1.3 percent to 19,144.10 points.
Germany's DAX fell 2.1 percent at 11,843.77 points; France's CAC 40 trades 1.9 percent declined at 5,069.54 points.
Commodities Recap
Crude oil prices rallied by around 1 percent, bolstered by Saudi plans for OPEC and extension of Russian-led production curbs into 2019 to balance the market. International benchmark Brent crude was trading 0.1 percent up at $68.92 per barrel by 1000 GMT, having hit a high of $69.96 earlier, its highest since Feb. 2. U.S. West Texas Intermediate was trading 0.4 percent up at $64.46 a barrel, after rising as high as $65.69 the day before, its strongest since Feb 2.
Gold prices rallied as much as 1 percent to hit a 4-week peak, as investors rushed to safety after U.S. President Donald Trump moved towards anti-China tariffs, triggering tensions of a global trade war. Spot gold was up 1.01 percent at $1,342.17 per ounce by 1021 GMT, having hit a high of $1,343.08 an ounce earlier, its highest since Feb 20 and were on track for their best weekly performance since the week of Feb. 16. U.S. gold futures for April delivery rose 0.9 percent to $1,339.50 per ounce.
Treasuries Recap
The U.S. Treasuries climbed ahead of a host of FOMC members’ speeches – members Bostic, Kashkari and Rosengren are scheduled to deliver their speeches today by 12:10GMT, 14:30GMT and 23:00GMT respectively. The yield on the benchmark 10-year Treasuries slipped nearly 1 basis point to 2.82 percent, the super-long 30-year bond yields hovered around 3.07 percent and the yield on the short-term 2-year traded 1/2 basis point lower at 2.28 percent.
The German bunds remained narrowly mixed as investors remained side-lined in any major trading activity amid lack of economic data that carried major significance. The German 10-year bond yields, which move inversely to its price, fell 1 basis point to 0.52 percent, the yield on 30-year note slipped nearly 1-1/2 basis points to 1.15 percent and the yield on short-term 2-year too traded tad lower at -0.58 percent.
The Japanese 10-year government bond yields slumped to lowest in four months as investors poured into safe-haven instruments amid a slide in riskier equities, following rising tensions over a global trade war, sparked by U.S. President Donald Trump’s tariff plans to be imposed on steel and aluminium exports. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1-1/2 basis points to 0.02 percent, the yield on the long-term 30-year note also slid nearly 1-1/2 basis points to 0.74 percent and the yield on short-term 2-year traded flat at -0.15 percent.
The Australian government bonds gained across the curve on growing angst over trade war between two biggest economies of the world. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 2 basis points to 2.670 percent, the yield on the long-term 30-year note slid 3 basis points to 3.248 percent and the yield on short-term 2-year down 1 basis point to 2.050 percent.
