Market Roundup
- Eurozone Jan producer prices yy decrease to 1.5 % (forecast 1.6 %) vs previous 2.2 %
- Eurozone Jan producer prices mm increase to 0.4 % (forecast 0.4 %) vs previous 0.1 % (revised from 0.2 %)
- United Kingdom Feb Markit/CIPS construction PMI increase to 51.4 (forecast 50.5 ) vs previous 50.2
- Germany Jan retail sales yy real increase to 2.3 % (forecast 3.5 %) vs previous -1.9 %
- Germany Jan retail sales mm real increase to -0.7 % (forecast 0.9 %) vs previous -1.9 %
- Germany Jan import prices yy decrease to 0.7 % (forecast 0.7 %) vs previous 1.1 %
- Germany Jan import prices mm increase to 0.5 % (forecast 0.5 %) vs previous 0.3 %
- Denmark Jan unemployment rate stays flat at 3.3 % vs previous 3.3 %
Economic Data Ahead
- (0830 ET/1330 GMT) The Statistics Canada is expected to report that gross domestic product increased 0.1 percent in December from 0.4 percent recorded in the previous month
- (0845 ET/1345 GMT) The NAPM-New York releases ISM-New York Index for the month of February. The index stood at 72.5 in the previous month.
- (1000 ET/1500 GMT) The University of Michigan is likely to report that U.S. consumer sentiment index edged down to 99.5 in February, after posting a final reading of 99.9 in January.
- (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0830 ET/1330 GMT) United Kingdom Prime Minister Theresa May's speech.
FX Beat
DXY: The dollar index declined from a 6-week peak after President Donald Trump announced he would impose hefty tariffs imported steel and aluminium to protect U.S. producers. The greenback against a basket of currencies traded 0.2 percent down at 90.08, having touched a high of 90.93 on Thursday, its highest since Jan. 18. FxWirePro's Hourly Dollar Strength Index stood at 43.64 (Neutral) by 1000 GMT.
EUR/USD: The euro hovered towards the 1.2300 handle ahead of German leading political parties' decision on a coalition deal on Sunday that would secure Angela Merkel a fourth term as chancellor and the Italian parliamentary election scheduled also on Sunday. The European currency traded 0.2 percent up at 1.2289, having touched a low of 1.2155 on Thursday, its lowest since Jan. 12. FxWirePro's Hourly Euro Strength Index stood at 64.10 (Bullish) by 1000 GMT. Immediate resistance is located at 1.2340 (21-DMA), a break above targets 1.2371 (Feb 13 High). On the downside, support is seen at 1.2188 (Feb 28 Low), a break below could drag it lower 1.2155.
USD/JPY: The dollar tumbled to a 2-week low against the Japanese yen after Bank of Japan Haruhiko Kuroda said the central bank will consider an exit from its ultra-easy monetary policy if its inflation target is achieved in the year ending in March 2020. The major was trading 0.6 percent down at 105.61, having hit a low of 105.60 earlier, its lowest since Feb.16. FxWirePro's Hourly Yen Strength Index stood at 28.63 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. personal consumption expenditure- price index, unemployment benefit claims and Manufacturing PMI by Markit and ISM. Immediate resistance is located at 107.90 (Feb 21. High), a break above targets 108.50. On the downside, support is seen at 105.18, a break below could take it lower 105.00.
GBP/USD: Sterling edged up ahead of British Prime Minister Theresa May's speech that will lay out her views on how to keep trade open between all of the United Kingdom and the European Union. The major traded 0.05 percent up at 1.3781, having hit a low of 1.3712 on Thursday, it’s lowest since Jan 12. FxWirePro's Hourly Sterling Strength Index stood at -68.68 (Bearish) by 1000 GMT. Investors’ focus will remain on the UK Prime Minister Theresa May's speech, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3875 (5-DMA), a break above could take it near 1.3951 (21-DMA). On the downside, support is seen at 1.3700, a break below targets 1.3665. Against the euro, the pound was trading 0.1 percent down at 89.13 pence, having hit a low of 89.27 pence, it’s lowest since Jan. 12.
USD/CHF: The Swiss franc rose to a 3-day high as the greenback eased from recent peaks after Trump announced he would impose steep tariffs on imported steel and aluminium. The major trades 0.4 percent down at 0.9374, having touched a low of 0.9364 earlier, it’s lowest since Feb. 27. FxWirePro's Hourly Swiss Franc Strength Index stood at 143.63 (Highly Bullish) 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 0.9349 (21-DMA) and any close below that level will drag it till 0.9309.
Equities Recap
European shares slumped to new two-week lows on the back of worries over a global trade war, while the greenback drifted away from 6-week high after Donald Trump said the United States would impose tariffs on imported steel and aluminium.
The pan-European STOXX 600 index declined 1.4 percent to 369.69 points, while the FTSEurofirst 300 index slumped 1.4 percent to 1,448.33 points.
Britain's FTSE 100 trades 0.6 percent lower at 7,129.50 points, while mid-cap FTSE 250 plunged 0.4 percent to 19,480.91 points.
Germany's DAX fell 2.0 percent at 11,942.96 points; France's CAC 40 trades 1.7 percent down at 5,174.45 points.
Commodities Recap
Crude oil prices declined for a fourth straight session, as equity share markets extended a sell-off on Wall Street. International benchmark Brent crude was trading 0.8 percent down at $63.64 per barrel by 1011 GMT, having hit a high of $67.86 on Monday, its highest since Feb. 7. U.S. West Texas Intermediate was trading 1.05 percent down at $60.69 a barrel, after rising as high as $64.21 on Monday, its strongest since Feb. 7.
Gold prices consolidated within narrow ranges as the dollar eased on fears of an imminent trade war following U.S. President Donald Trump's decision to impose steep tariffs on imported steel and aluminium. Spot gold traded flat $1,316.42 an ounce by 1017 GMT, having fallen to its lowest level since Jan. 2 at $1,302.68 on Thursday. U.S. gold futures were up 1 percent at $1,318.5 per ounce on Friday.
Treasuries Recap
The UK gilts surged during the mid-European session as investors crowded into safe-haven assets, following uncertainties over the Brexit negotiations. Prime Minister Theresa May will deliver a keynote speech later in the day for further insight into the debt market. The yield on the benchmark 10-year gilts, slumped 4 basis points to 1.43 percent, the super-long 30-year bond yields plunged 3 basis points to 1.84 percent and the yield on the short-term 2-year traded 2-1/2 basis points lower at 0.74 percent.
The German bunds climbed after the country’s monthly retail sales unexpectedly declined in January, data showed on Friday, in a sign that private consumption may remain weak in early 2018 after failing to make any contribution to growth in Europe’s biggest economy in the fourth quarter. The German 10-year bond yields, which move inversely to its price, slumped nearly 2-1/2 basis points to 0.62 percent, the yield on the 30-year note fell 1-1/2 basis points to 1.27 percent and the yield on short-term 2-year too traded 1-1/2 basis points lower at -0.55 percent.
The New Zealand government bonds ended Friday’s session on a tad lower note amid a muted trading day that witnessed little data of major economic significance. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.95 percent, the yield on 20-year also edged 1 basis point higher to 3.46 percent while the yield on short-term 2-year closed flat at 1.92 percent
The Japanese government bonds jumped on the last trading day of the week, following higher demand at the country’s 10-year auction and as investors have shrugged-off the fall in the unemployment rate for the month of January. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1-1/2 basis points to 0.04 percent, the yield on the long-term 30-year note also declined 1-1/2 basis points to 0.74 percent and the yield on short-term 2-year dipped 1/2 basis point to -0.16 percent.
The Australian 10-year bond yield dipped nearly 2-month low following firmness in the U.S. Treasuries. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 3 basis points to 2.719 percent, the yield on the long-term 30-year note slid 2 basis point to 3.351 percent and the yield on short-term 2-year down 2-1/2 basis points to 1.973 percent.
