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Europe Roundup: Sterling steadies on upbeat employment data, euro rallies as German sentiment improve, European shares rally - Tuesday, March 19th, 2019

Market Roundup

  • EUR/USD 0.11%, USD/JPY -0.17%, GBP/USD 0.12%, EUR/GBP -0.05%
     
  • DXY -0.12%, DAX 0.61%, FTSE 0.32%, Brent 0.58%, Gold 0.27%
     
  • Brexit in crisis as PM May plots a course around speaker's obstruction
     
  • Sterling stands tall after jobs data; Brexit delay eyed
     
  • Great Britain Feb Claimant Count Unemployment Change, 27.0k, 14.2k prev, 15.7k r'vsd
     
  • Great Britain Jan ILO Unemployment Rate, 3.9%, 4.0% f'cast, 4.0% prev
     
  • Great Britain Jan Employment Change, 222k, 120k f'cast, 167k prev
     
  • Great Britain Jan Average Wk Earnings 3M YY, 3.4%, 3.2% f'cast, 3.4% prev, 3.5% r'vsd
     
  • Great Britain Jan Average Earnings (Ex-Bonus), 3.4%, 3.4% f'cast, 3.4% prev
     
  • German economic advisors slash 2019 growth forecast to 0.8 pct
     
  • Germany Mar ZEW Economic Sentiment, -3.6, -11.0 f'cast, -13.4 prev
     
  • Germany Mar ZEW Current Conditions, 11.1, 11.7 f'cast, 15.0 prev
     
  • EZ Q4 Wages in Euro Zone, 2.4%, 2.3% f'cast, 2.3% prev
     
  • Japan bank executive says mergers won't fix woes brought by BOJ policy
     

Economic Data Ahead

  • (1000 ET/1400 GMT) The United States is likely to report that factory orders increased 0.3 percent in January, from a gain of 0.1 percent in the prior month.
     
  • (1630 ET/2030 GMT) API reports its weekly crude oil stock.
     

Key Events Ahead

  • N/A The Federal Open Market Committee begins its two-day meeting.
     
  • N/A Canada's Finance Minister Bill Morneau will unveil the country's final federal budget ahead of a federal election in October.

FX Beat

DXY: The dollar index plunged to a fresh 2-1/2 week trough amid concern over the U.S. economy and expectations that the Federal Reserve will prove accommodative at a meeting this week. The greenback against a basket of currencies traded 0.2 percent down at 96.32, having touched a low of 96.29, its lowest since March 1. FxWirePro's Hourly Dollar Strength Index stood at -137.61 (Highly Bearish) by 1100 GMT.

EUR/USD: The euro rallied after a survey by the ZEW research institute showed the sentiment among German investors improved by much more than expected in March. The European currency traded 0.2 percent up at 1.1354, having touched a high of 1.1359 on Monday, its highest since Mar. 4. FxWirePro's Hourly Euro Strength Index stood at 56.83 (Bullish) by 1100 GMT. Immediate resistance is located at 1.1367 (78.6% retracement of 1.1176 and 1.1496), a break above targets 1.1408 (March 1 High). On the downside, support is seen at 1.1294 (March 4 Low), a break below could drag it till 1.1243 (Mar. 12 Low).

USD/JPY: The dollar declined as investors remained cautious ahead of a U.S. Federal Reserve meeting, where it is expected to reinforce a dovish approach to any further rises in interest rates. The major was trading 0.2 percent down at 111.20, having hit a low of 111.15, its lowest since March 14. FxWirePro's Hourly Yen Strength Index stood at 43.05 (Neutral) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. factory orders. Immediate resistance is located at 112.13 (Mar. 5 High), a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 111.00 (Mar. 13 Low), a break below could take it lower at 110.66 (Feb.28 Low).

GBP/USD: Sterling steadied after data showed British employers ramped up their hiring at the fastest pace in three years, with the number of people in work rising by 222,000. However, uncertainty on Brexit negotiations limited the upside in the British pound. The major traded 0.4 percent up at 1.3302, having hit a high of 1.3380 on Wednesday; it’s highest since June 14. FxWirePro's Hourly Sterling Strength Index stood at 59.03 (Bullish) 1100 GMT. Immediate resistance is located at 1.3319 (Feb. 28 High), a break above could take it near 1.3380 (Mar. 13 High). On the downside, support is seen at 1.3202 (Mar. 15 Low), a break below targets 1.3166 (Mar. 4 Low). Against the euro, the pound was trading 0.2 percent up at 85.36 pence, having hit a high of 84.71 on Wednesday, it’s highest since May 2017.

USD/CHF: The Swiss franc advanced to a 2-week peak as the greenback slumped ahead of a Federal Reserve meeting. The major trades 0.2 percent down at 0.9995, having touched a low of 0.9994; it’s lowest since March 5. FxWirePro's Hourly Swiss Franc Strength Index stood at 74.75 (Bullish) by 1100 GMT. On the higher side, near-term resistance is around 1.0037 (5-DMA) and any break above will take the pair to next level till 1.0124 (Mar. 7 High). The near-term support is around 0.9983 (February 25 Low), and any close below that level will drag it till 0.9962 (February 27 Low).

Equities Recap

European shares advanced as markets expect the U.S. central bank to reinforce a dovish approach to any further rises in interest rates.

The pan-European STOXX 600 index surged 0.5 percent at 383.96 points, while the FTSEurofirst 300 index rallied 0.6 percent to 1,512.29 points.

Britain's FTSE 100 trades 0.3 percent up at 7,321.57 points, while mid-cap FTSE 250 rose 0.1 to 19,512.20 points.

Germany's DAX rose 0.7 percent at 11,737.69 points; France's CAC 40 trades 0.3 percent higher at 5,430.95 points.

Commodities Recap

Crude oil prices steadied near 2019 highs, supported by supply cuts led by producer cartel OPEC and U.S. sanctions against oil producers Iran and Venezuela. International benchmark Brent crude was trading 0.8 percent up at $67.92 per barrel by 1028 GMT, having hit a high of $68.11 on Thursday, its highest since Nov. 16. U.S. West Texas Intermediate was trading 0.9 percent higher at $59.43 a barrel, after rising as high as $59.45, its highest since the Nov. 13.

Gold prices surged as the dollar languished near 2-1/2 week lows amid growing expectations the Fed would shift to a more accommodative policy stance. Spot gold gained 0.4 percent to $1,307.98 per ounce at 1047 GMT, having touched a high of $1,311.18 on Wednesday, its highest since March 1. U.S. gold futures rose about 0.2 percent to $1,304.60.

Treasuries Recap

The U.S. Treasuries gained during afternoon session ahead of the upcoming 2-day Fed monetary policy meeting, scheduled to be concluded tomorrow. The yield on the benchmark 10-year Treasury yield slipped nearly 1 percent to 2.594 percent, the super-long 30-year bond yields remained flat at 3.009 percent and the yield on the short-term 2-year too traded 1 basis point lower at 2.446 percent.

The United Kingdom’s gilts jumped during the afternoon session after the country’s Prime Minister Theresa May’s plan to hold a third meaningful vote on her deal before Thursday’s EU Summit was thwarted by Parliamentary Speaker Bercow’s statement yesterday afternoon. The yield on the benchmark 10-year gilts, slipped nearly 1-1/2 basis points to 1.185 percent, the super-long 30-year bond yields fell nearly 2 basis points to 1.686 percent and the yield on the short-term 2-year traded tad lower at 0.747 percent.

The German bunds slightly gained during European session following an improvement in the country’s ZEW economic sentiment index for the month of March, beating market expectations as well. The German 10-year bond yields, which move inversely to its price, slipped 1/2 basis point to 0.076 percent, the yield on the 30-year note edged nearly 1 basis point lower to 0.733 percent and the yield on short-term 2-year hovered around -0.526 percent.

The Japanese government bonds jumped after the end of Asian session amid a silent trading day that witnessed data of little economic significance. However, investors will keep a close eye on the Federal Reserve’s monetary policy meeting, scheduled for tomorrow for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped 4 basis points to -0.042 percent, the yield on the long-term 30-year suffered 2 basis points to 0.563 percent and the yield on short-term 2-year too edged down to -0.161 percent.

The Australian government bond yields during the Asian trading session after the Reserve Bank of Australia (RBA) cited economic uncertainties in its March monetary policy meeting minutes, released early today. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 3-1/2 basis points to 1.945 percent, the yield on the long-term 30-year bond slumped 4 basis points to 2.569 percent and the yield on short-term 2-year traded nearly 3 basis points to 1.563 percent.

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Actual

449.6 Stale

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451.7 Stale

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January 31 00:00 UTC 774396774396m

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