Market Roundup
• Spanish Feb Manufacturing PMI 50.4, 49.2 forecast, 48.5 previous
• Italian Feb Manufacturing PMI 48.7, 49.2 forecast, 48.9 previous
• French Feb Manufacturing PMI 49.8, 49.7 forecast, 51.1 previous
• German Feb Manufacturing PMI 48.0, 47.8 forecast, 45.3 previous
• EU Feb Manufacturing PMI 49.2, 49.1 forecast , 47.9 previous
• UK Jan BoE Consumer Credit 1.230B, 1.100B forecast, 1.337B previous
• UK Feb Manufacturing PMI 51.7, 51.8 forecast, 50.0 previous
• UK Jan Mortgage Approvals 70.89K, 67.90K forecast, 67.93K previous
Looking Ahead - Economic Data (GMT)
• 14:30 Canada Feb RBC Manufacturing PMI 50.6 previous
• 15:00 US Feb Manufacturing PMI 50.8 forecast, 51.9 previous
• 15:00 US Feb ISM Manufacturing Employment 46.6, 46.6 previous
• 15:00 US Feb ISM Manufacturing PMI 50.5 forecast, 50.9 previous
• 15:00 US Feb ISM Manufacturing Prices 51.0 forecast, 53.3 previous
Looking Ahead - Economic events and other releases (GMT)
• No significant events
Fx Beat
EUR/USD: The euro dipped dollar on Monday as growing expectations of U.S. interest rate cuts to cushion the impact of the coronavirus stemmed some safety flows into the greenback. Federal Reserve Chairman Jerome Powell said on Friday the central bank will “act as appropriate” to support the economy.Investors took his comments as a hint the Fed will deliver a cut when it meets from March 17-18. The euro was last up 0.70% at $1.1103 . Immediate resistance can be seen at 1.1128 (Higher BB), an upside break can trigger rise towards 1.1200 (Psychological level).On the downside, immediate support is seen at 1.1050 (100 DMA), a break below could take the pair towards 1.0978 (5 DMA).
GBP/USD: Sterling came under renewed pressure agaisnt dollar on Monday, as traders took a cautious view at the start of talks between Britain and the European Union on their future relationship after Brexit. Around 100 UK officials head to Brussels for the first round of talks with the EU’s executive arm, the European Commission, which are due to last until Thursday. By 1230 GMT, the pound was 0.5% lower at $1.2772. Against the euro, it reached a four-and-half- month low of 86.83 pence. Immediate resistance can be seen at 1.2868 (5 DMA), an upside break can trigger rise towards 1.2917 (11 DMA).On the downside, immediate support is seen at 1.2751 (Lower BB), a break below could take the pair towards 1.2700 (Psychological level).
USD/CHF: The dollar dipped against the Swiss franc on Monday as dollar was weighed down by weighed down by the prospect of a full-blown rate-cutting cycle to counter the economic damage inflicted by the coronavirus. Panic in global markets that saw world shares shed almost $6 trillion last week prompted U.S. Federal Reserve Chairman Jerome Powell to issue a statement late on Friday saying the central bank will “act as appropriate” to support the economy. At (GMT 12:48), Greenback dipped 0.81% versus the Swiss franc to 0.9577. Immediate resistance can be seen at 0.9683 (5 DMA), an upside break can trigger rise towards 0.9755 (11 DMA).On the downside, immediate support is seen at 0.9560 (Daily low), a break below could take the pair towards 0.9500 (Psychological level).
USD/JPY: The dollar declined against the Japanese yen on Monday as investors were rattled by weekend data from China that showed its fastest ever contraction in factory activity, raising fears of a global recession from the coronavirus. Pandemic fears pushed markets off a precipice last week, wiping more than $5 trillion from global share market value as stocks suffered their steepest slump in more than a decade. The yen was last up 0.4% at 107.79.Strong resistance can be seen at 109.20 (5 DMA), an upside break can trigger rise towards 109.71 (30 DMA).On the downside, immediate support is seen at 107.31 (Daily low), a break below could take the pair towards 107.00 (Psychological level).
Equities Recap
European shares dipped on Monday as investors were rattled by weekend data from China that showed its fastest ever contraction in factory activity, raising fears of a global recession from the coronavirus.
At (GMT 12:48 ),UK's benchmark FTSE 100 was last trading lower at 0.37 percent, Germany's Dax was down by 1.20 percent, France’s CAC was last down by 1.18 percent.
Commodities Recap
Gold rose more than 1.5% on Monday, recovering from its biggest one-day decline in nearly seven years, on the potential for interest rate cuts by the U.S. Federal Reserve to soften the economic impact from the coronavirus outbreak.
Spot gold was up 1.5% at $1,608.13 an ounce at 1050 GMT and U.S. gold futures rose 2.7% to $1,609.60.
Oil prices jumped more than 4%, up from multi-year lows hit earlier on Monday, as hopes of a deeper cut in output by OPEC and stimulus from central banks countered worries about damage to demand from the coronavirus outbreak.
Brent crude was at $51.91 a barrel, up $2.24 or 4.5%, by 0812 GMT, off $48.40, the lowest since July 2017.
Treasuries Recap
Most euro zone government bond yields edged up from multi-month lows on Monday, as growing expectations that central banks will protect their economies from the coronavirus outbreak curbed the rush to safe-haven assets for now.
Germany’s 10-year Bund yield was last up just 1 bps on the day at -0.60, just above a five-month low of around -0.63% hit on Friday.
Italian bond yields , which jumped last week as Italy grappled with coronavirus, were lower. The gap between Italian and German 10-year bond yields was also down from last week’s highs, trading at around 168 bps.
