Market Roundupp
• Fed's Powell sees solid but slower U.S. economic growth in 2019.
• Trump lands in Vietnam for second summit with N.Korea's Kim.
• May's Brexit deal, no-deal or delay? British PM offers lawmakers a choice.
• Bank of England likely to help economy after no-deal Brexit – Carney.
• US Feb Consumer Confidence, 131.4, 124.7 forecast, 120.2 previous, 121.7 revised.
• US Dec Housing Starts Number, 1.078 mln, 1.250 mln forecast, 1.256 mln previous, 1.214 mln revised.
• US Dec House Starts MM: Change, -11.2%, 3.2% forecast, 0.4% previous.
• US Dec Building Permits: Number, 1.326 mln, 1.290 mln forecast, 1.322 mln previous.
• US Dec Monthly Home Price MM, 0.3%, 0.4% previous.
• US Dec Monthly Home Price YY, 5.6%, 5.8% previous.
• US Dec CaseShiller 20 YY, 4.2%, 4.5%, forecast, 4.7% previous, 4.6% revised.
• US 23 Feb, w/e Redbook YY, 5.2%, 5.4% previous.
• US 23 Feb, w/e Redbook MM, -1.4%, -1.5% previous.
Looking Ahead - Economic Data (GMT)
• No economic data scheduled
Looking Ahead - Events, Other Releases (GMT)
• 01:30 BOJ board member Goushi Kataoka will speak to business leaders in Takamatsu, western Japan, and hold a news conference in Takamatsu
• 08:30 Opening remarks by ECB board member Benot Coeure at the joint ECB, Deutsche Bundesbank and Federal Reserve Bank of Chicago conference on CCP Risk Management in Frankfurt, Germany
• 09:00 Independent Centre for Monetary Economics releases its annual review of the Norwegian central bank's policy. Norway Deputy Governor Jon Nicolaisen will attend in Oslo
• 10:00 Bundesbank president Jens Weidmann to speak and hold a news conference in Frankfurt
• 15:00 Fed's Chairman Jerome Powell testifies on U.S. monetary policy and the economy before the House
Currency Summaries
EUR/USD:The euro rose against US dollar on Tuesday, as dollar was dragged lower by Fed Powell's testimony. Federal Reserve Chairman Jerome Powell repeated that the U.S. central bank would remain patient on monetary policy, suggesting that it was unlikely to raise interest rates anytime soon.The dollar initially inched higher as Powell stayed on script at a U.S. Senate Banking Committee hearing on Tuesday, but it slipped in his question-and-answer session with U.S. senators. The euro, rose 0.3 percent versus the dollar to $1.1393. The dollar index, a measure of its value against a basket of other currencies, fell 0.4 percent to 96.002, after hitting a three-week trough of 95.971.Immediate resistance can be seen at 1.1400 (38.2% retracement level), an upside break can trigger rise towards 1.1446 (23.6% retracement level).On the downside, immediate support is seen at 1.1367 (50% retracement level), a break below could take the pair towards 1.1332 (61.8% retracement level).
GBP/USD: The pound strengthened against greenback on Tuesday, after Prime Minister Theresa May offered lawmakers the chance to vote on delaying Brexit. By opening up the possibility of avoiding a chaotic no-deal departure from the EU the worst-case scenario for sterling, May's proposal sent the currency surging. It jumped 1.4 percent against the dollar to a five-month high of $1.3284 and was headed for its biggest daily gain versus the euro in nearly two years. Investors are focused on whether May can secure any concessions from Brussels in the next two weeks and if lawmakers who oppose May's deal start to signal a willingness to back it. Immediate resistance can be seen at 1.3285 (23.8% retracement level), an upside break can trigger rise towards 1.3364 (Jul 8th 2018 high).On the downside, immediate support is seen at 1.3187 (38.2% retracement level), a break below could take the pair towards 1.3089 (5 DMA).
USD/CAD: The Canadian dollar rose higher against its U.S. counterpart on Tuesday, reversing an early decline as oil prices rose and Federal Reserve Chairman Jerome Powell signaled patience on raising interest rates further. U.S. crude oil futures settled 2 cents higher at $55.50 a barrel on signs that OPEC plans to maintain production cuts despite pressure from U.S. President Donald Trump, whose comment criticizing rising crude prices sent the market into a tailspin a day earlier. At (2008 GMT), the Canadian dollar was trading 0.2 percent higher at 1.3164 to the greenback .Immediate resistance can be seen at 1.3238 (Daily high), an upside break can trigger rise towards 1.3315 (50 DMA).On the downside, strong support).On the downside, strong support is seen at 1.3148 (200 DMA), a break below could take the pair towards 1.3076 (Lower Bollinger Band).
USD/JPY: The dollar slipped sharply lower against the Japanese yen on Tuesday, after Powell repeated that the U.S. central bank would remain patient on monetary policy, suggesting that it was unlikely to raise interest rates anytime soon. In prepared testimony released in advance of two days of hearings on Capitol Hill, Powell said the Fed would remain "patient" in deciding on further interest rate hikes, reaffirming the policy shift made by the central bank in January. The dollar earlier benefited from a jump in the U.S. consumer confidence index for February to 131.4, from a revised 121.7 reading in January. Strong resistance can be seen at 111.00 (Psychological level), an upside break can trigger rise towards 111.41 (100 DMA).On the downside, immediate support is seen at 110.18 (21 DMA), a break below could take the pair towards 109.94 (DMA).
Equities Recap
Fading optimism about U.S.-China trade talk weighed on European shares on Tuesday but a rising Wall Street lifted sentiment.
UK's benchmark FTSE 100 closed down by 0.4 percent, the pan-European FTSEurofirst 300 ended the day up by 0.45 percent, Germany's Dax ended up by 0.4 percent, France’s CAC finished the day up by 0.3 percent.
Wall Street's three major indexes fell slightly after a choppy session on Tuesday as investors eyed mixed economic data and corporate news and many stayed on the sidelines waiting for clarity on issues such as U.S.-China trade talks.
Dow Jones closed down by 0.14 percent, S&P 500 ended down 0.09 percent, Nasdaq finished the day down by 0.08 percent.
Treasuries Recap
U.S. Treasury yields fell on Tuesday as Federal Reserve Chair Jerome Powell stood by the central bank's "patient" stance before raising interest rates again, even as he expected solid economic growth in 2019.
The yield on U.S. benchmark 10-year Treasury notes v was down 3 basis points at 2.643 percent, which was at the lower end of its trading range in February.Two-year Treasury notes were 2.1 basis points lower at 2.486 percent.
Commodities Recap
Gold steadied on Tuesday,after U.S. Federal Reserve Chairman Jerome Powell reiterated the central bank's patient stance in further rate hikes.
Spot gold was steady at $1,327.41 per ounce, while U.S. gold futures settled down about 0.1 percent at $1,328.50 per ounce.
Oil futures inched up on Tuesday after news that OPEC would continue production cuts despite comments from U.S. President Donald Trump, who criticized the producer group for rising crude prices a day earlier.
Brent crude futures , the global benchmark, rose 45 cents to settle at $65.21 a barrel. U.S. West Texas Intermediate crude futures were up 2 cents to settle at $55.50 a barrel.
