Market Roundup
- CFTC IMM CTA data – Specs mixed on USD bets in latest week, EUR shorts up to 58.2k contracts but JPY shorts down to 50.1k contracts.
- US TsySec Mnuchin – No cuts to US entitlement programs like Social Security, Medicare in Trump budget – Reuters.
- President Trump’s budget outline calls for surge in military spending and sharp cuts to non-defense agencies including the EPA – New York Times.
- Figaro/LCI poll – Macron seen beating Le Pen in presidential run-off.
- Bild am Sonntag poll– Merkel’s conservatives, Social Democrats neck-and-neck.
- ECB/Buba Weidmann – ECB won’t end asset purchase program suddenly – FAS.
- German DepFinMin Spahn – No debt relief for Greece – Deutschlandfunk.
- Iceland CB to consider easing capital controls for derivatives – Reuters.
- Japan Softbank nears deal to invest $3 bln in US start-up WeWork – CNBC.
- China SAFE – To strengthen supervision of FX market – SAFE website, Reuters.
- Australia Q4 gross company operating profits +20.1% q/q to A$77.77 bln, most since ’01, +8% eyed, pre-tax profits +67.9%, miners reap record-breaking profits, Q4 business inventories +0.3% q/q, +0.5% eyed.
- New Zealand net migration up in January, short-term visitors took, +11.0% y/y.
Economic Data Ahead
- (0300 ET/0800 GMT) Spain Feb HICP – flash, +3.2% y/y eyed; last +2.9%.
- (0330 ET/0830 GMT) Sweden Jan household lending; last +7.2% y/y.
- (0400 ET/0900 GMT) Eurozone Jan money supply M3, +4.8% y/y eyed; last +5.0%.
- (0400 ET/0900 GMT) Eurozone Jan household loans, +2.2% y/y eyed; last +2.0%, to non-fin’ls +2.3%.
- (0400 ET/0900 GMT) Italy Jan non-EU trade balance – flash; last E6.68 bln surplus.
- (0500 ET/1000 GMT) Eurozone Feb business climate index, 0.79 eyed; last 0.77.
- (0500 ET/1000 GMT) Eurozone Feb economic sentiment index, 108.0 eyed; last 107.9.
- (0500 ET/1000 GMT) Eurozone Feb industrial sentiment index, 1.2 eyed; last 0.8.
- (0500 ET/1000 GMT) Eurozone Feb services sentiment index, 13.5 eyed; last 12.9.
- (0500 ET/1000 GMT) Eurozone Feb consumer confidence index – final, -6.2 eyed; last -4.9.
- (0830 ET/1330 GMT) United States Jan durable goods orders, +1.7% m/m eyed; last -0.5%, ex-def +1.7%.
- (0830 ET/1330 GMT) United States Jan - ex-transport, +0.5% m/m eyed; last +0.5%.
- (0830 ET/1330 GMT) United States Jan – non-defense capital goods ex-air, +0.5% m/m eyed; last +0.7%.
- (1000 ET/1500 GMT) United States Jan pending home sales, +0.8% m/m eyed; last +1.6%, index 109.0.
- (1030 ET/1530 GMT) United States US Feb Dallas Fed mfg business index; last 22.1.
Key Events Ahead
- N/A Norway NOK4 bln zero% NST36 6-month treasury bill auction.
- (0500 ET/1000 GMT) Italy E3.5-4.0/0.5-1.0/1.5-2.0 bln 1.2/1.6/2.2% 2022/26/27 BTP auctions.
- (0500 ET/1000 GMT) Italy E2.5-3.2 bln total 0.244/0.256% 2022/24 index-linked BTP auctions.
- (0730 ET/1230 GMT) SNB ViceChair Zurbruegg speaks at Basel World Banknote Summit.
- (0850 ET/1350 GMT) France E3.0-3.4/1.2-1.6/1.2-1.6 bln 3/6/12-month BTF note auctions.
- (0900 ET/1400 GMT) ECB/Latvia CB Rimsevics press conference on Latvia tax system.
- (1100 ET/1600 GMT) Dallas Fed Kaplan in U.Oklahoma moderated Q&A.
FX Beat
DXY: The dollar struggled to hold ground versus the Japanese yen, as investors’ cautiously awaited speech by the U.S. President Donald Trump on tax reform. The greenback against a basket of currencies traded flat at 101.12, having hit a low of 100.66 the day before, it’s weakest since Feb. 17. FxWirePro's Hourly Dollar Strength Index stood at 29.45 (Neutral) by 0500 GMT.
EUR/USD: The euro rose against the dollar as investors remained cautious ahead of this week's speech by U.S. President Donald Trump. However, developments surrounding the French election limited gains in the major. The European currency traded 0.06 percent up at 1.0565, having hit a high of 1.0617 on Friday, it’s highest since Feb. 20. FxWirePro's Hourly Euro Strength Index stood at -80.20 (Slightly Bearish) by 0400 GMT. Investors’ will closely watch Eurozone economic sentiment figures, ahead of the U.S durable goods and pending home sales for further clues on the pair. Immediate resistance is located at 1.0588 (10-DMA), a break above targets 1.0621 (38.2 % retracement of 1.0828 and 1.0493). On the downside, support is seen at 1.0500, a break below could drag it near 1.0480.
USD/JPY: The dollar steadied after declining to a two-week low earlier in the session as investors awaited this week's speech by U.S. President Donald Trump for clues on tax reform. The pair trades 0.05 percent higher at 112.19, having hit low of 111.91 earlier in the session, its lowest since Feb. 9. FxWirePro's Hourly Yen Strength Index stood at 34.33 (Neutral) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. durable goods orders, pending home sales and Trump speech on Tuesday. Immediate resistance is located at 112.50, a break above targets 112.95 (5-DMA). On the downside, support is seen at 111.59 (Feb. 7 Low), a break below could take it near 112.00.
GBP/USD: Sterling declined to a 10-day low against the dollar as the UK PM May and Nicola Sturgeon prepared to call in a new Scotland independence referendum in March, but only after Theresa May triggers the Article 50. The major trades 0.2 percent lower at 1.2428, having hit a low of 1.2391 earlier in the session, its weakest since Feb. 17. FxWirePro's Hourly Sterling Strength Index stood at -93.00 (Slightly Bearish) by 0400 GMT. Investors attention will remain on developments surrounding Scotland independence referendum, ahead of the U.S economic data. Immediate resistance is located at 1.2483 (38.2 % retracement of 1.2706 and 1.2346), a break above could take it near 1.2526 (50.0 % retracement). On the downside, support is seen at 1.2391 (Session Low, a break below targets 1.2346 (Feb 2 Low). Against the euro, the pound trades 0.43 percent lower at 85.02 pence, having hit a 7-week low of 85.19.
AUD/USD: The Australian dollar rose after data showed surging commodity prices led to record-breaking company profits in the fourth quarter. The economy's company profits increased by a larger-than-expected 20 percent in the Q4, surpassing estimates of 8.0 percent on the back of the mining sector. The Aussie trades 0.3 percent up at 0.7691, hovering towards a high of 0.7740 hit on Thursday, it’s highest since Nov. 10. FxWirePro's Hourly Aussie Strength Index stood at -58.29 (Bearish) by 0500 GMT. Markets will continue to digest upbeat economic data, ahead of series of U.S. economic data. Immediate support is seen at 0.7649 (21-DMA), a break below could drag it near 0.7620. On the upside, resistance is located at 0.7720, a break above targets 0.7778 (Nov. 8 High).
NZD/USD: The New Zealand dollar rose after slumping below the 0.7200 handle on Friday, as markets remained confident in the RBNZ's bullish assessment of the economy. The Kiwi trades 0.1 percent higher at 0.7199, after touching a high of 0.7246 on last week, it’s highest since Feb. 9. FxWirePro's Hourly Kiwi Strength Index was at 50.31 (Bullish) by 0500 GMT. Investors’ will continue to track overall market sentiment, ahead of the U.S. macroeconomic fundamental drivers for further momentum on the major. Immediate resistance is located at 0.7223 (38.2 % retracement of 0.7375 and 0.7129), a break above could take it near 0.7252 (72.5 % retracement). On the downside, support is seen at 0.7179 (Feb 17 Low), a break below could drag it till 0.7140 (Feb. 2).
Equities Recap
Asian shares stayed flat after declining in early but stayed below 19-month highs as renewed political concerns in the U.S. and Europe prompted some investors to remain on the sidelines after a recent rally.
MSCI's broadest index of Asia-Pacific shares outside Japan was flat after easing 0.3 percent in early deals.
Tokyo's Nikkei fell 0.94 percent to 19,102.50 points, Australia's S&P/ASX 200 index dropped 0.29 percent to 5,722.30 points and South Korea's KOSPI was trading 0.38 percent down at 2,086.20 points.
Shanghai composite index eased 0.38 percent to 3,240.91 points, while CSI300 index was trading 0.41 percent down at 3,459.59 points.
Hong Kong’s Hang Seng was trading 0.43 percent lower at 23,863.69 points. Taiwan shares shed 0.19 percent at 9,750.47 points.
Commodities Recap
Crude oil prices edged higher, reversing previous session losses, as OPEC's efforts to curb global supply glut strengthened market sentiment. International benchmark Brent crude was trading 0.45 percent up at $56.19 per barrel by 0406 GMT, having hit a peak of $57.23 last week. U.S. West Texas Intermediate crude gained 0.2 percent at $54.13 a barrel, after easing from a peak of $55.00, its highest since Jan. 3.
Gold prices held gains near 3-1/2-month highs hit on Friday as investors await more clarity on President Donald Trump's economic policy. Spot gold trading flat at $1,256.05 per ounce at 0414 GMT, having hit its highest since Nov. 11, at $1,260.04 in the previous session. U.S. gold futures were also steady at $1,257.70.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.3365 percent higher by 0.02 bps, while 5-year yield was up by 0.024 bps at 1.8274 percent.
The Australian government bond futures rose, with the three-year bond contract up 1 tick at 98.020 and the 10-year contract added 3.5 ticks to 97.2750.
The New Zealand government bonds gained, sending yields 1 basis points lower at the long end of the curve.
