Market Roundup
- Philly Fed Harker – Strong case for March rate hike if PCE supports – MNI.
- EuroGroup Dijsselbloem – To restart talks with Greece on bailout reforms but next loan may not come soon – Reuters.
- Spain EconMin De Guindos – Maybe ’16 deficit target miss – Reuters.
- Japan Feb PMI Mfg – flash 53.5, highest in 35 months, Jan final 52.7.
- Japan carving out wider pathway for foreign service workers - Nikkei.
- China ComMin Gao – Foreign investment not leaving China – Reuters.
- PBOC – Most banks meet targeted RRR requirements, continue to enjoy preferential rate, dynamic changes scheduled from February 27 – Reuters.
- Offshore CNY o/n implied depo rate rises to highest since January 6, 6%+.
- RBA February meeting minutes – Steady rates consistent with economic growth, inflation targets, appreciating AUD would complicate transition, AUD up a touch on higher commodity prices, significant downside risks to global growth on Trump – Reuters.
Economic Data Ahead
- (0200 ET/0700 GMT) Switzerland Jan trade balance; last CHF2.716 bln surplus.
- (0245 ET/0745 GMT) France Jan HICP – final, -0.2% m/m, +1.6% y/y eyed; last +0.3%, +0.8%.
- (0300 ET/0800 GMT) France Feb PMI Mfg - flash, 53.5 eyed; last 53.6.
- (0300 ET/0800 GMT) France Feb PMI services - flash, 53.8 eyed; last 54.1.
- (0300 ET/0800 GMT) France Feb PMI composite – flash, 53.7 eyed; last 54.0.
- (0330 ET/0830 GMT) Germany Feb PMI Mfg - flash, 56.0 eyed; last 56.4.
- (0330 ET/0830 GMT) Germany Feb PMI services - flash, 53.6 eyed; last 53.4.
- (0330 ET/0830 GMT) Germany Feb PMI composite – flash, 54.7 eyed; last 54.8.
- (0400 ET/0900 GMT) Eurozone Feb PMI Mfg - flash, 55.0 eyed; last 55.2.
- (0400 ET/0900 GMT) Eurozone Feb PMI services - flash, 53.7 eyed; last 53.7.
- (0400 ET/0900 GMT) Eurozone Feb PMI composite – flash, 54.3 eyed; last 54.4.
- (0430 ET/0930 GMT) Great Britain Jan PSNB, -GBP14.0 bln eyed; last GBP6.42 bln.
- (0430 ET/0930 GMT) Great Britain Jan – ex-banks, -GBP13.8 bln eyed; last GBP6.86 bln.
- (0430 ET/0930 GMT) Great Britain Jan PSNCR; last GBP36.29 bln.
- (0830 ET/1330 GMT) United States Philly Fed non-Mfg business outlook survey; last 33.3.
- (1045 ET/1445 GMT) United States Feb Markit PMI Mfg – flash, 55.2 eyed; last 55.1.
- (1045 ET/1445 GMT) United States Feb Markit PMI services – flash, 55.7 eyed; last 55.6.
- (1045 ET/1445 GMT) United States Feb Markit PMI composite – flash; last 55.8.
Key Events Ahead
- N/A EcoFin meeting in Brussels, ECB Pres Draghi participates in dialogue.
- N/A EFSF 4 and 39-year bond syndication via GS, JPM, Unicredit.
- (0300 ET/0800 GMT) Riksbank Gov Ingves speaks at Stockholm conference.
- (0430 ET/0930 GMT) ECB zero% 7-day refi, E28 bln allotment eyed, E28.01 bln maturing.
- (0430 ET/0930 GMT) Spain E2-3 bln 3 and 9-month treasury bill auction.
- (0630 ET/1130 GMT) ESM E1.5 bln 6-month bill auction.
- (0700 ET/1200 GMT) New Zealand Fonterra dairy auction, GDT price index.
- (0850 ET/1350 GMT) Minny Fed Kashkari (dove, voter) speaks in Golden Valley, Minnesota.
- (1130 ET/1630 GMT) BoC DepGov Wilkins in Ottawa panel discussion.
- (1200 ET/1700 GMT) Philly Fed Harker (hawkish, voter) speaks at Wharton School event.
- (1530 ET/2030 GMT) SF Fed Williams (hawkish, non-voter) speaks at Boise St University.
- (1630 ET/2130 GMT) RBA Gov Lowe speaks in Sydney.
FX Beat
DXY: The dollar rose across the board as investors eye the minutes from the Federal Reserve's last policy meeting due on Wednesday for further hints on the U.S. monetary policy outlook. The greenback against a basket of currencies traded 0.3 percent up at 101.19, having hit a high of 101.25 earlier, it’s strongest since Feb. 15. FxWirePro's Hourly Dollar Strength Index stood at 142.25 (Highly Bullish) by 0400 GMT.
EUR/USD: The euro declined as concerns over the French Presidential elections and Greek crisis weighed on market sentiment. The European currency traded 0.27 percent down at 1.0580, having hit a low of 1.0577 earlier in the session, it’s lowest since Feb. 15. FxWirePro's Hourly Euro Strength Index stood at -48.71 (Neutral) by 0400 GMT. Investors’ will closely watch series of economic data from the Eurozone, ahead of the U.S. preliminary Markit manufacturing and service. Immediate resistance is located at 1.0614 (5-DMA), a break above targets 1.0638 (38.2 % retracement of 1.0828 and 1.0521). On the downside, support is seen at 1.0570, a break below could drag it near 1.0550.
USD/JPY: The dollar rallied as the greenback picked up significant strength versus a basket of currencies. The major extended gains for the second consecutive session as improving risk environment following higher Japanese equities and treasury yields boosted market sentiment. The pair trades 0.51 percent higher at 113.64, having hit a low of 112.61 on Friday, it’s lowest since Feb 9. FxWirePro's Hourly Yen Strength Index stood at -34.55 (Neutral) by 0400 GMT. Investors’ will continue to track overall market sentiment, ahead of series of U.S. economic data. Immediate resistance is located at 113.96 (Jan 31 High), a break above targets 114.50 (Feb 2 High). On the downside, support is seen at 113.00, a break below could take it near 112.77.
GBP/USD: Sterling eased, reversing some of its previous session gains as investors remained cautious ahead of the Bank of England inflation report hearings, where central bank Governor Mark Carney will testify before the Treasury Select Committee on February inflation report. Moreover, renewed broad-based U.S. dollar strength following higher treasury yields weighed on the major. Sterling trades 0.14 percent down at 1.2443, having hit a low of hit on Wednesday, its weakest since Feb. 7. FxWirePro's Hourly Sterling Strength Index stood at 16.48 (Neutral) by 0400 GMT. Investors will continue to track broad based market sentiment, ahead of the BoE Mark Carney's testimony. Immediate resistance is located at 1.2511 (21-DMA), a break above could take it near 1.2568 (61.8 % retracement of 1.2706 and 1.2346). On the downside, support is seen at 1.2411, a break below targets 1.2346 (Feb 7. Low). Against the euro, the pound trades 0.1 percent up at 85.03 pence, having hit a 10-day low of 85.91 on Friday.
AUD/USD: The Australian dollar declined as the central bank's minutes released earlier on the day offered a mixed outlook for the economy. The Reserve Bank of Australia February meeting minutes showed the central bank sounded optimistic about the prospects of the country's economic growth when it held rates at record low, however, the likelihood of spare capacity to persist in the labor market, hinted towards a slack in the labor markets. The Aussie fell 0.2 percent to 0.7668, drifting away to a high of 0.7731 hit on Thursday, its highest since Nov. 10. FxWirePro's Hourly Aussie Strength Index stood at -11.71 (Neutral) by 0400 GMT. Markets will continue to assess the RBA minutes, ahead of U.S. economic data and RBA Governor Philip Lowe's speech. Immediate support is seen at 0.7650, a break below could drag it near 0.7626 (21-DMA). On the upside, resistance is located at 0.7688, a break above targets 0.7713.
NZD/USD: The New Zealand dollar slumped, extending losses for the fourth consecutive session, as sentiment around milk powder prices weakened ahead of Global Dairy Trade auction due later in the day. The Kiwi trades 0.5 percent lower at 0.7152, having hit a high of 0.7242 last week, it’s highest since Feb. 9. FxWirePro's Hourly Kiwi Strength Index was at -67.56 (Bearish) by 0400 GMT. Markets are expecting a 3 percent decline in the whole milk powder prices after whole milk powder futures contracts for March, April and May fell almost 5 percent over the last few days. Immediate resistance is located at 0.7210 (10-DMA), a break above could take it near 0.7226 (38.2 % retracement of 0.7375 and 0.7134). On the downside, support is seen at 0.7134 (Feb 14 Low), a break below could drag it till 0.7100.
Equities Recap
Asian shares gained as Chinese equities rallied to a fresh 2-1/2 month high after domestic funds poured into financial counters on expectations of a brighter outlook for the economy.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent.
Tokyo's Nikkei advanced 0.68 percent to 19,381.76 points, Australia's S&P/ASX 200 index fell 0.18 percent to 5,784.70 points and South Korea's KOSPI was trading 0.93 percent up at 2,103.76 points.
Shanghai composite index rose 0.22 percent to 3,247.23 points, while CSI300 index was trading 0.17 percent up at 3,477.11 points.
Hong Kong’s Hang Seng was trading 0.28 percent lower at 24,079.43 points. Taiwan shares added 0.1 percent at 9,763.93 points.
Commodities Recap
Crude oil prices rose, extending gains for the second day, as members of the Organization of the Petroleum Exporting Countries (OPEC) continued to stay committed to last year production cut. International benchmark Brent crude was trading 0.1 percent up at $56.16 per barrel by 0407 GMT, having hit a high of $56.27 hit in the previous session, its strongest since Feb. 14. U.S. West Texas Intermediate crude gained 0.8 percent at $54.00 a barrel, after rising as high as $54.08 on Monday, its highest since Feb. 10.
Gold prices tumbled as the dollar rose, while the investors awaited more clues on the timing of any U.S. interest rate hikes in a series of speeches by Federal Reserve officials this week. Spot gold fell 0.4 percent to $1,232.66 per ounce by 0412 GMT, having hit its highest since Feb. 9 at $1,243.69 on Friday. U.S. gold futures GCcv1 also fell 0.4 percent to $1,233.60 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.4361 percent higher by 0.011 bps, while 5-year yield was up by 0.015 bps at 1.9249 percent.
The Australian government bonds plunged after the Reserve Bank of Australia (RBA) members remained optimistic over the economic growth of the country. The yield on the benchmark 10-year Treasury note surged 1-1/2 basis points to 2.82 percent, the yield on the 15-year note rose 1 basis point to 3.25 percent and the yield on short-term 2-year also jumped 2 basis points to 1.86 percent.
The New Zealand government bonds traded flat as investors remained cautious ahead of the GlobalDairyTrade (GDT) price auction, scheduled to be held later in the day. The yield on the benchmark 10-year bond hovered around 3.32 percent at the time of closing, the yield on 7-year note also traded flat at 2.90 percent and the yield on short-term 2-year note traded around 2.19 percent.
