Market Roundup
•German Mar ZEW Economic Sentiment 33.5,25.4 forecast,25.0 previous
•German Mar ZEW Economic Sentiment 31.7,20.6 forecast,19.9 previous
•German Mar German ZEW Current Conditions -80.5,-82.0 forecast,-81.7 previous
•EU Labor Cost Index (YoY) (Q4) 3.40% ,5.20% previous
•EU Wages in euro zone (YoY) (Q4)3.10%, 5.20% previous
Looking Ahead Economic Data(GMT)
•12:30 Canada Feb Core CPI (MoM) 0.1% previous
•12:30 Canada Feb CPI (MoM) 0.6% forecast,0.0% previous
•12:30 US Feb Building Permits 1.500M forecast,1.489M previous
•12:30 US Feb Building Permits (MoM) -0.3% previous
•12:30 US Feb Housing Starts 1.430M forecast,1.331M previous
•12:30 Canada Feb Trimmed CPI (YoY) 3.4% forecast,3.4% previous
•12:30 Canada Feb CPI (YoY) 3.1% forecast,2.9% previous
•12:30 Canada Feb Common CPI (YoY) 3.4% forecast,3.4% previous
•12:30 Canada Feb Core CPI (YoY) 2.4% previous
•12:30 Canada Feb Median CPI (YoY) 3.3% forecast,3.3% previous
•12:55 US Redbook (YoY)3.0% previous
•15:00 GlobalDairyTrade Price Index -2.3% previous
•16:30 US Atlanta Fed GDPNow (Q1) 2.3% forecast,2.3% previous
Looking Ahead Events And Other Releases(GMT)
•No data Ahead
Currency Forecast
EUR/USD: The euro declined on Tuesday as dollar firmed ahead of the Federal Reserve's monetary policy decision due on Wednesday. The Federal Reserve's two-day meeting wraps up on Wednesday, and central banks in Britain, Norway, and Switzerland meet Thursday. All are expected to keep rates steady, though markets are not ruling out a move in the Alps.When it comes to the Fed, the market's attention is on policymakers’ updated economic and interest rate projections and comments from Chair Jerome Powell. Last week's stronger than expected inflation reports led traders to reduce their bets on rate cuts this year, with markets now pricing in 71 bps of easing in 2024. At the start of the year, traders were pricing in 150 bps of cuts.Traders are pricing in a 54.7% chance of the Fed starting its easing cycle in June, the CME FedWatch tool showed, sharply lower than earlier expectations. Immediate resistance can be seen at 1.0885 (38.2%fib), an upside break can trigger rise towards 1.0905(Match 18th high).On the downside, immediate support is seen at 1.0821 (38.2%fib), a break below could take the pair towards 1.0783(Lower BB).
GBP/USD: Sterling declined Tuesday as the U.S. dollar firmed ahead of the Federal Reserve's monetary policy decision due on Wednesday. The Bank of England will also deliver its decision on interest rates on Thursday. It is not expected to make any change to the Bank Rate, but investors will scour the central bank's statement for any indication of when monetary policy might change. Wednesday brings data on UK inflation, which is expected to have cooled in February. A poll of economists offers a median forecast for a rise of 3.5% in the headline consumer price index from January's 4% rate, while the core rate is expected to have slowed to 4.6% from 5.1%. Markets are pricing in at least two rate cuts by the BoE this year, with the jury out on a third. Sterling was last down 0.45% at $1.2672. Immediate resistance can be seen at 1.2728(Daily high), an upside break can trigger rise towards 1.2774(23.6%fib).On the downside, immediate support is seen at 1.2669(38.2%fib), a break below could take the pair towards 1.2594(Lower BB).
USD/CHF: The dollar strengthened against the Swiss franc on Tuesday as the focus shifts towards other global central bank meetings after the Bank of Japan (BOJ) ended eight years of negative interest rates. The U.S. dollar index was up 0.2% at 103.82 ahead of the start of the U.S. Federal Reserve's policy meeting, arguably the most important among the slew of central bank meetings this week, including in Taiwan, Indonesia, Turkey, Russia, Brazil and Mexico. Most central banks are expected to hold rates steady, with the market's attention on policymakers' commentary and updated rate projections for the rest of the year, especially at the Fed. Traders are currently pricing in an about 55% chance of a Fed rate cut in June, according to the CME FedWatch Tool. Immediate resistance can be seen at 0.8902(23.6%fib), an upside break can trigger rise towards 0.8912 (Higher BB).On the downside, immediate support is seen at 0.8865(Daily low), a break below could take the pair towards 0.8834(38.2%fib).
USD/JPY: The dollar strengthened against the yen on Tuesday after the Bank of Japan met market expectations and ended eight years of negative interest rates. BOJ heralded a new era as it shifted away from years of ultra-easy monetary policy. It also abandoned bond yield curve control and dropped purchases of riskier assets, including exchange-traded funds. BOJ Governor Kazuo Ueda said in his press conference that accommodative financial conditions will be maintained for the time being and the pace of further hikes will depend on the economic and inflation outlooks. The yen weakened, with the dollar up 1% to 150.64. Strong resistance can be seen at 150.92(23.6%fib), an upside break can trigger rise towards 151.92 (Higher BB).On the downside, immediate support is seen at 149.00 (38.2%fib), a break below could take the pair towards 147.68(50%fib).
Equities Recap
European stocks inched lower on Tuesday and were on track for the fourth straight session of losses, hurt by a decline in technology and financial services shares, ahead of key euro zone economic data due later in the day.
UK's benchmark FTSE 100 was down by 0.23 percent, Germany's Dax was down by 0.01 percent, France’s CAC was up by 0.22 percent.
Commodities Recap
Gold prices drifted lower on Tuesday as the U.S. dollar firmed, while investors await remarks from U.S. Federal Reserve Chair Jerome Powell scheduled after the central bank's policy meeting wraps up on Wednesday for more clarity on interest rate cut moves.
Spot gold fell 0.3% at $2,153.60 per ounce as of 1027 GMT, hovering near its lowest levels in a week hit on Monday. U.S. gold futures eased 0.3% at $2,157.30.
Oil prices were largely steady on Tuesday near four-month highs after breaking above range-bound trading last week, but the prospect of rising exports from Russia weighed amid Ukrainian attacks on refineries.
The Brent crude oil futures contract for May delivery was down 12 cents to $86.77 a barrel at 1201 GMT, while U.S. West Texas Intermediate (WTI) prices were down 14 cents to $82.02.
