Market Roundup
- EUR/USD -0.7%, USD/JPY +0.5%, GBP/USD -0.4%, DXY +0.5%,
- DAX +0.5%, CAC +0.1%, Brent +1.6%, Gold -0.7%, Copper -0.2%
- Euro's fall on the day vs dollar largest in % terms since Jan 18
- U.S 2-year yield climbs to 1.2230 from 1.1820 Mon low
- OPEC Sec Gen: We are still far away from the equilibrium oil price, stocks are very high
- Philly Fed Harker: Strong case for March rate hike if PCE supports – Market News
- BOE Haldane: Risks to interest rates are two-sided and symmetric
- EU Juncker: Britain faces "very hefty" Brexit bill from Brussels
- EZ Feb Markit Manufacturing flash PMI 55.5 vs previous 55.2. 55.0 forecast
- EZ Feb Service flash PMI 55.6 vs previous 53.7. 53.7 forecast
- Germany Feb Markit Manufacturing flash PMI 57.0 vs previous 56.4. 56.0 forecast
- Great Britain Jan PSNB -9.824bln vs previous 4.237bln revised -14.0bln forecast
- Great Britain Jan PSNCR -26.466bln vs previous 36.344bln revised
- Swiss Jan Trade 4733mln vs previous 2694mln revised
- Sweden Central bank chief Ingves says crown must not strengthen too fast
- Prospect for more BoJ stimulus fading
Economic Data Ahead
- (0945 ET/1445 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of February. The index is likely rose to 55.2 after posted a final reading of 55.0 in the previous month.
- (0945 ET/1445 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index edged up to 55.7 in January after printing a final reading of 55.6 in January.
- (0945 ET/1445 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of February. The index posted a final reading of 55.8 in the prior month.
- (0830 ET/1330 GMT) The Conference Board releases Australia's Leading Indicator for the month of December. The indicator stood at 0.5 percent in the previous month.
- (1830 ET/2330 GMT) The Melbourne Institute will release Australia's Westpac Leading Index for the month of January. The index edged up 0.4 percent in the previous month.
Key Events Ahead
- (0850 ET/1350 GMT) Minneapolis Fed President Neel Kashkari participates in a conversation on the economy and the role of the Federal Reserve, before the Financial Planning Association of Minnesota.
- (1145 ET/1645 GMT) FedTrade operation 30-yr Fannie Mae/Freddie Mac (max $2.425 bn)
- (1200 ET/1700 GMT) Philadelphia Fed chief Patrick Harker speaks on the economic outlook before an event hosted by the Wharton School of the University of Pennsylvania, in Philadelphia.
- (1530 ET/2030 GMT) San Francisco Fed President John Williams will speak on "Getting to Know the Fed" before Boise State University students, in Boise, Idaho.
- (1630 ET/2130 GMT) Reserve Bank of Australia Governor Philip Lowe's Speech.
FX Beat
DXY: The dollar rallied across the board as hawkish comments from the Philadelphia Federal Reserve Bank President Patrick Harker boosted expectations of an eventual Fed rate hike action. The greenback against a basket of currencies traded 0.6 percent up at 101.51, having hit a high of 101.56 earlier, it’s strongest since Feb. 15. FxWirePro's Hourly Dollar Strength Index stood at 101.73 (Highly Bullish) by 1100 GMT.
EUR/USD: The euro slumped as the buying interest around the greenback intensified following a rise in the U.S. Treasury yields. Markets seem to have ignored better than expected German and Eurozone's flash PMI readings, as investors braced for speeches by Philly Fed P. Harker, Minneapolis Fed N.Kashkari, and San Francisco Fed J. Williams due later in the session. The European currency traded 0.7 percent down at 1.0535, having hit a low of 1.05333 earlier in the session, it’s lowest since Feb. 15. FxWirePro's Hourly Euro Strength Index stood at -134.45 (Highly Bearish) by 1000 GMT. On the higher side 1.0623-1.06330 (200 H MA and Feb 19th high) will be acting as major near-term resistance and any break above targets 1.0689 (21- day MA). The next immediate support is around 1.05200 and any break below will drag it 1.04500 (Jan 11 low)/1.03400 (Jan 3 low).
USD/JPY: The dollar rose, extending gains for the second consecutive session after two Federal Reserve policymakers pointed to the potential for U.S. interest rates to rise next month. Hawkish comments from Philadelphia Federal Reserve Bank President Patrick Harker, which indicated interest rate-hike move at the Fed's next monetary policy meeting in March, boosted the demand around the greenback. The pair trades 0.6 percent higher at 113.73, having hit a high of 113.77 earlier, it’s highest since Feb 16. FxWirePro's Hourly Yen Strength Index stood at -17.20 (Neutral) by 1000 GMT. The minor resistance is around 113.60 (daily Kijun-Sen) and any break above will take the pair till 114.95. On the lower side, minor support is around 112 and any break below 112 will drag it till 111.66.
GBP/USD: Sterling tumbled towards the 1.2400 handle, reversing most of its previous session gains following the Bank of England’s February Inflation Report. The selling pressure in the major intensified after BoE MPC member A. Haldane said he is comfortable with a neutral stance on the central bank's course of interest rates. Sterling trades 0.4 percent down at 1.2416, hovering towards a low of 1.2383 hit last week, its weakest since Feb. 7. FxWirePro's Hourly Sterling Strength Index stood at -53.87 (Bearish) by 1100 GMT. On the lower side, any violation below 1.23800 will drag the pair down till 1.234500 (50% retracement of 1.19860 and 1.27060). Any break below 1.23450 confirms further weakness, a decline till 1.2260/1.2200 likely. The minor trend reversal can happen only above that 1.2580 level and any break above will take it till 1.2705 (Feb 2 high)/1.27750 (Dec 6 high). Against the euro, the pound trades 0.3 percent up at 84.86 pence, having hit a 10-day low of 85.91 on Friday.
USD/CHF: The Swiss franc declined as the dollar rallied across the board following a rise in the U.S. Treasury yields. The major trades 0.7 percent up at 1.0098, having touched a high of 1.0100 earlier, it’s highest since Fed. 15. FxWirePro's Hourly Swiss Franc Strength Index stood at 51.48 (Bullish) by 1100 GMT. The pair is facing strong resistance at 1.01180 and any bullishness can be seen only above that level. The declined from 1.03436 has got completed at 0.9860, so further bearishness is only below 0.98600. On the higher side, break above 1.01180 will take the pair till 1.0342 in the short term. Any violation below 0.9980 will drag it down till 0.9950/0.99290. The minor support is around 1.00350 (55- day EMA)/1.000.
AUD/USD: The Australian dollar fell to a 6-day low as the greenback rose following hawkish comments from the Philadelphia Federal Reserve Bank President Patrick Harker. Moreover, the minutes from RBA's monetary policy meeting in February, which offered a mixed outlook for the Australian economy also weighed on the major. The Aussie eased 0.3 percent to 0.7661, having touched a fresh low of 0.7649 earlier, its weakest since Feb. 15. FxWirePro's Hourly Aussie Strength Index stood at 51.48 (Bullish) by 1100 GMT. On the lower side, the major support stands at 0.7618 (21- day EMA) and any break below will drag the pair down till 0.7537 (55- day EMA)/ 0.7515/0.74450 (Jan 13th low). The major resistance is around 0.77497 (161.8% fibo) and a break above will take it till 0.77783 (Nov 8th high)/0.7800.
Equities Recap
European shares rallied as encouraging manufacturing surveys offset a steep decline in HSBC shares following a slump in the lender's annual pre-tax profit.
The pan-European STOXX 600 index increased 0.19 percent to 371.73 points, while the FTSEurofirst 300 index rallied 0.2 percent to 1,465.56 points.
Britain's FTSE 100 trades 0.28 percent down at 7,279.15 points, while mid-cap FTSE 250 shed 0.03 percent to 18,741.17 points.
Germany's DAX advanced 0.42 percent at 11,876.79 points; France's CAC 40 trades 0.1 percent higher at 4,869.46 points.
Tokyo's Nikkei rose 0.68 percent to 19,381.44 points, Australia's S&P/ASX 200 index fell 0.18 percent to 5,784.70 points and South Korea's KOSPI gained 0.89 percent to 2,102.93 points.
Shanghai composite index rallied 0.4 percent to 3,253.33 points, while CSI300 index jumped 0.3 percent to 3,482.82 points. Hong Kong’s Hang Seng shed 0.76 percent at 23,963.63 points.
Commodities Recap
Crude oil prices rose by more than 1 percent after exchange data showed hedge funds placed record bets on the North Sea and U.S. crude as OPEC production cut efforts reduced supply. International benchmark Brent crude was trading 1.0 percent up at $56.69 per barrel by 1003 GMT, having hit a high of $56.71 earlier, its strongest since Feb. 13. U.S. West Texas Intermediate crude rallied 1.46 percent at $54.32 a barrel, after rising as high as $54.33, its highest since Jan. 3.
Gold prices tumbled as the dollar strengthened, while investors waited for more clues on the timing of any hike in U.S. interest rates in a series of speeches by Federal Reserve officials this week and from minutes of a Fed meeting. Spot gold fell 0.6 percent to $1,230.21 per ounce by 0550 GMT, having touched a fresh 6-day low of $1229.37. U.S. gold futures lost 0.4 percent, at $1,234.60.
Treasuries Recap
The U.S. Treasuries slumped as markets await the Federal Open Market Committee (FOMC) members Neel Kashkari and Patrick T. Harker’s speech, scheduled to be held later in the day. The yield on the benchmark 10-year Treasury jumped over 2 basis points to 2.44 percent, the super-long 30-year bond yield also surged 2 basis points to 3.05 percent and the yield on short-term 2-year note remained nearly 2 basis points up at 1.22 percent.
The UK gilts continued to plunge ahead of the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held later in the day. The yield on the benchmark 10-year gilts, rose nearly 1-1/2 basis points to 1.24 percent, the super-long 30-year bond yields also jumped nearly 2-1/2 basis points to 1.97 percent and the yield on the short-term 2-year traded higher by nearly 2 basis points at 0.11 percent.
The German government bunds declined modestly, following higher-than-expected manufacturing Purchasing Managers’ Index (PMI) during the month of February. The yield on the benchmark 10-year bond rose nearly 1 basis point to 0.30 percent, the long-term 30-year bond yields also jumped over 1 basis point to 1.11 percent while the yield on short-term 1-year bond moved higher by nearly 2 basis points to -0.84 percent.
The Japanese government bonds traded flat as investors remain sidelined in any major trading activity amid a subdued session that witnessed data of little economic significance. The benchmark 10-year bond yield, hovered around 0.08 percent, the long-term 30-year bond yields also traded flat at 0.92 percent and the yield on the short-term 2-year note remained silent at -0.24 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.
The Australian government bonds plunged after the Reserve Bank of Australia (RBA) members remained optimistic over the economic growth of the country. Also, investors will now look forward to read the comments made by the RBA Governor Philip Lowe on February 22. 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.
