Market Roundup
- EUR/USD -0.1%, USD/JPY -0.1%, GBP/USD flat, DXY +0.2%,
- DAX -0.1%, CAC +0.2%, Brent +1.3%, Gold +0.1%, Copper -1.0%
- Eyes still on French politics as poll shows Le Pen gains
- Oil prices rise after report shows drop in U.S. stocks
- Great Britain CBI Feb retail sales balance +9 vs previous -8. 0 forecast
- Germany Q4 GDP detailed 0.4% q/q, 1.2% y/y vs previous 0.4%/1.2%. 0.4%/1.6% forecast
- Germany GfK Consumer sentiment 10.0 vs previous 10.2. 10.1 forecast
- Switzerland Q4 Industrial Orders -3.3% vs previous 6.2% revised
- Mnuchin says dollar strength reflects confidence in U.S economy -WSJ
- Le Pen increases first round lead in French election - poll
- Net migration to Britain falls to lowest in more than 2 years
- Bundesbank braces for QE losses after lowest profit in decade
- Weidmann: ECB should discuss whether should continue to signal poss of more expansion policy
- Negative rates help Swiss swing to 2016 budget surplus
- Australia Q4 new CAPEX -2.1% q/q, -1.0% f/c. Aussie slips
Economic Data Ahead
- (0830 ET/1330 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of January. The index stood at 0.14 in the prior month.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 2,000 to a seasonally adjusted 241,000 for the week ended Feb. 17 while continuing claims for the week ended Feb. 10 is expected to decline to 2.051 m from 2.076 m.
- (0900 ET/1400 GMT) The Federal Housing Finance Agency releases its housing price index for the month of December. The index rose 0.5 percent in the previous month.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending February 17.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 17.
- (1100 ET/1600 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of February. The indicator stood at 20 in the previous month.
Key Events Ahead
- (0835 ET/1335 GMT) Atlanta Fed President Dennis Lockhart will speak on "Looking Back on 10 Years at the Federal Reserve Bank of Atlanta" before the 2017 Banking Outlook Conference.
- (1145 ET/1645 GMT) FedTrade operation 30-yr Fannie Mae / Freddie Mac (max $1.475 bn)
- (1230 ET/1730 GMT) Fed Term Deposit Facility test operation closes (7-day FRN, IOER+0.01%)
- (1300 ET/1800 GMT) Federal Reserve Bank of Dallas President Robert Kaplan will participate in a moderated Q&A session hosted by the Tarrant County Bankers Association, in Fort Worth, Texas.
FX Beat
DXY: The dollar attempted a minor recovery from the Federal Reserve's policy meeting minutes-led decline. The greenback against a basket of currencies traded 0.03 percent up at 101.36, having hit a high of 101.72 the day before, it’s strongest since Feb. 15. FxWirePro's Hourly Dollar Strength Index stood at -22.09 (Neutral) by 1000 GMT.
EUR/USD: The euro edged down as the greenback attempted a minor recovery from FOMC minutes led-decline. However, the downside was limited as Francois Bayou pulled out of the French Presidential race, giving Macro extra chances of beating anti-Euro Marine Le Pen. The European currency traded 0.1 percent down at 1.0547, having hit a low of 1.0493 in the previous session, it’s lowest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at -109.15 (Highly Bearish) by 1000 GMT. On the higher side, next immediate resistance is around 1.0570 (100- H EMA) and any break above will take the pair till 1.0595 (200 H MA)/1.06085 (61.8% retracement of 1.06793 and 1.04938)/1.06790 (21- day MA). The break below 1.0453 confirms major trend reversal, a decline till 1.03450 (Jan 13th low) is possible.
USD/JPY: The dollar declined, extending previous session losses as the U.S. Treasury yields dropped following the FOMC minutes released on Wednesday. Markets now await the U.S. unemployment claims, the Chicago National Activity Index and housing price and a speech by Atlanta Fed D. Lockhart for further clues on the strength of the economy and Fed interest rate path. The pair trades 0.1 percent lower at 113.20, having hit low of 112.90 in the previous session. FxWirePro's Hourly Yen Strength Index stood at 13.28 (Neutral) by 1000 GMT. The minor resistance is around 113.80 and any break above will take the pair till 114.30 (61.8% retracement of 118.61 and 111.59)/114.95 (Feb 15 high). On the lower side, minor support is around 112 and any break below 112 will drag it till 111.66.
GBP/USD: Sterling rose, reversing most of its previous session losses after data showed British retail sales partially recovered in February from a sharp fall last month. The Confederation of British Industry's monthly retail sales balance rose to 9 from a previous reading of -8, when it registered its biggest one-month drop since records began in 1983. Sterling trades 0.1 percent up at 1.2458, having hit a high of 1.2507 on Wednesday, its strongest since Feb. 17. FxWirePro's Hourly Sterling Strength Index stood at 102.14 (Highly Bullish) by 1000 GMT. On the lower side, any violation below 1.2400 will drag the pair down till 1.23450 (50% retracement of 1.19860 and 1.27060). The minor trend reversal can happen only above 1.2580 level and any break above will take the pair till 1.2705 (Feb 2 high)/1.27750 (Dec 6 high). Against the euro, the pound trades 0.05 percent up at 84.64 pence, having hit a 2-month high of 84.02 the day before.
USD/CHF: The Swiss franc edged up after falling to a 5-week low in the previous session, as the dollar eased across the board. The major trades 0.03 percent down at 1.0099, having touched a high of 1.0140 on Wednesday, its highest since Jan 12. FxWirePro's Hourly Swiss Franc Strength Index stood at -77.92 (Bearish) by 1000 GMT. Any break above 1.01180 confirms minor bullishness, a jump till 1.02480 is likely. On the lower side, major support is around 1.0040 and any break below targets 1.000 (daily Kijun- Sen)/0.9960 (Feb 17th low)/0.9927 (Feb 8th low).
AUD/USD: The Australian dollar eased following a larger-than-expected decline in Australian private capital expenditure for the fourth-quarter of 2016. The major failed to benefit from the ongoing weakness in the greenback following FOMC meeting minutes released on Wednesday. The Aussie trades 0.1 percent down at 0.7693, drifting away from a high of 0.7714 hit the prior day, its highest since Feb.16. FxWirePro's Hourly Aussie Strength Index stood at -25.40 (Neutral) by 0400 GMT. On the lower side, the major support stands at 0.7630 (21- day EMA) and any break below will drag the pair down till 0.7547 (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 held gains near a 14-month high following a rally in stocks of financial and insurer companies, while the dollar eased after minutes of the U.S. Federal Reserve meeting showed policymakers in no big hurry to hike interest rates.
The pan-European STOXX 600 index increased 0.15 percent to 373.94 points, while the FTSEurofirst 300 index rallied 0.12 percent to 1,474.39 points.
Britain's FTSE 100 trades 0.12 percent up at 7,293.77 points, while mid-cap FTSE 250 added 0.14 percent to 18,703.49 points.
Germany's DAX advanced 0.08 percent at 12,007.44 points; France's CAC 40 trades 0.32 percent higher at 4,911.62 points.
Tokyo's Nikkei eased 0.04 percent to 19,371.46 points, Australia's S&P/ASX 200 index fell 0.35 percent to 5,784.60 points and South Korea's KOSPI gained 0.05 percent to 2,107.63 points.
Shanghai composite index declined 0.3 percent to 3,251.38 points, while CSI300 index dropped 0.5 percent to 3,473.32 points. Hong Kong’s Hang Seng shed 0.4 percent to 24,114.86 points.
Commodities Recap
Crude oil prices rose nearly 1 percent after industry data showed an unexpected decline in the U.S. inventories, indicating that a global glut may be ending following efforts by OPEC to cut production. International benchmark Brent crude was trading 1.0 percent up at $56.65 per barrel by 0958 GMT, having hit a peak of $57.27 on Tuesday, its strongest since Feb. 2. U.S. West Texas Intermediate crude gained 0.9 percent at $54.35 a barrel, after rising as high as $55.08 earlier in the week, its highest since Jan. 3.
Gold prices steadied as uncertainty surrounding U.S. President Donald Trump's economic policy and Wednesday's Federal Reserve minutes, which failed to give the market direction continued to weigh on the dollar. Spot gold edged up 0.03 percent to $1,237.57 per ounce at 1003 GMT, having hit its lowest since Feb. 15 at $1,225.93 earlier in the week. U.S. gold futures rose 0.3 percent to $1,237.5.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.4094 percent lower by 0.009 bps, while 5-year yield was down by 0.018 bps at 1.9013 percent.
German equivalents, the benchmark for euro zone borrowing, edged up 1 basis point to 0.28 percent, having closed on Wednesday at 0.27 percent. French 10-year yields fell 2 bps to 1.01 percent.
Japanese government bonds firmed after better-than-expected demand at an auction of 20-year JGBs. The benchmark 10-year JGB yield inched down 0.5 bp to 0.075 percent, while 10-year JGB futures were up 0.13 point at 150.21. Superlong JGBs outperformed, with the 20-year yield falling 3 bp to 0.660 percent and the 30-year JGB yield also shedding 3 bp to 0.865 percent.
Australian government bond futures rose, with the 3-year bond contract up 3 ticks at 97.960. The 10-year contract added 4 ticks to 97.1750, while the 20-year contract edged up 3.5 ticks to 96.5500. New Zealand government bonds gained, sending yields 2.5 basis points lower.
