Market Roundup
- EUR/USD +0.1%, USD/JPY +0.2%, GBP/USD +0.4%, DXY -0.1%,
- DAX +0.6%, CAC +0.1%, Brent +0.8%, Gold +0.1%, Copper +1.0%
- GBP finds its feet ahead of Lords Brexit debate at 15:30GMT
- Germany Jan PPI +0.7% m/m, +2.4% y/y vs previous +0.4%/+1.0%. +0.3%/+2.0% forecast
- Great Britain Feb CBI Manuf order book balance +8 vs previous +5. +3 forecast
- France Melenchon says he would hike spending by 273 bln euros
- SNB domestic deposits rise to CHF 467.99bln w/e Feb 17 from previous 464.516
- Cleveland Fed chief 'comfortable' raising rates if economy keeps performing
- South Africa-Latest Reuters poll sees 3.2% 2017 Def/GDP vs 3.0% previous poll
- German FinMin Schaeuble denies Grexit threat, Greece on right path
- German SPD moves ahead of Merkel’s party in poll
- EU Commission to warn Italy Wednesday over rising debt
- Italy Renzi defies foes, opens way for party leadership battle
- ECB Lautenschlaeger welcomes inflation rise but too soon for rate move
Economic Data Ahead
- (0830 ET/1330 GMT) Statistics Canada will report its wholesale trade for the month of December. The indicator rose 0.2 percent in the month of November.
- (1000 ET/1500 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of February. The index posted a final reading of -4.7 in the prior month.
Key Events Ahead
- US Presidents Day holiday
- (1030 ET/1530 GMT) Great Britain Lords Brexit debate
FX Beat
DXY: The dollar gained versus the Japanese yen, as rising European equities and expectations of U.S. interest rate hikes strengthened market sentiment. The greenback against a basket of currencies traded 0.1 percent down at 100.83, having hit a low of 100.41 on Thursday, it’s weakest since Feb. 9. FxWirePro's Hourly Dollar Strength Index stood at -35.66 (Neutral) by 1000 GMT.
EUR/USD: The euro steadied after declining significantly in the previous session on renewed concerns about the upcoming French elections. The major strengthened after data showed German producer price index rose 0.7 percent in January, beating expectations of 0.2 percent. The European currency traded 0.1 percent up at 1.0619, hovering away from a low of 1.0521 hit on Wednesday, it’s lowest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at 56.28 (Bullish) by 1000 GMT. On the higher side 1.0700-1.07210 (21- day EMA and 61.8% retracement will be acting as major near-term resistance and any break above confirms minor trend reversal in the short term. Any break above targets 1.0745/1.0800 level. The next immediate support is around 1.05800 and any break below will drag it till 1.05200/1.04500.
USD/JPY: The dollar rose above the 113.00 handle after falling to a 1-week low on Friday, as improvement in investor's risk appetite and expectations of U.S. interest rate hikes boosted the bid tone around the greenback. The pair trades 0.23 percent higher at 113.15, having hit a low of 112.61 the previous session, its lowest since Feb 9. FxWirePro's Hourly Yen Strength Index stood at 62.99 (Bullish) by 1000 GMT. The minor resistance is around 113.25 (55- day EMA) and any break above will take it till 113.60 (daily Kijun-Sen)/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 rose after data showed British industrial trends survey- orders advanced to 8, surpassing estimates of 3 and previous reading of 5. Investors now await the House of Lords debate on UK PM May’s Brexit plan due later this session, ahead of Tuesday’s Bank of England Carney’s speech. Sterling trades 0.5 percent up at 1.2467, hovering away from a low of 1.2383 hit on Wednesday, its weakest since Feb. 7. FxWirePro's Hourly Sterling Strength Index stood at 62.18 (Bullish) by 1000 GMT. On the lower side, any violation below 1.2380 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 2017 high)/1.27750 (Dec 6th high). Against the euro, the pound trades 0.3 percent up at 85.17 pence, having hit a 10-day low of 85.91 earlier in the session.
USD/CHF: The Swiss franc edged down, extending previous session losses, as improved investor's risk appetite boosted the bid tone around the dollar. The major trades up at 1.0025, having touched a low of 0.9963 on Friday, it’s lowest since Fed. 9. FxWirePro's Hourly Swiss Franc Strength Index stood at 19.36 (Neutral) by 1000 GMT. On the higher side, break above 1.01180 will take the pair till 1.0342 in the short term. The major intraday resistance stands at 1.00450 and any break above will take it till 1.0070/1.0120. Any violation below 0.9980 will drag it down till 0.9950/0.99290.
AUD/USD: The Australian dollar trimmed gains after rising to an intra-day high of 0.7690 as investors refrained from taking big bets ahead of the release of the minutes of the Reserve Bank of Australia's February meeting on Tuesday. The Aussie trades flat at 0.7669, having hit o a high of 0.7731 hit on Thursday, its highest since Nov. 10. FxWirePro's Hourly Aussie Strength Index stood at -33.31 (Neutral) by 1000 GMT. On the lower side, the major support stands at 0.7611 (21- day EMA) and any break below will drag it down till 0.7513 (100- day EMA)/0.7445. 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 gained, strengthened by stronger telecoms stocks, while the dollar eased as investors remained cautious over the timing of a U.S. interest rate hike and European political uncertainties.
The pan-European STOXX 600 index increased 0.23 percent to 371.08 points, while the FTSEurofirst 300 index rallied 0.22 percent to 1,463.54 points.
Britain's FTSE 100 trades 0.03 percent up at 7,301.68 points, while mid-cap FTSE 250 added 0.02 percent to 18,711.56 points.
Germany's DAX advanced 0.57 percent at 11,824.47 points; France's CAC 40 trades 0.13 percent higher at 4,873.75 points.
Tokyo's Nikkei rose 0.09 percent to 19,251.08 points, Australia's S&P/ASX 200 index fell 0.27 percent to 5,790.00 points and South Korea's KOSPI gained 0.18 percent to 2,084.39 points.
Shanghai composite index rallied 1.2 percent to 3,239.96 points, while CSI300 index jumped 1.5 percent to 3,471.39 points. Hong Kong’s Hang Seng added 0.5 percent at 24,146.08 points.
Commodities Recap
Crude oil prices rallied nearly 1 percent as efforts by producers to cut output and bring the market into balance boosted market sentiment, however, an increase in U.S. drilling rigs and record stockpiles capped the upside. International benchmark Brent crude was trading 0.9 percent up at $53.81 per barrel by 0955 GMT, having hit a low of $55.13 hit on Friday, it’s weakest since Feb. 8. U.S. West Texas Intermediate crude gained 0.9 percent at $53.80 a barrel, after falling as low as $52.71 on Thursday, its lowest since Feb. 9.
Gold prices rose as investors remained cautious ahead of series of speeches from U.S. Federal Reserve officials later in the week for clues on the timing of possible interest rate hikes. Spot gold edged higher 0.2 percent to $1,236.47 per ounce by 1002 GMT, having hit its highest since Feb. 9 at $1,243.69 on Friday. U.S. gold futures fell 0.4 percent to $1,234.8.
Treasuries Recap
The UK gilts plunged ahead of the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held on Tuesday. Also, investors are waiting to watch the fourth-quarter gross domestic product (GDP), due for release on February 22. The yield on the benchmark 10-year gilts, rose nearly 1-1/2 basis points to 1.22 percent, the super-long 30-year bond yields also jumped 1-1/2 basis points to 1.94 percent and the yield on the short-term 2-year traded higher by 1 basis point at 0.09 percent.
The German government bunds slumped as investors remain cautious ahead of the 30-year auction, scheduled to be held on February 22. Also, markets wait to read the Eurozone’s January consumer price inflation data, due on the same day. The yield on the benchmark 10-year bond, plunged 2-1/2 basis points to 0.32 percent, the long-term 30-year bond yields also slumped over 2-1/2 basis points to 1.10 percent while the yield on short-term 2-year bond moved higher by 2 basis points to -0.79 percent.
The Japanese government bonds gained after the country’s exports registered a worse-than-expected decline during the month of January, following hovering uncertainties over the United States President Donald Trump’s trade policies. The benchmark 10-year bond yield, fell 1/2 basis point to 0.08 percent, the long-term 30-year bond yields also slipped 1/2 basis point to 0.92 percent and the yield on the short-term 3-year note traded 1 basis point lower at -0.15 percent.
The New Zealand government bonds jumped at the time of closing, tracking firmness in U.S. Treasuries after the President of the Federal Reserve of Cleveland, Loretta Mester remained hawkish comments over the state of the U.S. economy. The yield on the benchmark 10-year bond, jumped 3-1/2 basis points to 3.32 percent at the time of closing, the yield on 7-year note also surged over 3 basis points to 2.89 percent and the yield on short-term 2-year note traded 3-1/2 basis points higher at 2.19 percent.
The Australian government bonds surged at the start of the week as investors wait to watch the Reserve Bank of Australia’s (RBA) meeting minutes, scheduled to be released early Tuesday. The yield on the benchmark 10-year Treasury note, fell 1-1/2 basis points to 2.80 percent, the yield on 15-year note slumped nearly 2 basis points to 3.24 percent and the yield on short-term 2-year also plunged 2 basis points to 1.84 percent.
