Market Roundup
- USD/JPY -0.20%, EUR/USD -0.06%, GBP/USD +0.31%
- DXY +0.04%, DAX +0.12%, Brent +0.02%, Iron +4.27%
- Italy Jan Industrial O/P -2.3% y/y vs 6.6% previous, 3.3% expected
- Swiss domestic sight deposit fall in latest week; EUR/CHF heads south
- Le Pen says her new Franc would drop about 10% vs EUR
- If Article 50 given final approval by parliament Mon, Tues earliest May could trigger A50
- CFTC IMM CTA data – Specs up net long USD bets to highest since early Feb
- CFTC data EUR shorts largest since early Jan, 59.5k, JPY 54.7k, GBP 81.4k
- BoJ to stand pat, may highlight disparity over growth, prices
- Japanese investors stampede into foreign stock funds – Nikkei
- US CommSec Ross - Japan trade deal a very high priority – Nikkei
- Japan Jan core machinery orders -8.2% y/y, -3.3% expected, largest fall in 8 moths
- PBOC Pan – To balance growth, risk prevention – MNI
- White House civil war breaks out over trade, fiery meeting in Oval Office
- UK May could have authority to invoke Article 50 by Tuesday – FT
Economic Data Ahead
- (1000 ET/1500 GMT) The Fed releases its labor market conditions index (LMCI) for the month of February. The indicator posted a rise of 1.3 in the previous month.
Key Events Ahead
- (0830 ET/1330 GMT) European Central Bank (ECB) President Mario Draghi's Speech.
- (1045 ET/1545 GMT) FedTrade 30-year Ginnie Mae max $1.0 bln
FX Beat
DXY: The dollar slumped versus its major peers on profit-taking, while investors braced for a potential interest rate hike in the United States. The greenback against a basket of currencies traded 0.1 percent down at 101.26, having hit a low of 101.01 earlier, its lowest since Feb. 28. FxWirePro's Hourly Dollar Strength Index stood at -73.14 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro eased after rising to a 1-month high earlier in the session, as nervous investors turned their focus to this week's Dutch parliamentary elections and upcoming Presidential election in France. The bid tone around the major continue to weaken as increasing expectations that the Federal Reserve would raise interest rates this week weighed on the euro bulls’ sentiment. The European currency traded 0.05 percent lower at 1.0664, having hit a high of 1.0700 earlier in the day. FxWirePro's Hourly Euro Strength Index stood at 46.93 (Neutral) by 1000 GMT. Any break above 1.0700 will take the pair till 1.07400/ 1.0800/ 1.0828. It should break above 1.0873 for further bullishness. On the lower side, any weakness can be seen below 1.0490 and break below will drag the pair till 1.04530/1.03450 (Jan 1st low).
USD/JPY: The dollar edged down following a wave of profit-taking on some of the greenback's gains. Investors now await this week's FOMC meeting outcome, where the central bank is expected to hike interest rates and provide an update on the economic projections. The pair traded 0.16 percent down at 114.60, having hit a high of 115.50 in the previous session, its highest since Jan. 19. FxWirePro's Hourly Yen Strength Index stood at -88.01 (Slightly Bearish) by 1000 GMT. Any close above 115 confirms minor bullishness, a jump till 115.94 is likely. On the lower side, minor support is around 113.80 (21- day EMA) and any break below 113.80 will drag it till 113/112.
GBP/USD: Sterling rose above the 1.2200 handle as investors expect Britain's lower house of parliament to reject the two changes made to Brexit bill in the upper house, clearing some uncertainty about Britain's EU exit talks. The major trades 0.4 percent higher at 1.2211, having hit a low of 1.2132 last week, its weakest since Jan. 17. FxWirePro's Hourly Sterling Strength Index stood at -23.95 (Neutral) by 1000 GMT. On the higher side, any break above 1.22430 will take the pair to next level 1.23000/1.23450. The next immediate support stands at 1.2130 and any break below will drag it down till 1.2080/1.20300. Against the euro, the pound trades 0.4 percent up at 87.34 pence, hovering away from an 8-week low of 87.87 earlier.
USD/CHF: The Swiss franc rose, extending gains for the third straight session, as the greenback eased across the board ahead of the Federal Reserve policy meeting outcome on Wednesday. The major traded 0.3 percent down at 1.0077, having hit a low of 1.0064 earlier in the session, its weakest since Mar. 1. FxWirePro's Hourly Swiss Franc Strength Index stood at 141.82 (Highly Bullish) by 1000 GMT. The pair should break above the weekly high of 1.01700 for further jump till 1.0200/1.02480. On the lower side, 1.00900 will be acting as immediate support and any break below will drag it down till 1.00690 (Mar 3rd low)/1.000.
AUD/USD: The Australian dollar rose, extending its post-NFP recovery momentum, amid ongoing broad U.S. dollar weakness and higher gold prices. The major trades 0.51 percent higher at 0.7573, having touched a low of 0.7491 on Thursday, it’s lowest since Jan. 17. FxWirePro's Hourly Aussie Strength Index stood at 106.84 (Highly Bullish) by 1000 GMT. On the lower side, the next immediate support stands at 0.74450 and any break below will drag the pair down till 0.7380 (61.8% retracement of 0.71599 and 0.77406). The major resistance is around 0.7530 (200- day EMA) and a break above will take it till 0.75869/0.7617 (21 – day EMA).
Equities Recap
European shares advanced in early trade as gains among miners offset weaker energy stocks, while investors braced for a potential interest rate hike in the United States and a Dutch election.
The pan-European STOXX 600 index advanced 0.1 percent to 373.50 points, while the FTSEurofirst 300 index rose 0.16 percent to 1,472.84 points.
Britain's FTSE 100 trades 0.06 percent up at 7,347.69 points, while mid-cap FTSE 250 added 0.14 percent to 18,988.17 points.
Germany's DAX edged up 0.04 percent at 11,968.38 points; France's CAC 40 trades 0.02 percent lower at 4,992.11 points.
Tokyo's Nikkei rose 0.15 percent to 19,633.75 points, Australia's S&P/ASX 200 index fell 0.34 percent to 5,755.80 points and South Korea's KOSPI gained 0.97 percent to 2,117.59 points.
Shanghai composite index climbed 0.76 percent to 3,237.02 points, while CSI300 index rallied 0.88 percent to 3,458.10 points. Hong Kong’s Hang Seng added 1.11 percent to 23,829.67 points.
Commodities Recap
Crude oil prices tumbled to their lowest in three months as U.S. drillers kept adding rigs despite OPEC efforts to curb crude output. International benchmark Brent crude was trading 0.1 percent down at $51.29 per barrel by 0924 GMT, having hit a low of $50.88 earlier, its lowest since Nov. 30. U.S. West Texas Intermediate crude traded 0.1 percent lower at $48.30 a barrel, after falling to a trough of $47.94 earlier in the day, its weakest since Nov. 30.
Gold prices gained, drifting further away from five-week lows touched in the previous session as elections in Europe triggered a fresh bout of risk aversion. Spot gold advanced 0.4 percent to $1,209.25 per ounce by 0931 GMT, having tumbled to its weakest since Jan. 31 at $1,194.86 on Friday. U.S. gold futures were up 0.6 percent at $1,208.10 an ounce.
Treasuries Recap
The U.S. Treasuries recovered as investors covered previous short positions after reading upbeat labor market report on Friday. The yield on the benchmark 10-year Treasury fell 1-1/2 basis points to 2.56 percent, the super-long 30-year bond yield jumped nearly 2-1/2 basis points to 3.15 percent and the yield on short-term 2-year note traded 1 basis point lower at 1.35 percent.
The UK gilts gained ahead of the 10-year auction, scheduled to be held on March 14. Also, investors remain focused on the Bank of England’s (BoE) monetary policy meeting, to be held on March 16 for further direction in the debt market. The yield on the benchmark 10-year gilts, slumped 2 basis points to 1.20 percent, the super-long 30-year bond yields also plunged 2 basis points to 1.81 percent and the yield on the short-term 2-year traded 2-1/2 basis points lower at 0.07 percent.
The German bunds jumped at the start of the week on as investors remain keen to watch the European Central Bank (ECB) Governor Mario Draghi’s speech, scheduled for later in the day. The yield on the benchmark 10-year bond slumped nearly 4 basis points to 0.45 percent, the long-term 30-year bond yields plunged over 4 basis points to 1.22 percent and the yield on the short-term 2-year bond traded 1-1/2 basis points lower at -0.82 percent.
The Japanese government bonds traded flat as investors remain cautious ahead of the Bank of Japan’s (BoJ) 2-day monetary policy meeting, scheduled to be held on March 15-16, announcing its decision on Thursday. The benchmark 10-year bond yield, hovered around 0.09 percent, while the long-term 30-year bond yields rose nearly 1 basis point to 0.87 percent and the yield on the short-term 2-year note also traded nearly 1 basis point to -0.25 percent.
The New Zealand government bonds jumped at the time of closing, following expectations of a drop in the country’s fourth-quarter gross domestic product (GDP), scheduled to be released on March 15. The yield on the benchmark 10-year bond, plunged 3-1/2 basis points to 3.39 percent at the time of closing, the yield on 7-year note also slipped nearly 3-1/2 basis points to 2.94 percent while the yield on short-term 5-year note traded 2-1/2 basis points lower at 2.64 percent.
The Australian bonds rebounded as investors remain glued to watch the February employment report, scheduled to be released on March 15. Further, the 10-year bond yields have formed a 'bullish gravestone Doji' pattern after two consecutive sessions of selling activity in the last week. The yield on the benchmark 10-year Treasury note, plunged 3-1/2 basis points to 2.95 percent, the yield on 15-year note also dived 3-1/2 basis points to 3.34 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.91 percent.
