Market Roundup
- US construction spending jumps to eight-year high (+1.5% vs 0.4% forecast).
- US Mfg stabilizing (49.5 vs 48.2 previous), fifth consecutive month in contraction.
- Chinese Officials Assure Lew There's No Plan to Devalue Yuan. Stocks see biggest gains since January, USD rises after data points to econ recovery.
- Oil up 2 pct on Wall Street after early slide on US stockpile worry.
- The GDPNow model forecast for real GDP growth in Q1 '16 is 1.9% down from 2.1% on Feb 26.
- Canada economy slows in Q4 (+0.8%) but still tops expectations (forecast 0%).
- Russia says talks on oil output stabilization to continue - TASS.
- Russia's forex reserves are not for financing current economic problems - Putin.
- Iran says oil exports still constrained post-sanctions
Looking Ahead - Economic Data (GMT)
- 00:30 Australia GDP q/q Q4* forecast 0.4%, 0.9%-previous
- 00:30 Australia GDP y/y Q4* forecast 2.5%, 2.5%- previous
- 00:30 Australia GDP Cap Exp*Q4 -4%- previous
- 00:30 Australia GDP Final Cons*Q4 0.7%- previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0830 levels and currently trading at 1.0869 levels. The pair has made session high at 1.0880 and hit lows at 1.0835 levels. The dollar rose against euro on Tuesday as data showed the U.S. factory activity expanded in February, supporting the view the Federal Reserve would raise interest rates this year. The data strengthened expectations the U.S. economy is gaining steam. The dollar index, which measures the greenback against a basket of six major rivals, was last up 0.15 percent, at 98.359, after hitting a nearly one-month high of 98.570 dollar remained higher on the day, however, investors awaited jobs data that will be released on Friday. A strong jobs report will boost expectations that the Federal Reserve is closer to raising interest rates, which many see as likely to begin in September. The euro was last down 0.08 percent against the dollar, at $1.0862, while the dollar was down 0.07 percent against the Swiss franc, at 0.9971 franc.
GBP/USD is supported in the range of 1.3982 and currently trading at 1.3950 levels. It reached session high at 1.3984 and hit low at 1.3904 levels. Sterling inched lower against the dollar on Tuesday, as the pair was weighted down by weak British manufacturing growth in February. British manufacturing had their weakest growth in nearly three years in February as demand at home slowed and export orders fell. The Manufacturing Purchasing Managers' Index (PMI) fell sharply to 50.8, worse than the forecasted figures at 52.2. Sterling was trading flat on the day at $1.3919, less than a cent away from a seven-year low of $1.3836 struck on Monday. Though the U.S. numbers showed manufacturing activity contracted for a fifth straight month in February, there were signs the embattled sector was stabilizing. The pound has suffered an aggressive sell-off over the past three months, suffering an almost 9 percent fall on a trade-weighted basis, driven largely by worries that Britons may vote to leave the European Union in a referendum on June 23.
USD/CAD is supported at 1.3380 levels and is trading at 1.3422 levels. It has made session high at 1.3426 and lows at 1.3383 levels. The Canadian dollar firmed against its U.S. counterpart on Tuesday, hitting 12-week high as oil prices rose and after Canada's economy grew more than expected in the fourth quarter. The Canadian economy slowed substantially in the quarter, but the 0.8 percent annualized increase in gross domestic product topped both economists' and policymakers' expectations for zero growth. Meanwhile, U.S. crude prices were up 0.30 percent at $33.85 a barrel after China's surprise monetary policy easing stoked expectations for higher oil demand from the world's largest commodities consumer and signs emerged that a global supply glut was starting to deflate. The currency touched its strongest level since Dec. 7 at C$1.3456, while its weakest was C$1.3550.
USD/JPY is supported around 113.50 levels and currently trading at 113.87 levels. It hit session high at 114.24 and made session lows at 113.76 levels. The dollar rose to a 2-week high against the Japanese yen on Tuesday, as a stronger-than-forecast U.S. factory activity in February revived bets the Federal Reserve would raise interest rates this year. The Institute for Supply Management reported its index of national factory activity rose to 49.5 in February from 48.2 the previous month, beating analysts' expectations of 48.5. The greenback rose more than 1 percent against the yen, to 114.18 yen, its highest level since Feb. 18, reversing Monday's drop against the Japanese currency and putting the dollar on track for its biggest daily percentage gain against the yen in more than a month.
Equities Recap
European shares rose on Tuesday, with exchange operator London Stock Exchange hitting record highs on speculation of a possible bidding war and auto stocks boosted by continued weakness in the euro.
Britain's blue-chip FTSE 100 index closed up by 0.83 percent, France's benchmark CAC-40 index closed up by 1.16 percent, Germany's DAX ended up 2.23 percent, meanwhile the pan-European Eurofirst 300 index was up by 1.38 percent.
Wall Street surged on Tuesday to its highest since early January, led by financial and technology stocks after encouraging U.S. factory and construction data suggested the world's biggest economy was regaining momentum.
Dow Jones closed up by 2.08 percent, S&P 500 ended up by 2.36 percent, Nasdaq finished the day up by 2.87 percent.
Treasuries Recap
U.S. Treasury yields rose to record highs on Tuesday after data showed U.S. manufacturing activity rebounded in February in a sign of economic resilience that weakened investor demand for safe-haven government debt.
The benchmark 10-year note was last down 26/32 in price to yield 1.828 percent, up from 1.74 percent late on Monday.
The 30-year bond was last down 1-24/32 in price to yield 2.701 percent, up from 2.616 percent late on Monday.
Commodities Recap
Oil markets rose as much 2 percent on Tuesday, maintaining their charge higher after a Wall Street rally helped turn around crude prices depressed initially by expectations that U.S. inventories had hit another record high.
Brent, the global benchmark for crude oil, settled up 24 cents, or 0.6 percent, at $36.81 a barrel, after touching a session low at $35.95.
U.S. crude closed up 65 cents, or 2 percent, at $34.40 a barrel, after an intraday low at $33.37.
Gold turned lower on Tuesday, as the dollar and global equity markets rose on better-than-expected U.S. data, fueling speculation the Fed will raise U.S. interest rates.
Spot gold was down 0.2 percent at $1,235.96 an ounce at 3:12 p.m. EST (2012 GMT), after its biggest monthly gain in four years on safe-haven buying spurred by global economic concerns.
U.S. gold futures for April delivery settled down 0.3 percent at $1,230.80.
