Market Roundup
- Markets see-saw; equities/oil reverse early losses, UST yields rise into NY close.
- U.S. new home sales fall sharply (-9.2% vs -4.4% forecast).
- US Markit svcs PMI misses (49.8 vs 53.5 forecast), 1st time below 50 since Oct 2013.
- Fed's Lacker: there still a case for further rate hikes; successive rounds of QE have had little or no tangible effect on economy.
- Fed's Kaplan: Market trends can change very quickly & wouldn't overreact to recent volatility, Fed remains data dependent.
- Jittery markets send safe-haven yen soaring, sterling sliding, Euro hits 3-year low vs yen.
- BOE's Cunliffe: ready to use policy tools if needed, GBP hits 7-year low as Brexit concerns intensify.
- IMF: advanced economies should reduce reliance on mon policy, use fiscal policy as needed.
- Argentina bonds bounce on news of holdout deal .
- Moody's downgrades Brazil's issuer and bond ratings to Ba2; outlook negative.
Looking Ahead - Economic Data (GMT)
- 23:50 Japan Foreign Bond Investment *w/e -1318.3b-previous
- 23:50 Japan Foreign Invest JP Stock*w/e -562.9b- previous
- 00:30 Australia Capital Expenditure*Q4 forecast -3%, -9.2%- previous
- 00:30 Australia Building Capex* Q4 forecast -4.7%, -9.8%- previous
- 00:30 Australia Plant/Machinery Capex* Q4 forecast 0%, -8.2%- previous
Looking Ahead - Events, Other Releases (GMT)
- --:-- Japan Bank of Japan board member Takahide Kiuchi speaks to business leaders in Kagoshima
Currency Summaries
EUR/USD is likely to find support at 1.0950 levels and currently trading at 1.1011 levels. The pair has made session high at 1.1046 and hit lows at 1.1006 levels. Euro inched higher against dollar on Wednesday, as investors preferred euro as safe bet in the backdrop of falling oil prices which may impact inflation, which could have an impact on the Federal Reserve plans in its monetary policy. The Federal Reserve is widely expected to hint further rate hike plans in March. Overall dollar was weak safe heaven assets, as the dollar fell against safe haven currencies like the Japanese yen and Swiss Franc. The Euro briefly edged up towards $1.1027 levels in American afternoon trading, adding recovery from earlier European session. The dollar index slipped 0.1 percent.
GBP/USD is supported in the range of 1.3874 and currently trading at 1.3896 levels. It reached session high at 1.3948 and hit low at 1.3901 levels. Sterling slipped sharply to hit seven-year low against the dollar on Wednesday as heightened fears of a possible British exit from the European Union further intensified. The British pound fell below $1.3950 for the first time since March 2009 on persistent concerns that a June 23 referendum could lead to a Britain's exit from Eurozone. The Japanese yen gained against most currencies as oil prices and British exit fears drove interest in the currency. Despite oil prices rising 3 percent on strong U.S. gasoline demand offsetting worries over record-high crude stockpiles, some traders continued to bet the market will turn lower again on OPEC's stubbornness in not cutting output.
AUD/USD is supported around 0.7150 levels and currently trading at 0.7200 levels. It hit session high at 0.7213 and made session lows at 0.7144 levels. The Australian dollars stood tall against dollar pound on Wednesday, as late rebound in oil prices supported Aussie bulls. The Aussie eased initially towards $0.7143, from $0.7219 early, but regained strength after oil prices rebounded back towards 35$ per barrel after briefly hitting lows after surprise crude oil inventory data in the early US session . Support was found at $0. has gained 1.7 percent this month, having proved resilient to global growth worries and falling oil prices. Australian government bond futures were little changed, with the three-year bond contract steady at 98.230. The 10-year contract was flat at 97.5800, while the 20-year contract YXXc1 was also steady at 97.0450.
USD/CHF is supported at 0.9850 levels and is trading at 0.9888 levels. It has made session high at 0.9894 and lows at 0.9850 levels. The Swiss franc hit its strongest level in 1- weeks against the dollar on Wednesday, a day after the head of Switzerland's central bank warned of the limits of monetary policy and as subdued investor risk appetite boosted demand for perceived safe havens. Safe-haven demand was driven on Wednesday by a fall in oil prices after Saudi Arabia said it would not cut production. The Swiss franc strengthened 0.2 percent against the euro to trade at 1.09005 francs, its strongest since Jan 13. It also gained 0.1 percent against the dollar.
Equities Recap
European equities fell for a second straight session to a one-week low on Wednesday, with further selling pressure on commodities-related shares as prices of copper and crude oil slipped.
UK's benchmark FTSE 100 closed down by 1.7 percent, the pan-European FTSEurofirst 300 ended the day down by 2.46 percent, Germany's Dax ended down by 2.8 percent, France's CAC finished the day down by 2.2 percent.
U.S. stocks staged a last rally reversing earlier losses on Wednesday following late rebound crude oil prices.
Dow Jones closed up by 0.32 percent, S&P 500 ended up by 0.44 percent, Nasdaq finished the day up by 0.85 percent.
Treasuries Recap
U.S. Treasuries ended little changed on Wednesday as oil and stocks reversed earlier losses, with the volatile oil market seen likely to continue to govern bond moves in the near-term.
Benchmark 10-year notes rose 2/32 in price to yield 1.74 percent, after earlier falling as low as 1.65 percent.
Commodities Recap
Oil rallied as much as 3 percent on Wednesday with Brent prices helped by news of stalled loadings for the U.K.'s North Sea oil while U.S. crude futures rose after strong demand for gasoline offset worries about record high crude inventories.
Brent, the global benchmark for crude, settled up $1.14, or 3.4 percent, at $34.41 a barrel after market sources cited loading problems for North Sea crude.U.S. crude futures settled up 28 cents, or nearly 1 percent, at $32.15.
Gold rose above $1,250 an ounce and neared a one-year high on Wednesday, acting as counter against risk alongside top-rated government bonds as oil's earlier weakness rippled into global equity markets.
Spot gold rose as much as 2.1 percent to a session high of $1,252.91 an ounce, just shy of a one-year high of $1,260.60 reached on Feb. 11. At 2:25 p.m. EST (1925 GMT), it was up 0.5 percent at $1,233.06.
