Market Roundup
- EUR/USD 0.09%, USD/JPY -0.02%, GBP/USD 0%, EUR/GBP 0.06%
- DXY 0.03%, DAX -0.02%, FTSE 0.12%, Brent 0.18%, Gold 0.09%
- May expected to offer her job for Brexit deal as parliament tries multiple choice
- EU urged to consider long Brexit delay for British "sphinx"
- As growth risks rise, Draghi says ECB can delay rate hike again
- ECB's bank loan terms will be flexible: Praet
- Japan vows to raise sales tax as record budget passes parliament
- France Mar Consumer Confidence, 96, 96 f'cast, 95 prev
- France Feb Producer Prices MM, 0.4%, 0.1% prev
- Italy Mar MFG Business Confidence, 100.8, 101.3 f'cast, 101.7 prev, 101.6 r'vsd
- Italy Mar Consumer Confidence, 111.2, 112.0, 112.4 prev
Economic Data Ahead
- (0830 ET/1230 GMT) The United States releases trade balance figures for the month of January. The economy's trade deficit is expected to have narrowed to $57.0 billion from 59.8 billion in December.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of January. The economy recorded a trade deficit of $80.0 billion in the previous month.
- (0830 ET/1230 GMT) Statistics Canada is likely to report that international trade deficit narrowed to C$3.50 billion in January from C$4.49 billion in December.
- (1000 ET/1400 GMT) Swiss National Bank releases its Quarterly Bulletin.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending March 22.
- (1100 ET/1500 GMT) The U.S. Commerce Department is likely to report that current account deficit expanded to $130.0 billion in the fourth quarter from $124.8 billion in the previous quarter.
Key Events Ahead
- (0930 ET/1330 GMT) ECB Executive board member Yves Mersch participates in a debate at a conference in Frankfurt, Germany
- (1200 ET/1600 GMT) Federal Reserve issues annual benchmark revisions to its U.S industrial production and capacity use data from 1972 through March 2019
- (1330 ET/1730 GMT) Governor of Bank of France Francois Villeroy de Galhau speaks in Geneva
- (1900 ET/2300 GMT) Federal Reserve Bank of Kansas City President Esther George is scheduled to speak on the economic and monetary policy outlook before the Money Marketeers of New York University Inc in New York.
FX Beat
DXY: The dollar index trimmed gains after advancing to a 2-week peak on the back of a surge in U.S. Treasury yields. The greenback against a basket of currencies traded 0.05 percent up at 96.79, having touched a peak of 96.98, its highest since Mar. 13. FxWirePro's Hourly Dollar Strength Index stood at -11.51 (Neutral) by 1000 GMT.
EUR/USD: The euro rebounded from a 2-week low after European Central Bank President Mario Draghi signalled more assistance for banks via a cheap loans programme and said the central bank could further delay a planned increase in interest rates if required. The European currency traded 0.1 percent up at 1.1280, having touched a low of 1.1246, its lowest since Mar. 12. FxWirePro's Hourly Euro Strength Index stood at -95.16 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 1.1359 (Mar. 18 High), a break above targets 1.1408 (Mar. 1 High). On the downside, support is seen at 1.1221 (Mar. 11 Low), a break below could drag it till 1.1176 (Mar. 7 Low).
USD/JPY: The dollar declined as risk sentiment deteriorated after China's industrial firms posted their worst slump in profits since late 2011 in the first two months of this year. The major was trading 0.3 percent down at 110.34, having hit a low of 109.70 on Monday, its lowest since Feb. 8. FxWirePro's Hourly Yen Strength Index stood at 15.81 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. trade balance, and current account figures. Immediate resistance is located at 110.89 (Mar. 22 High), a break above targets 111.23 (Feb. 25 High). On the downside, support is seen at 110.25 (Feb. 15 Low), a break below could take it lower at 109.63 (Dec. 31 Low).
GBP/USD: Sterling consolidated within narrow ranges, as investors refrained from taking big positions ahead of a closely watched vote by British lawmakers on a range of options on how to clear the political impasse over Brexit. The major traded flat at 1.3211, having hit a low of 1.3003 on Thursday; it’s lowest since Mar. 11. FxWirePro's Hourly Sterling Strength Index stood at 126.16 (HIghly Bullish) 1100 GMT. Investors’ attention will remain on UK parliamentary vote on Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3254 (Mar. 4 High), a break above could take it near 1.3311 (Mar. 19 High). On the downside, support is seen at 1.3146 (Mar. 20 Low), a break below targets 1.3068 (Mar. 7 Low). Against the euro, the pound was trading 0.1 percent down at 85.36 pence, having hit a low of 87.22 on Thursday, it’s lowest since Feb. 22.
USD/CHF: The Swiss franc rose to a 6-day high, as fears of a global economic slowdown and concerns of possible U.S. recession dented investor risk sentiment. The major trades 0.1 percent down at 0.9933, having touched a low of 0.9894 last week; it’s lowest since Jan. 16. FxWirePro's Hourly Swiss Franc Strength Index stood at 103.92 (Highly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9986 (Jan. 22 High) and any break above will take the pair to next level till 1.0024 (Feb. 22 High). The near-term support is around 0.9895 (Jan.17 Low), and any close below that level will drag it till 0.9852 (Jan. 4 Low).
Equities Recap
European shares eased, weighed down by global growth fears, while sterling traded flat ahead of British parliament's vote on how to break the Brexit impasse.
The pan-European STOXX 600 index tumbled 0.3 percent at 375.98 points, while the FTSEurofirst 300 index declined 0.3 percent to 1,479.88 points.
Britain's FTSE 100 trades 0.3 percent down at 7,173.55 points, while mid-cap FTSE 250 gained 0.1 to 18,921.59 points.
Germany's DAX fell 0.4 percent at 11,379.38 points; France's CAC 40 trades 0.5 percent lower at 5,283.73 points.
Commodities Recap
Crude oil prices edged lower, weighed down by growing fears over the impact of a global economic slowdown on demand, however, the downside appears limited as further disruptions to Venezuela's crude exports helped tighten global inventories in recent weeks. International benchmark Brent crude was trading 0.4 percent down at $67.74 per barrel by 1021 GMT, having hit a high of $68.26, its highest since Mar. 21. U.S. West Texas Intermediate was trading 0.9 percent lower at $59.46 a barrel, after rising as high as $60.37 on Thursday, its highest since the Nov. 12.
Gold prices steadied as fears of a possible recession in the United States sent investors seeking safety in safe-haven assets. Spot gold was trading 0.2 percent up at $1,318.22 per ounce by 1026 GMT, having touched a high of $1,324.40 on Monday, its highest since Feb 28. U.S. gold futures were down 0.1 percent at $1,313.20 an ounce.
Treasuries Recap
The U.S. Treasury yields slumped during the afternoon session, as investors still fretted about the possibility of a near-term global economic slowdown, especially after last Friday, the yield curve between the 3-month Treasury bill and the 10-year bond inverted, a usual sign that a recession is nearing. Investors shall divert partial focus on the country’s trade balance data for the month of January, 5-year note auction and FOMC member George’s speech, all three due today by 12:30GMT, 17:00GMT and 21:30GMT respectively. The yield on the benchmark 10-year Treasury yield slumped 3 basis points to 2.382 percent, the super-long 30-year bond yields suffered 2-1/2 basis points to 2.843 percent and the yield on the short-term 2-year plunged nearly 5-1/2 basis points to 2.206 percent.
The United Kingdom’s gilts gained during the afternoon session, as investors will remain focussed today on the House of Commons ahead of the MPs’ first round of indicative votes on various Brexit scenarios. These votes will simply select the most popular options that will be debated and voted on individually next Monday. The yield on the benchmark 10-year gilts, suffered 2 basis points to 0.989 percent, the super-long 30-year bond yields slumped nearly 2-1/2 basis points to 1.507 percent and the yield on the short-term 2-year slipped nearly 1 basis point to 0.656 percent
The Japanese government bonds remained nearly flat towards the close of Asian session amid a silent day that witnessed data of little economic significance ahead of the country’s industrial production and retail sales data for the month of February, both scheduled to be released on March 28 by 23:50GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around -0.067 percent, the yield on the long-term 30-year traded flat at 0.537 percent and the yield on short-term 2-year remained tad higher at -0.163 percent.
The Australian government bonds rallied during the Asian trading session as investors moved towards safe-haven buying on fear that the partly inverted U.S. yield curve would bring the much-anticipated recession closer. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell to its record low of 1.75 percent on Tuesday, now floating 3-1/2 basis points lower at 1.773 percent, the yield on the long-term 30-year bond also plunged 3 basis points to 2.422 percent and the yield on short-term 2-year too traded 2-1/2 basis points lower at 1.465 percent.
