Market Roundup
• G7 conference call planned later on Tuesday
• ECB says stands ready to take targeted measures
• Swiss GDP (YoY) (Q4) 1.5%,1.3% forecast, 1.1% previous
• Swiss GDP (QoQ) (Q4) 0.3%, 0.2% forecast, 0.4% previous
• French Jan Government Budget Balance -20.0B, -92.8B previous
• Spanish Unemployment Change -7.8K, 90.2K previous
• Italian Jan Monthly Unemployment Rate 9.8%, 9.8% forecast, 9.8% previous
• UK Feb Construction PMI 52.6, 48.8 forecast, 48.4 previous
• EU Feb Core CPI (YoY) 1.2%, 1.1% forecast, 1.1% previous
• EU Feb CPI (YoY) 1.2%, 1.2% forecast, 1.4% previous
• EU Feb CPI (MoM) 0.2%, -1.0% forecast, -1.0% previous
• EU Jan Unemployment Rate 7.4%, 7.4% forecast, 7.4% previous
Looking Ahead - Economic Data (GMT)
• 13:55 US Redbook (MoM) -0.2% previous
• 13:55 US Redbook (YoY) 5.4% previous
• 14:55 US Feb ISM NY Business Conditions 45.8% previous
• 14:55 US Feb ISM-New York Index 866.9 previous
• 15:20 New Zealand GlobalDairyTrade Price Index -2.9% previous
Looking Ahead - Economic events and other releases (GMT)
•19:50 US FOMC Member Mester Speech
Fx Beat
EUR/USD: The euro was little changed against dollar on Tuesday as investors bet on the U.S. Federal Reserve easing policy in a bid to counter the negative impact from the spread of the new coronavirus. Global risk assets, including equities, were hammered hard last week as investors worried about the economic impact of the global spread of the virus. The damage to global markets due to the spread of the coronavirus has raised hopes of a coordinated policy action from global monetary authorities.But policymakers at the European Central Bank, including its president, Christine Lagarde, have shown reluctance to cut rates from the current minus 0.5%. Immediate resistance can be seen at 1.1182 (March 2nd high), an upside break can trigger rise towards 1.1200 (Psychological level).On the downside, immediate support is seen at 1.1050 (100 DMA), a break below could take the pair towards 1.1033 (5 DMA).
GBP/USD: Sterling edged higher as dollar on Tuesday, as Britain’s fractious trade talks with the EU and expectations of rate cuts to counter coronavirus damage kept the currency near recent 4-1/2-month lows. The first round of talks with the EU’s executive arm, the European Commission, is due to last until Thursday, with half a trillion euros’ worth of annual trade at stake.Sterling, which has come under heavy selling pressure in recent days, recovered some ground. Sterling was up 0.3% at $1.2791 against the dollar , holding above a recent 4-1/2 month low of around $1.2726.Immediate resistance can be seen at 1.2825 (5 DMA), an upside break can trigger rise towards 1.2892 (11 DMA).On the downside, immediate support is seen at 1.2729 (Lower BB), a break below could take the pair towards 1.2700 (Psychological level).
USD/CHF: The dollar dipped against the Swiss franc on Tuesday as uncertainty to counter the economic damage inflicted by the coronavirus increased demand for Swiss franc. G7 finance ministers and central bank governors hold a conference call later on Tuesday to discuss how to deal with the outbreak and its economic fallout. In a statement, expected on Tuesday or Wednesday, the G7 countries will pledge to work together to mitigate damage to their economies. At (GMT 12:56), Greenback dipped 0.19% versus the Swiss franc to 0.9570. Immediate resistance can be seen at 0.9650 (5 DMA), an upside break can trigger rise towards 0.9730 (30 DMA).On the downside, immediate support is seen at 0.9545 (March 2nd low ), a break below could take the pair towards 0.9500 (Psychological level).
USD/JPY: The dollar declined against the Japanese yen on Tuesday as hopes of a coordinated global approach to tackle the economic fallout from the coronavirus outbreak gave way to uncertainties over the details of any such action. The statement, expected on Tuesday or Wednesday, will see G7 nations pledge to work together to mitigate the damage. At (GMT 13:00), the yen was last up 0.51% at 107.72.Strong resistance can be seen at 108.76 (5 DMA), an upside break can trigger rise towards 109.96 (11 DMA).On the downside, immediate support is seen at 107.31 (Lower BB), a break below could take the pair towards 107.00 (Psychological level).
Equities Recap
European shares jumped on Tuesday as investors bet on more moves by major central banks and governments to counter the economic blow from the coronavirus outbreak, helping major stock markets recover from a hammering in the past week.
At (GMT 13:04 ),UK's benchmark FTSE 100 was last trading higherat 1.54 percent, Germany's Dax was up by 1.79 percent, France’s CAC was last up by 1.29 percent.
Commodities Recap
Gold prices rose on Tuesday supported by hopes that major central banks will cut interest rates as top policymakers from the Group of Seven countries unite to deal with the coronavirus and it’s economic impact.
Spot gold was 0.5% higher at $1,599.01 per ounce by 1045 GMT, having gained more than 1% in the previous session. U.S. gold futures firmed 0.3% to $1,600.10.
Oil prices extended gains on Tuesday on expectations that central banks are likely to enact financial stimulus to offset the impacts of the coronavirus outbreak and growing optimism that OPEC will order deeper output cuts this week.
Brent crude rose $1.40 per barrel, or 2.7%, to $53.30 per barrel by 0940 GMT. U.S. West Texas Intermediate (WTI) rose $1.48 cents, or 3.2%, to $48.23 a barrel.
Treasuries Recap
Euro zone government bond yields rose on Tuesday after the European Central Bank joined its U.S. and Japanese peers in indicating that it stands ready to protect the economy from the coronavirus outbreak.
Ten-year German government bond yields were last up 4 basis points to -0.58%, off six-month lows of -0.67% hit on Monday.
Italian and Greek government bonds - which bore the brunt of last week’s sell-off - rallied strongly. Italy’s 10-year yield fell 10 basis points to 1.05%, off five-week highs at 1.23% hit during the previous session.
