Posted at 19 February 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index gained after the White House said a new round of talks between the United States and China to resolve their trade war will take place in Washington today, with follow-up sessions at a higher level later in the week. The greenback against a basket of currencies trades 0.1 percent up at 96.92, having touched a high of 97.37 on Friday, its highest since December 17. FxWirePro's Hourly Dollar Strength Index stood at 9.66 (Neutral) by 1000 GMT.
EUR/USD: The euro steadied above the 1.3000 handle on news that Italy started discussions with the European Union over the renewal of a state guarantee scheme designed to help banks shed bad loans. The European currency traded 0.05 percent up at 1.1312, having touched a low of 1.1234 on Friday, its lowest since Nov. 13. FxWirePro's Hourly Euro Strength Index stood at -28.40 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1341 (Feb. 13 High), a break above targets 1.1368 (Feb.7 High). On the downside, support is seen at 1.1216 (Nov. 13 Low), a break below could drag it till 1.1180.
USD/JPY: The dollar surged against the Japanese yen after Bank of Japan Governor Haruhiko Kuroda told the Japanese parliament the central bank was ready to ramp up stimulus if a rising yen dented the economy. Moreover, growing expectations for an easing in the U.S.-China trade conflict supported investor risk sentiment. The major was trading 0.2 percent up at 110.80, having hit a high of 111.12 on Thursday, its highest since December 27. FxWirePro's Hourly Yen Strength Index stood at -32.19 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. housing market index. Immediate resistance is located at 111.05 (Feb. 13 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 110.28 (10-DMA), a break below could take it lower at 109.60 (Feb. 7 Low).
GBP/USD: Sterling rose, extending gains for the third straight session after data showed British workers' pay growth held at its fastest pace in a decade in late 2018 and job creation remained robust, indicating the labour market was staying strong ahead of Brexit. The major traded 0.1 percent up at 1.2928, having hit a low of 1.2772 on Thursday; it’s lowest since January 15. FxWirePro's Hourly Sterling Strength Index stood at 117.04 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.2958 (Feb. 18 High), a break above could take it near 1.2996 (February 7 High). On the downside, support is seen at 1.2845 (Feb 11 Low), a break below targets 1.2766 (Nov 22 Low). Against the euro, the pound was trading flat at 87.47 pence, having hit a high of 87.42 on Monday, it’s highest since Feb. 8.
USD/CHF: The Swiss franc eased, retreating from a 1-week peak as optimism about U.S.-China trade talks boosted investor morale. The major trades 0.05 percent up at 1.0042, having touched a low of 1.0024 on Monday; it’s lowest since February 11. FxWirePro's Hourly Swiss Franc Strength Index stood at 80.41 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 1.0111 (November 12 High) and any break above will take the pair to next level till 1.0150. The near-term support is around 0.9961 (January 22 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares tumbled, weighed down by losses in the banking sector, while sterling gained on better-than-expected labor market report.
The pan-European STOXX 600 index gained 0.4 percent at 368.40 points, while the FTSEurofirst 300 index eased 0.4 percent to 1,448.88 points.
Britain's FTSE 100 trades 0.5 percent down at 7,183.90 points, while mid-cap FTSE 250 declined 0.3 to 19,073.72 points.
Germany's DAX fell 0.1 percent at 11,290.12 points; France's CAC 40 trades 0.4 percent lower at 5,150.31 points
Commodities Recap
Crude oil prices eased, hovering away from its 2019 highs, amid concerns over slowing economic growth that would curb demand, however, OPEC-led supply cuts limited downside. International benchmark Brent crude was trading 0.5 percent down at $66.07 per barrel by 1028 GMT, having hit a high of $66.81 on Monday, its highest since November 20. U.S. West Texas Intermediate was trading 0.3 percent lower at $55.88 a barrel, after rising as high as $56.32 on Monday, its highest since the November 20.
Gold prices rallied to a near 10-month high as optimism around U.S.-China trade discussions dimmed the greenback's appeal. Spot gold was trading 0.3 percent up at $1,329.09 per ounce by 1036 GMT, having touched a high of $1,329.92, its highest level since April 25. U.S. gold futures rose 0.5 percent to $1,329 an ounce.
Treasuries Recap
The Italian government bond yields rose 5-6 basis points across the board, with the Italy's 10-year bond yield up 6 basis points at 1.74 percent, pushing the gap over German 10-year bond yields to 273 bps. German 10-year bond yields were down two bps points at 0.09 percent, heading back towards their lowest levels since October 2016.
The Japanese government bond prices traded slightly higher, with March 10-year JGB futures up 0.04 point at 152. The 20-year JGB yield was down 1 basis point at 0.405 percent, while the 30-year yield was down 1 basis point, at 0.580 percent.
The Australian government bond futures inched up in the wake of the minutes, with the three-year bond contract rising half a tick to 98.320. The 10-year contract also added half a tick to 97.8700.
The New Zealand government bonds slipped a touch with yields up as much as 2 basis points at the far end of the curve.