Posted at 01 March 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index gained as better-than-expected U.S. economic growth in the fourth quarter lifted yields on benchmark 10-year Treasury notes. The greenback against a basket of currencies traded 0.05 percent up at 96.25, having touched a low of 95.82 on Thursday, its lowest since February 5. FxWirePro's Hourly Dollar Strength Index stood at 33.85 (Neutral) by 1000 GMT.
EUR/USD: The euro gained after data showed German jobless total fell far more than expected in February, while the unemployment rate remained at a record low. Moreover, separate data showing Eurozone inflation edged higher in February boosted the bid tone around the major. The European currency traded 0.05 percent up at 1.1374, having touched a high of 1.1419 on Thursday, its highest since Feb. 5. FxWirePro's Hourly Euro Strength Index stood at -29.48 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1417 (Jan. 25 High), a break above targets 1.1443 (Jan. 28 High). On the downside, support is seen at 1.1343 (10-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar surged to a 2-1/2 month peak against the Japanese yen, as the U.S. Treasury yields rose after data showed U.S. gross domestic product surpassed expectations in the fourth quarter. However, concerns over U.S.-China trade talks following U.S. President Donald Trump warning undermined investor risk sentiment. The major was trading 0.4 percent up at 111.86, having hit a high of 111.93, its highest since December 20. FxWirePro's Hourly Yen Strength Index stood at -103.21 (Highly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditures, manufacturing PMI's from both Markit and ISM, and Fed Bostic's speech. Immediate resistance is located at 112.00, a break above targets 112.60 (Dec. 20 High). On the downside, support is seen at 110.66 (Feb.28 Low), a break below could take it lower at 110.25 (Feb.15 Low).
GBP/USD: Sterling eased, extending previous session losses, after former Brexit Secretary Dominic Raab stated that Prime Minister Theresa May's Brexit deal with the European Union needs to change, particularly on the issue of the Northern Irish backstop. The major traded 0.1 percent down at 1.3245, having hit a high of 1.3350 on Wednesday; it’s highest since July 9. FxWirePro's Hourly Sterling Strength Index stood at 44.29 (Neutral) 1000 GMT. Immediate resistance is located at 1.3362 (July 9 High), a break above could take it near 1.3424 (June 12 High). On the downside, support is seen at 1.3200, a break below targets 1.3138 (Oct. 16 Low). Against the euro, the pound was trading 0.2 percent down at 85.87 pence, having hit a high of 85.28 on Wednesday, it’s highest since May 2017
USD/CHF: The Swiss franc eased after rising to a near 4-week peak in the previous session, as the greenback surged after the benchmark 10-year U.S. Treasury yield rose to its highest since Feb. 6. The major trades 0.1 percent up at 0.9988, having touched a low of 0.9926 the day before; it’s lowest since February 1. FxWirePro's Hourly Swiss Franc Strength Index stood at 20.80 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0024 (February 22 High) and any break above will take the pair to next level till 1.0054 (February 18 High). The near-term support is around 0.9921 (January 25 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares rallied to a 5-month peak in early deals, boosted by robust corporate updates, while sterling eased on Brexit concerns.
The pan-European STOXX 600 index advanced 0.6 percent at 374.99 points, while the FTSEurofirst 300 index rallied 0.5 percent to 1,472.32 points.
Britain's FTSE 100 trades 0.7 percent up at 7,113.38 points, while mid-cap FTSE 250 surged 0.7 to 19,328.75 points.
Germany's DAX rose 1.1 percent at 11,638.89 points; France's CAC 40 trades 0.8 percent higher at 5,279.80 points
Commodities Recap
Crude oil prices declined, weighed down by surging U.S. supply and concerns of global economic slowdown, however output cuts by producer club OPEC limited downside. International benchmark Brent crude was trading 0.3 percent down at $66.15 per barrel by 1019 GMT, having hit a low of $64.29 on Tuesday, its lowest since February 14. U.S. West Texas Intermediate was trading 0.1 percent higher at $57.29 a barrel, after falling as low as $55.00 on Tuesday, its lowest since the February 15.
Gold prices slumped to a 2-week low as the dollar recouped losses on stronger-than-expected U.S. economic data. Spot gold was trading 0.3 percent down at $1,309.81 per ounce at 1022 GMT, having touched a low of $1,306.07 per ounce earlier, its lowest level since Feb. 14. U.S. gold futures were down 0.2 percent at $1,313.10 per ounce.
Treasuries Recap
The U.S. Treasuries slumped during late European session Friday ahead of personal income and spending report due for December, including the core PCE deflator, scheduled to be released 13:30GMT today. Also, the country’s ISM manufacturing PMI for the month of February, due for release later today, will add further direction to the debt market. The yield on the benchmark 10-year Treasury yield jumped 2 basis points to 2.730 percent, the super-long 30-year bond yields traded nearly 1-1/2 basis points higher at 3.097 percent and the yield on the short-term 2-year edged 1 basis point higher to 2.522 percent.
The United Kingdom’s gilts modestly rose during Friday’s afternoon session, after the country’s manufacturing PMI for the month of February fell shy of previous reading, albeit in line with market expectations. The yield on the benchmark 10-year gilts, slipped to 1.303 percent, the super-long 30-year bond yields remained nearly 1 basis point lower at 1.813 percent and the yield on the short-term 2-year edged 1 basis point down at 0.820 percent
The German bunds remained tad lower during European session Friday following the improvement in the country’s unemployment statistics for the month of February, coupled with a rise in eurozone’s consumer price inflation (CPI) for the similar month. The German 10-year bond yields, which move inversely to its price, remained tad higher at 0.190 percent, the yield on the 30-year note rose nearly 1 basis point to 0.817 percent and the yield on short-term 2-year hovered around -0.538 percent.
The Japanese 10-year government bond yield hit a 2-week high on the last trading day of the week after the Bank of Japan (BoJ) said that it would adopt a reduction in the frequency of debt-buying operations in March. Further, JGBs tracked an overnight slide in the United States Treasuries amid a rally in the Tokyo equities market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose nearly 1-1/2 basis points to -0.013 percent, the yield on the long-term 30-year also surged 1-1/2 basis points to 0.619 percent while the yield on short-term 2-year hovered around -0.145 percent.
The Australian government bond slumped during Asian trading session Friday tracking a similar movement in the United States’ counterpart as stronger-than-expected U.S. Q4 GDP growth boosted investors risk-taking appetite. Although real GDP growth slowed in the fourth quarter, the stronger-than-expected outturn should alleviate some concerns that the economy is in serious trouble. The U.S. GDP rose by an annualised 2.6 percent in Q4 versus consensus expectations of a 2.2 percent increase and following an increase of 3.4 percent in Q3. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4-1/5 basis points to 2.15 percent, the yield on the long-term 30-year bond jumped 3 basis points to trade at 2.71 percent and the yield on short-term 2-year climbed 2-1/2 basis points to 1.74 percent.