News

Europe Roundup: Sterling steadies as UK trade balance deficit narrows, dollar index rallies ahead of U.S. nonfarm payroll report, European shares slump – Friday, March 9th, 2018

Market Roundup

  • United Kingdom Jan manufacturing output yy increase to 2.7 % (forecast 2.8 %) vs previous 1.4 %
     
  • United Kingdom Jan industrial output mm increase to 1.3 % (forecast 1.5 %) vs previous -1.3 %
     
  • United Kingdom Jan goods trade balance gbp decrease to -12.32 bln gb (forecast -12 bln gb) vs previous -11.771 bln gb (revised from -13.58 bln gb)
     
  • United Kingdom Jan goods trade bal. Non-eu increase to -3.87 bln gb (forecast -4.4 bln gb) vs previous -3.891 bln gb (revised from -5.18 bln gb)
     
  • United Kingdom Jan industrial output yy increase to 1.6 % (forecast 1.8 %)
     
  • United Kingdom Jan construction o/p vol yy decrease to -3.9 % (forecast -0.5 %) vs previous -0.2 %
     
  • United Kingdom Jan construction o/p vol mm decrease to -3.4 % (forecast -0.3 %) vs previous 1.6 %
     
  • United Kingdom Jan manufacturing output mm decrease to 0.1 % (forecast 0.2 %) vs previous 0.3 %
     
  • Italy Jan producer prices yy decrease to 1.7 % vs previous 2 %
     
  • Italy Jan producer prices mm increase to 0.7 %

Economic Data Ahead

  • (0800 ET/1300 GMT) The National Institute of Economic and Social Research (NIESR) will report Britain's GDP estimate in the three months through February. The indicator rose 0.5 percent in the previous month.
     
  • (0830 ET/1330 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of February. The report is likely to show 200,000 jobs were added compared with a similar gain in January.
     
  • (0830 ET/1330 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of February. The rate stood at 62.5 percent in the previous month.
     
  • (0830 ET/1330 GMT) The U.S. Labor Department is expected to report that unemployment rate fell to 4.0 percent in February from 4.1 percent in January.
     
  • (0830 ET/1330 GMT) The United States' average hourly earnings are likely to rise 0.2 percent in February after climbing 0.3 percent in the month before.
     
  • (0830 ET/1330 GMT) Canada's releases industrial capacity utilization data for the fourth quarter. The indicator stood at 85.2 percent in the previous quarter.
     
  • (0830 ET/1330 GMT) The Statistics Canada releases employment report for February. The economy is likely to have added 20,000 jobs, after losing 88,000 jobs in January, while the participation rate stood at 65.5 percent in the same month.
     
  • (0830 ET/1330 GMT) Canada's unemployment rate is expected to remain unchanged at 5.9 percent in February.
     
  • (1000 ET/1500 GMT) The U.S. Census Bureau is likely to report that wholesale inventories rose 0.7 percent in January after posting a gain of 1.2 percent in the prior month.
     
  • (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count. 
     
  • (0840 ET/1340 GMT) Federal Reserve Bank of Chicago President Charles Evans discusses the economy in a live interview on CNBC's “Squawk Box,” in New York.
     
  • (1045 ET/1545 GMT) Federal Reserve Bank of Chicago President Charles Evans will participate in an interview on the economy during “Bloomberg Markets,” in New York.
     
  • (1240 ET/1740 GMT) Federal Reserve Bank of Boston President Eric Rosengren speaks before the “Outlook 2018” luncheon hosted by the Springfield Regional Chamber, in Springfield.
     
  • (1245 ET/1745 GMT) Federal Reserve Bank of Chicago President Charles Evan's speaks on current economic conditions and monetary policy before the Manhattan Institute Shadow Open Market Committee, in New York.
     

FX Beat

DXY: The dollar index rallied to an over 1-week peak after U.S. President Donald Trump showed willingness to accept an invitation to meet North Korean leader Kim Jong Un by May. The greenback against a basket of currencies traded 0.1 percent up at 90.25, having touched a low of 89.41 on Wednesday, its lowest since Feb. 20. FxWirePro's Hourly Dollar Strength Index stood at 38.69 (Neutral) by 1000 GMT.

EUR/USD: The euro declined after European Central Bank President Mario Draghi expressed his view on subdued inflation and rising protectionism at his news conference after a central bank policy meeting. The European currency traded 0.1 percent down at 1.2301, having touched a high of 1.2445 on Wednesday, its highest since Feb. 16. FxWirePro's Hourly Euro Strength Index stood at -47.05 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2364, a break above targets 1.2465 (Feb 14 High). On the downside, support is seen at 1.2269, a break below could drag it lower 1.2221.

USD/JPY: The dollar rallied to an 8-day peak after U.S. President Donald Trump said on Thursday that he was prepared to meet North Korean leader Kim Jong Un for the first U.S.-North Korea summit, marking a potential breakthrough in nuclear tensions with Pyongyang. The major was trading 0.5 percent up at 106.71, having hit a high of 106.94 earlier, its highest since Mar. 1. FxWirePro's Hourly Yen Strength Index stood at -97.61 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. nonfarm payroll report, unemployment rate, wholesale inventories and Fed officials' speeches. Immediate resistance is located at 107.20 (Mar 1), a break above targets 107.67 (Feb. 27). On the downside, support is seen at 105.85, a break below could take it lower 105.25.

GBP/USD: Sterling rose above the 1.3800 handle after the economy's total trade deficit for the fourth quarter was revised down to 7.8 billion pounds from 10.8 billion pounds, mostly due to higher than previously reported exports of services. The major traded 0.1 percent up at 1.3816, having hit a high of 1.3929 on Tuesday, it’s highest since Feb 27. FxWirePro's Hourly Sterling Strength Index stood at -15.70 (Neutral) by 1000 GMT. Immediate resistance is located at 1.3861 (10-DMA), a break above could take it near 1.3907 (21-DMA). On the downside, support is seen at 1.3766 (Mar. 5 Low), a break below targets 1.3711 (Mar. 1 Low). Against the euro, the pound was trading 0.1 percent down at 89.05 pence, having hit a low of 89.67 pence on Wednesday, it’s lowest since Nov. 28, 2017.

USD/CHF: The Swiss franc declined to a 1-1/2 month low as easing geopolitical tensions between the U.S. and North Korea boosted market sentiment. The major trades 0.1 percent down at 0.9502, having touched a high of 0.9534 earlier, it’s highest since Jan. 24. FxWirePro's Hourly Swiss Franc Strength Index stood at -55.49 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9550 and any break above will take the pair to next level till 0.9581. The near-term support is around 0.9425 (5-DMA) and any close below that level will drag it till 0.9369 (21-DMA).

Equities Recap

European shares declined as investors turned cautious after the announcement of U.S. tariffs, while the greenback steadied against a basket of currencies ahead of the U.S. jobs report.

The pan-European STOXX 600 index eased 0.1 percent to 376.55 points, while the FTSEurofirst 300 index fell 0.1 percent to 1,472.66 points.

Britain's FTSE 100 trades 0.1 percent lower at 7,198.21 points, while mid-cap FTSE 250 rose 0.2 percent to 20,014.72 points.

Germany's DAX declined 0.4 percent at 12,304.29 points; France's CAC 40 trades 0.1 percent down at 5,249.73 points.

Commodities Recap

Crude oil prices steadied as Asian stock markets gained on news that North Korean leader Kim Jong Un will meet with U.S. President Donald Trump. International benchmark Brent crude was trading 0.1 percent up at $63.91 per barrel by 1003 GMT, having hit a low of $63.41 on Thursday, its lowest since Mar. 2. U.S. West Texas Intermediate was trading 0.1 percent up at $60.30 a barrel, after falling as low as $59.94 the day before, its weakest since Feb. 15.

Gold prices extended losses into a third straight session as the greenback strengthened against the yen on hopes of easing tensions between the United States and North Korea and ahead of U.S. non-farm payroll data later in the day. Spot gold was down 0.2 percent at $1,319.09 per ounce as of 1009 GMT, having hit $1,316.77 an ounce earlier, its lowest since Mar. 2 and was on track to post its third weekly decline. U.S. gold futures for April delivery fell 0.2 percent to $1,319 per ounce.

Treasuries Recap

The U.S. Treasuries suffered ahead of the country’s non-farm payrolls data for the month of February and the country’s unemployment rate for the same period, scheduled to be released today by 13:30GMT. The yield on the benchmark 10-year Treasuries climbed 1-1/2 basis points to 2.88 percent, the super-long 30-year bond yields also rose nearly 1-1/2 basis points to 3.14 percent and the yield on the short-term 2-year too traded 1-1/2 basis points higher at 2.27 percent.

The UK gilts Friday as investors have largely shrugged-off the lower-than-expected manufacturing production for the month of January and the country’s trade balance for the same period. The yield on the benchmark 10-year gilts, jumped nearly 3 basis points to 1.50 percent, the super-long 30-year bond yields surged 2-1/2 basis points to 1.91 percent and the yield on the short-term 2-year too traded 2-1/2 basis points higher at 0.83 percent

The German bunds remained tad lower during early European session after the country’s trade balance for the month of January topped market expectations, while the industrial production missed consensus estimates, lending range-bound trading to the debt market. The German 10-year bond yields, which move inversely to its price, rose 1 basis point to 0.64 percent, the yield on 30-year note also edged 1 basis point higher to 1.28 percent and the yield on short-term 2-year hovered around -0.55 percent.

The New Zealand government bonds closed flat after dairy prices slipped further in the latest GlobalDairyTrade (GDT) price auction, held overnight as an influx of supply from the country curbed buying. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 3.04 percent, the yield on 20-year flattened at 3.56 percent and the yield on short-term 2-year closed 1 basis point higher at 1.97 percent.

The Japanese government bonds traded tad lower as investors wait to see a slight upward push in the country’s fourth-quarter gross domestic product (GDP), scheduled to be released later today. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note flattened at 0.75 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.15 percent.

The Australian short-term government bonds slumped as investors cashed in profits on the last trading day of the week. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 2.808 percent, the yield on the long-term 30-year note dipped 1/2 basis point to 3.386 percent and the yield on short-term 2-year up 2-1/2 basis points to 2.031 percent.


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