News

Europe Roundup: Sterling rebounds as recovery in risk appetite hits dollar, European shares dip,Gold retreats from seven-year high, Oil steadies above $56-February 25th,2020

Market Roundup

• German GDP (YoY) (Q4) 0.3%,0.3% forecast, 1.0% previous

• German GDP (QoQ) (Q4) 0.0%,0.1% forecast, 0.1% previous

• UK Feb CBI Distributive Trades Survey  1, 4 forecast, 0 previous

• French Feb Business Survey  102, 99 forecast, 102 previous
            
Looking Ahead – Economic Data (GMT)    

• 13:30 Canada Corporate Profits (QoQ) 0.4% previous    

• 13:55 US Redbook (YoY) 5.7% previous

• 13:55 US Redbook (MoM) -0.2% previous
    
• 14:00 US Dec House Price Index (YoY)  4.9% previous

• 14:00 US Dec House Price Index (MoM) 0.3%,0.2% previous

• 14:00 US Dec House Price Index  281.2    previous

• 15:00 US Feb CB Consumer Confidence 132.0 forecast, 131.6  previous

• 15:00 US Feb Richmond Manufacturing Index  13 forecast, 20 previous

• 15:00 US Feb Richmond Manufacturing Shipments  29 previous

• 15:00 US Feb Richmond Services Index      10 previous    

• 15:00 US Feb Dallas Fed Services Revenues  18.8 previous  
 
Looking Ahead – Economic events and other releases (GMT)

• 17:15 Canada BoC Gov Council Member Lane Speech    

• 20:00 US FOMC Member Clarida Speech  
 
Fx Beat

EUR/USD: The euro declined against dollar on Tuesday, as the spread of the coronavirus outbreak in Italy and downbeat German GDP data weighed on euro. Data on Tuesday showed declining exports held back German economic activity in the fourth quarter of last year . The Federal Statistics Office said exports fell by 0.2% in the fourth quarter from the third, which meant that net trade took off 0.6 percentage points from gross domestic product growth The euro was last trading down 0.17% at $1.0835. Immediate resistance can be seen at 1.0875 (5 DMA), an upside break can trigger rise towards 1.0915  (21 DMA).On the downside, immediate support is seen at 1.0824 (9 DMA), a break below could take the pair towards 1.0800 (Psychological level).

GBP/USD: Sterling rebounded against greenback on Tuesday as markets worrying about the spread of coronavirus found some stability, encouraging investors to pare back their rush into dollars that had sent the British currency lower. The pound has been supported this month thanks to signs of a rebound in the UK economy and on expectations a new finance minister will raise public spending at next month’s budget. By 1241 GMT on Tuesday, the pound had rallied back towards $1.30, and was last up 0.4% at $1.2953. Immediate resistance can be seen at 1.2997 (21 DMA), an upside break can trigger rise towards 1.3033 (50 DMA).On the downside, immediate support is seen at 1.2856 (lower BB), a break below could take the pair towards 1.2800 (Psychological level).

USD/CHF: The dollar was little changed against Swiss franc on Tuesday as fears the coronavirus was rapidly mutating into a pandemic that could cripple global supply chains kept investors on side-lines. Fears of a pandemic rose after Italy, South Korea and Iran reported a sharp rise in the number of new infections and deaths, while other Middle Eastern countries also reported new cases. At (GMT 13:07), Greenback gained 0.01% versus the Swiss franc to 0.9789. Immediate resistance can be seen at 0.9807 (9 DMA), an upside break can trigger rise towards 0.9832 (200 DMA).On the downside, immediate support is seen at 0.9759 (21 DMA), a break below could take the pair towards 0.9700 (Psychological level).

USD/JPY: The dollar dipped against the Japanese yen on Tuesday, as risk-off move spurred by the rise in coronavirus cases increased demand for yen. The yen traded well within last week’s range, and currency market moves were muted compared with those in U.S. stocks and Treasuries. The safe-haven yen   was last up 0.03% at 110.65 per dollar, having strengthened to 110.34 earlier in the day. Strong resistance can be seen at 111.23 (5 DMA), an upside break can trigger rise towards 111.78 (Higher BB ).On the downside, immediate support is seen at 110.48 (11 DMA), a break below could take the pair towards 110.00  (Psychological level). 

Equities Recap

European shares dipped on Tuesday as coronavirus cases outside of China drove investors to the perceived safety of gold and government bonds on fears of the impact on the global economy.

At (GMT 12:38),UK's benchmark FTSE 100 was last trading lower at 0.44 percent, Germany's Dax was down by 0.18 percent, France’s CAC was last down by 0.20 percent.

Commodities Recap

Gold prices fell on Tuesday as investors booked profits from a jump to a seven-year high in the previous session and as equities regained some footing, but a spike in coronavirus cases outside of China capped bullion’s losses.    

Spot gold was down 0.7% at $1,648.36 per ounce as of 0605 GMT. On Monday, the metal rose as much as 2.8% to $1,688.66, its highest since January 2013.U.S. gold futures fell 1.6% to $1,650.60.

Oil steadied above $56 a barrel on Tuesday after two days of declines as OPEC output cuts and Libyan supply losses balanced concerns about the spread of the coronavirus and its impact on oil demand. 

Brent crude  rose 5 cents to $56.35 a barrel by 0952 GMT. U.S. West Texas Intermediate crude   was down 14 cents at $51.29.  
         
Treasuries Recap

U.S.: The U.S. Treasuries jumped during Tuesday’s afternoon session ahead of the country’s Consumer Board consumer confidence for the month of February, scheduled to be released today by 15:00GMT, besides, the 2-year auction, also due to be held today by 18:00GMT. Also, speeches by FOMC members, Kaplan and Clarida, awaiting to be delivered later today, shall add further direction to the debt market. The yield on the benchmark 10-year Treasury yield lost 2 basis points to 1.357 percent, the super-long 30-year bond yield fell nearly 1-1/2 basis points to trade at 1.824 percent and the yield on the short-term 2-year suffered 2 basis points at 1.245 percent.

EUR: The German bunds rallied during afternoon session of the second trading day of the week Tuesday after the country’s gross domestic product (GDP) for the fourth quarter of 2019, released today, disappointed market investors, with eyes still on the European Central Bank’s (ECB) Governor Christine Lagarde’s speech, due to be delivered on February 26 by 13:30GMT. The German 10-year bond yield, which moves inversely to its price, slumped 3 basis points to -0.512 percent, the long-term 30-year yield plunged 3-1/2 basis points to -0.033 percent and the yield on short-term 2-year suffered 2-1/2 basis points to trade at -0.700 percent.

AUS: Australian bonds remained tad higher on Tuesday, tracking a similar movement in the United States’ Treasuries amid a silent trading session that witnessed data of little economic significance. However, the S&P500 index declined in the overnight session as concerns over the spread of the deadly coronavirus threatened market sentiments. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, declined nearly 1 basis point to 0.919 percent, the yield on the long-term 30-year bond remained tad 1/2 basis point down at 1.506 percent and the yield on short-term 2-year too dipped 1/2 basis point to 0.655 percent.
 


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