News

Europe Roundup: Sterling falls 0.5% versus dollar as Treasury yields climb, European shares retreat, Gold dips 1%, Oil steady near $70 on hopes of recovering demand-12th March,2021

Market Roundup

•UK Jan Manufacturing Production (MoM) -2.3%,-0.8% forecast, 0.3% previous

•UK Jan Manufacturing Production (YoY) -5.2%,-3.6% forecast, -2.5% previous

•UK Jan Industrial Production (YoY) -4.9%,-4.0% forecast, -3.3% previous

•German Feb CPI (MoM) 0.7%,0.7% forecast, 0.8% previous

•German Feb HICP (MoM) 0.6%,0.6% forecast, 1.4% previous

•German Feb CPI (YoY) 1.3%, 1.3% forecast, 1.0% previous

•UK Jan Construction Output (MoM) 0.9%,-1.0% forecast, -2.9% previous

•U.K Jan Construction Output (YoY) -3.0%,-4.8% forecast, -3.9% previous

•U.K Jan Trade Balance -9.83B, -12.50B forecast, -14.32B previous

•U.K Jan Trade Balance Non-EU -1.76B, -4.95B forecast, -5.20B previous

•U.K Jan Industrial Production (MoM) -1.5%,-0.6% forecast, 0.2% previous

•U.K GDP (YoY) -9.2%,-7.8% forecast, -8.6% previous

•U.K GDP (MoM) -2.9%,-4.9% forecast, 1.2% previous

•U.K Monthly GDP 3M/3M Change-1.7%,-2.5% forecast, 1.0% previous

•EU Jan Industrial Production (MoM) 0.8%,0.2% forecast, -1.6% previous

•EU Jan Industrial Production (YoY) 0.1%,-2.4% forecast, -0.8% previous

Looking Ahead Economic Data (GMT)

•13:00 Russia Jan Trade Balance 12.10B forecast, 10.56B previous

•13:30 Canada Feb Part Time Employment Change -225.4K previous

•13:30 Canada Feb Part Employment Change 75.0K forecast, -212.8K previous

•13:30 Canada Feb Capacity Utilization Rate (Q4) 78.0% forecast ,76.5% previous

•13:30 Canada Feb Unemployment Rate 9.2% forecast , 9.4% previous

•13:30 Canada Jan Wholesale Sales (MoM) 5.0% forecast , -1.3% previous

•13:30 US Feb PPI (MoM) 0.5% forecast , 1.3% previous

•13:30 US Feb Core PPI (YoY) 2.6% forecast , 2.0% previous

•13:30 US Feb PPI (YoY) 2.7% forecast , 1.7% previous

•15:00 US March Michigan Inflation Expectations 3.3% previous

•15:00 US March Michigan Consumer Sentiment 78.5 forecast , 76.8 previous

•15:00 US March Michigan Consumer Expectations 74.0 forecast , 70.7 previous

•19:00 US Federal Budget-430.0B previous

Looking Ahead – Events, Other Releases (GMT)

• No events ahead

Fxbeat

EUR/USD: The euro declined against dollar on Friday after the European Central Bank, as widely expected, said on Thursday it would accelerate its emergency bond purchases over the next quarter. Concerned that a rise in bond yields could derail a recovery across the 19 countries that share the euro, the ECB said it would use its 1.85 trillion Pandemic Emergency Purchase Programme (PEPP) more generously over the coming months to stop any unwarranted rise in debt financing costs. Euro was down around 0.5% at $1.1916 at 1230 GMT, it was still set to end the week up 0.2% overall. Immediate resistance can be seen at 1.1992 (50%fib), an upside break can trigger rise towards 1.2000 (Psychological level).On the downside, immediate support is seen at 1.1904 (38.2%fib), a break below could take the pair towards 1.1835 (March 9th low).

GBP/USD: The British pound fell against a stronger dollar on Friday as Treasury yields climbed, but the pound was still on track for weekly gains amid hopes for an economic recovery following Britain’s speedy vaccination programme. Sterling was down 0.5% against a stronger dollar at $1.3929 as U.S. Treasuries sold off during early London trading, pushing the yield on the benchmark note above 1.60%. On the data front, Britain’s economy shrank 2.9% in January from December, a less severe decline than expected, as the country went back into a coronavirus lockdown. Immediate resistance can be seen at 1.4032( 23.6%fib), an upside break can trigger rise towards 1.4180 (Feb 25th high).On the downside, immediate support is seen at 1.3879(38.2%fib), a break below could take the pair towards 1.3786 (50%fib).

USD/CHF: The dollar rose against the Swiss franc on Friday, recovering its losses from the day before, as a spike in Treasury yields early in the European session triggered a risk-off move in global currency markets. Market participants have grown wary in recent weeks that there could be a spike in inflation caused by massive fiscal stimulus and pent-up consumer demand when economies reopen from their coronavirus lockdowns. Although soft U.S. CPI data on Wednesday went some way to calm those fears, U.S. Treasuries sold off again on Friday, with the 10-year yield rising above 1.6%. Immediate resistance can be seen at 0.9317 (23.6%fib), an upside break can trigger rise towards 0.9372 (March 9th high).On the downside, immediate support is seen at 0.9259 (38.2% fib), a break below could take the pair towards 0.9214(50%fib).

USD/JPY: The dollar strengthened against the Japanese yen on Friday as greenback drew support from calmer market sentiment. Investors feared the higher Treasury yields and a faster economic recovery in the United States could lead the Federal Reserve to cut short its quantitative easing program. But indications from the Federal Reserve that it would tolerate the bond spike, and slower price-growth, have calmed those fears.Dollar-yen was up around 0.6%, changing hands at 108.95 at 12:00 GMT. That’s close to the peak of 109.23 reached on Tuesday, which had been the yen’s weakest since June 2020. Strong resistance can be seen at 109.05 (38.2% fib), an upside break can trigger rise towards 109.70 (23.6%fib).On the downside, immediate support is seen at 108.48 (50%fib), a break below could take the pair towards 107.95 (61.8%fib).

Equities Recap

Rising bond yields dragged European stocks lower on Friday, although major bourses were set for weekly gains as stimulus and vaccination programmes spurred hopes of a solid economic recovery.

At (GMT 12:30),UK’s benchmark FTSE 100 was last trading down at 0.02 percent, Germany’s Dax was down by 0.58 percent, France’s CAC was last down by 0.12 percent.

Commodities Recap

Gold fell more than 1% on Friday after a rebound in U.S. Treasury yields and the dollar index sent the metal back towards 9-month lows hit earlier in the week, clouding optimism the U.S. stimulus bill would send prices up.

Spot gold fell 1.1% to $1,703.01 per ounce by 1142 GMT. The metal had slumped to a nine-month low of $1,676.10 on Monday. U.S. gold futures fell 1.3% to $1,699.60.

Oil hovered near $70 a barrel on Friday, supported by production cuts by major oil producers and optimism about a demand recovery in the second half of the year.

Benchmark Brent rose 3 cents, or 0.04%, to $69.66 a barrel by 1058 GMT while U.S. West Texas Intermediate crude was at $66.03 a barrel, up 1 cent, or 0.02%. Both recovered from losses earlier in the session during Asian trade.


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