Posted at 29 March 2022 / Categories Market Roundups
Market Roundup
•U.S. 10-year bond yields near multi-year highs
•Russia-Ukraine peace talks due this week in Turkey
•Palladium slips to two-month low
• US Wholesale Inventories (MoM) 0.8% previous
• US Feb Goods Trade Balance -106.59B, -107.57B previous
•US Feb Retail Inventories Ex Auto 2.1%,1.8% previous
•French 3-Month BTF Auction-0.650%, -0.661% previous
•French 6-Month BTF Auction -0.616%,-0.667% previous
•French 12-Month BTF Auction -0.472%,-0.561% previous
•Dallas Mar Fed Mfg Business Index 8.7, 14.0 previous
•US 6-Month Bill Auction 1.050%,0.870% previous
•US 2-Year Note Auction 2.365%,1.553% previous
Looking Ahead - Economic Data (GMT)
• No data ahead
Looking Ahead - Economic events and other releases (GMT)
• 04:20 Japan BOJ Deputy Governor Amamiya Speaks
Currency Summaries
EUR/USD: The euro dipped on Monday as dollar strengthened on safe haven demand while, investor focused on potential Russia-Ukraine peace talks this week. The dollar has benefited from its status as a safe haven and the conflict in Ukraine has driven expectations the U.S. Federal Reserve will hike interest rates. The Ukraine conflict continues to heat up, with only modest expectations for progress on March 28-30 ceasefire negotiations. The euro has been an indicator of sentiment towards Ukraine, but it remains resilient despite assumptions that Europe's economy will suffer more than the rest of the world. Immediate resistance can be seen at 1.1008 (11DMA), an upside break can trigger rise towards 1.1054 (38.2%fib).On the downside, immediate support is seen at 1.0951(23.6%fib), a break below could take the pair towards 1.0865 (Lower BB).
GBP/USD: Sterling fell against the dollar on Monday, with investors focusing on the Bank of England’s next moves to tame inflation while avoiding recession risks. Recent policy updates from the BoE kept downward pressure on sterling as the BoE’s last monetary policy meeting signalled more caution over plans for further policy tightening Bank of England Governor Andrew Bailey will give a speech on Monday; Deputy Governor Ben Broadbent will speak on Wednesday. By 1121 GMT sterling was down 0.3% to $1.3138, not far from its lowest since November 2020 of $1.3 it hit on March 15. Immediate resistance can be seen at 1.3157(38.2%fib), an upside break can trigger rise towards 1.3171(50%fib).On the downside, immediate support is seen at 1.3075 (23.6%fib), a break below could take the pair towards 1.3000 (Psychological level).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday, pulling back from a two-month high, as oil prices tumbled and the greenback broadly climbed.The price of oil, one of Canada's major exports, fell as Shanghai entered a two-stage lockdown of 26 million people in anattempt to curb the spread of COVID-19.The loonie was down 0.4% at 1.2525 to the greenback, after trading in a range of 1.2474 to 1.2592.It follows nine straight days of gains for the currency, the longest winning streak since August 2016. .Immediate resistance can be seen at 1.2537 (38.2%fib), an upside break can trigger rise towards 1.2595(50%fib).On the downside, immediate support is seen at 1.2467 (23.6%fib), a break below could take the pair towards 1.2662(Lower BB).
USD/JPY: The dollar hit a six-year high versus the yen after the Bank of Japan moved to contain rising bond yields, while U.S. Treasury yields soared to new multi-year highs, highlighting a divergence between the BOJ and other major central banks. Treasury 10-year yields vaulted above 2.5% to three-year highs , with the U.S. Federal Reserve expected to deliver a half-point interest rate rise in May as it tackles rising inflation. Interest rate hike expectations helped lift the dollar to its highest in two weeks against a basket of six major peer currencies, last up 0.313% at 99.158. Strong resistance can be seen at 124.74 (38.2%fib), an upside break can trigger rise towards 124.90(23.6%fib).On the downside, immediate support is seen at 123.37(50%fib), a break below could take the pair towards 122.66(61.8%fib).
Equities Recap
European shares gained on Monday, led by interest rate-sensitive banks and insurers as government bond yields continued to rise, while hopes of a peace deal in the Ukraine crisis further aided sentiment.
UK's benchmark FTSE 100 closed down by 0.14 percent, Germany's Dax ended up by 0.78 percent, France’s CAC finished the day up by 0.54 percent.
The S&P 500 rose for a third day on Monday, as a sharp climb in shares of Tesla overshadowed weakness in energy and bank stocks, while Russia and Ukraine were poised to hold their first face-to-face peace talks in more than two weeks.
Dow Jones closed up by 0.27% percent, S&P 500 closed up by 0.71% percent, Nasdaq settled up by 1.31% percent.
Treasuries Recap
The U.S. Treasury yield curve, as measured by the gap between five and 30-year yields, inverted on Monday for the first time since early 2006, as a sell-off in the bond market resumed, with short-dated yields jumping to their highest since 2019.
The two-year Treasury yield climbed to 2.334%, from 2.299%, while 10-year U.S. Treasury yields retreated to 2.459%, after initially pushing above the 2.5%-marker for the first time since 2019 .
Commodities Recap
Gold retreated on Monday on pressure from higher U.S. Treasury yields and a firmer dollar, while easing supply concerns ahead of Russia-Ukraine peace talks sent autocatalyst palladium tumbling nearly 8%.
Spot gold fell 1.2% to $1,933.12 per ounce by 02:08 p.m. ET (1808 GMT), while U.S. gold futures settled down 0.7% at $1,939.80.
Oil prices tumbled about 7% on Monday after China's financial hub of Shanghai launched a lockdown to curb a surge in COVID-19 infections, prompting renewed fears of demand destruction.
Brent crude futures fell $8.17, or 6.8%, to settle at $112.48 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $7.94, or about 7%, to settle at $105.96 a barrel.