Posted at 02 March 2023 / Categories Market Roundups
Market Roundup
•U.S. labor market still strong; Q4 labor costs revised higher
•Fed's Bostic: raising rates 'slow and steady' appropriate action
•Price rises ease in euro zone in February
•Investors see ECB key rate at 4.1% at year-end
•US Continuing Jobless Claims 1,665K, 1,665K forecast,1,654K previous
•US Jobless Claims 4-Week Avg. 193.00K,191.25K previous
•US Initial Jobless Claims 190K, 195K forecast,192K previous
•US Nonfarm Productivity (QoQ) (Q4) 11.7%,2.6% forecast,1.4% previous
•US Unit Labor Costs (QoQ) (Q4) 3.2%,1.6% forecast,2.0% previous
•US Natural Gas Storage-81B,-75B forecast,-71B previous
•US 4-Week Bill Auction 4.655%,4.515% previous
•US 8-Week Bill Auction 4.590%, 4.660% previous
Looking Ahead Economic Data(GMT)
•00:30 Japan Feb Services PMI 53.6 forecast, 52.3 previous
•00:30 Australia Invest Housing Finance (MoM) -4.4% previous
•00:30 Australia Home Loans (MoM)-1.7% forecast,-5.7% previous
Looking Ahead Events And Other Releases(GMT)
•No significant events
Currency Summaries
EUR/USD: The euro fell against the dollar on Thursday after data showed inflation in the euro zone was not as high as investors had feared based on national readings in recent days.Euro zone inflation eased to 8.5% in February from 8.6% a month earlier on lower energy prices, but still came in above a predicted 8.2% in a poll of economists. The euro was 0.5% lower against the dollar at $1.0618.Investors now see the ECB's 2.5% deposit rate rising by a combined 100 basis points in March and May, then to around 4.1% at the turn of the year. Markets have priced in an extra 50 basis points of hikes in just the past month. Immediate resistance can be seen at 1.0681 (21DMA), an upside break can trigger rise towards 1.0786 (23.6%fib ).On the downside, immediate support is seen at 1.0574 (38.2%fib), a break below could take the pair towards 1.0537(Lower BB).
GBP/USD: The pound dipped on Thursday as the dollar rallied and speculation grew that the Bank of England may not hike interest rates any further. Bank of England Governor Andrew Bailey on Wednesday raised the prospect that the central bank might not need to raise interest rates again, after hiking them to 4% from just 0.1% in December 2021. Prime Minister Rishi Sunak’s deal with the European Union over Northern Ireland briefly boosted sterling, but it nonetheless dropped 2.4% in February, its worst month since September. Sterling traded at $1.194, down 0.76% on the day. Immediate resistance can be seen at 1.2054(21DMA), an upside break can trigger rise towards 1.2102(23.6%fib).On the downside, immediate support is seen at 1.1932(9DMA), a break below could take the pair towards 1.1883 (Lower BB).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Thursday, with the currency holding near its weakest level since early January as economic data fueled worries that central banks will raise interest rates further. The price of oil, one of Canada’s major exports, settled 0.6% higher at $78.16 a barrel on signs of a strong economic rebound in top crude importer China, while Wall Street clawed back some recent losses. The loonie was trading nearly unchanged at 1.36 to the greenback, or 73.53 U.S. cents, after moving in a range of 1.3583 to 1.3641. Last Friday, the currency touched its weakest since Jan. 4 at 1.3665. Immediate resistance can be seen at 1.3661 (23.6%fib), an upside break can trigger rise towards 1.3684 (Higher BB).On the downside, immediate support is seen at 1.3583 (50%fib), a break below could take the pair towards 1.3535 (14 DMA).
USD/JPY: The dollar strengthened against yen on Thursday as investors digested strong economic data and signals of a measured interest rate approach from the Federal Reserve. U.S. jobless claims numbers fell while Atlanta Fed President Raphael Bostic said that he favoured slow and steady quarter-point U.S. rate increases to limit risk to the economy. The number of Americans filing new claims for unemployment fell again last week, pointing to a still strong jobs market. Another Labor Department report showed labor costs grew much faster than previously estimated in the fourth quarter. The dollar strengthened 0.44% against the Japanese yen at 136.66. Strong resistance can be seen at 137.00(Psychological level), an upside break can trigger rise towards 138.16(23.6%fib).On the downside, immediate support is seen at 135.96 (38.2%fib), a break below could take the pair towards 135.59 (9DMA).
Equities Recap
European shares rose on Thursday boosted by consumer staples and energy stocks, but data suggesting euro zone inflation remained stubbornly high bolstered fears of more European Central Bank rate rises.
UK's benchmark FTSE 100 closed up by 0.36 percent, Germany's Dax ended up by 0.15 percent, France’s CAC finished the day up by 0.69 percent.
Wall Street stocks reversed losses to end higher on Thursday as investors digested strong economic data and signals of a measured interest rate approach from the Federal Reserve.
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Dow Jones closed up by 1.05% percent, S&P 500 closed up by 0.76% percent, Nasdaq settled up by 0.73% percent.
Treasuries Recap
The U.S. 10-year yield ticked up 1 bp to 3.932%, up more than 50 bps in February, its biggest monthly jump since September.
Commodities Recap
Gold prices edged lower on Thursday as the U.S. weekly jobs data hinted at a tight labour market that could keep the Federal Reserve on its rate-hiking cycle, underpinning the dollar and Treasury yields.
Spot gold was down 0.1% at $1,834.80 per ounce by 9:37 a.m. ET (1436 GMT), after rising in previous three sessions. U.S. gold futures fell 0.3% to $1,840.40.
Oil prices rose on Thursday, boosted by signs of a strong economic rebound in top crude importer China and easing worries of aggressive U.S. rate hikes.
Brent crude futures settled at $84.75 a barrel, gaining 44 cents, or 0.5%. U.S. West Texas Intermediate (WTI) crude futures settled at $78.16 a barrel, rising 47 cents, or 0.6%.