Posted at 08 March 2023 / Categories Market Roundups
Market Roundup
•US Feb ADP Nonfarm Employment Change242K, 200K forecast,106K previous
•US Exports 257.50B, 250.20B previous
•Canada Jan Imports 65.10B,63.13B previous
•US Imports 325.80B, 317.60B previous
•Canada Jan Exports 67.02B, 62.97B previous
•Canada Jan Trade Balance 1.92B,-0.06B forecast,-0.16B previous
•US Jan Trade Balance -68.30B, -68.90B forecast,-67.40B previous
•US Jan JOLTs Job Openings 10.824M, 10.500M forecast,11.012M previous
•Canada BoC Interest Rate Decision 4.50%, 4.50% forecast,4.50% previous
Looking Ahead Economic Data (GMT)
•23:30 Japan GDP Private Consumption (QoQ) (Q4)0.5% forecast,0.0% previous
•23:30 Japan GDP External Demand (QoQ) (Q4) 0.3% forecast,-0.6% previous
•23:30 Japan GDP (QoQ) (Q4)0.2% forecast,-0.3% previous
•23:30 Japan GDP (YoY) (Q4) 0.8% forecast,-1.0% previous
•00:30 Australia Building Approvals (MoM) -27.6% forecast,15.3% previous
•00:30 Australia Private House Approvals -13.8% forecast,-2.1% previous
•01:30 China Feb CPI (YoY) 1.9% forecast,2.1% previous
•01:30 China Feb PPI (YoY) -1.3% forecast,-0.8% previous
•01:30 China Feb CPI (MoM) 0.2% forecast,0.8% previous
Looking Ahead Events And Other Rereleases(GMT)
•No significant events
Currency Summaries
EUR/USD: The euro was little changed against the dollar on Wednesday as investors were grappled with mixed messages from Federal Reserve Chair Jerome Powell and U.S. economic data ahead of upcoming labor and inflation reports. Data released on Wednesday painted a picture of U.S. economic hardiness and did very little to assuage those fears. Job openings remain elevated, private payrolls beat consensus estimates and demand for home loans increased despite the ongoing upward trajectory of mortgage rates. The euro was little changed at $1.0547. It fell to $1.0524 earlier and is trading just above this year's low of $1.04820 reached on Jan. 6. Immediate resistance can be seen at 1.0596 (9DMA), an upside break can trigger rise towards 1.0699(38.2%fib).On the downside, immediate support is seen at 1.0521 (50%fib), a break below could take the pair towards 1.0490(Lower BB).
GBP/USD: Sterling steadied on Wednesday after falling to an almost four-month low against the dollar as investors paused for breath after the U.S central bank chair said he is prepared for bolder rate hikes.Sterling flattened at $1.1825 after briefly touching its lowest level against the dollar since November. It sank 1.7% against the U.S. currency on Tuesday when Fed Chair Jerome Powell told U.S. lawmakers that the central bank was prepared to raise interest rates in larger steps. The pound has slipped around 1.6% against the dollar so far in March. Immediate resistance can be seen at 1.1915(5DMA), an upside break can trigger rise towards 1.1987(38.2%fib).On the downside, immediate support is seen at 1.1842(50%fib), a break below could take the pair towards 1.1792(Lower BB).
USD/CAD: The Canadian dollar weakened on Wednesday to a near five-month low against its U.S. counterpart, as the Bank of Canada paused its tightening campaign in a move that contrasted with the Federal Reserve's shift this week to a more hawkish message. The Bank of Canada left its key overnight interest rate on hold at 4.50%, as expected, becoming the first major central bank to move to the sidelines in the face of an anticipated easing of high inflation. Meanwhile, economic data showed that Canada recorded a surprise trade surplus of C$1.9 billion ($1.4 billion) in January, driven by broad-based gains in exports.The Canadian dollar was trading 0.4% lower at 1.38 to the greenback. Immediate resistance can be seen at 1.3815 (23.6%fib), an upside break can trigger rise towards 1.3845 (Higher BB).On the downside, immediate support is seen at 1.3741 (38.2%fib), a break below could take the pair towards 1.3711 (5 DMA).
USD/JPY: The dollar steadied against yen on Wednesday after Federal Reserve Chairman Jerome Powell offered no major surprises on his second day of testimony before Congress and as investors waited for jobs data on Friday.Powell reaffirmed his message of higher and potentially faster interest rate hikes, but emphasized that debate was still underway, with a decision hinging on data to be issued before the U.S. central bank's policy meeting in two weeks. Investors are focused on February jobs data due on Friday for confirmation that continued strong jobs growth supports bigger rate increases. The dollar has jumped since data on Feb. 3 showed that employers added 517,000 jobs in January. The Japanese yen weakened 0.11% versus the greenback at 137.31 per dollar .Strong resistance can be seen at 138.14(23.6%fib), an upside break can trigger rise towards 138.96(Higher BB).On the downside, immediate support is seen at 136.40 (9DMA), a break below could take the pair towards 135.90(38.2%fib).
Equities Recap
European shares were muted on Wednesday as better-than-expected employment data from the U.S. fanned worries over Federal Reserve Chair Jerome Powell's hawkish rhetoric on interest rates, while investors also assessed the euro zone's fourth-quarter growth numbers.
UK's benchmark FTSE 100 closed down by 0.13 percent, Germany's Dax ended down by 0.60 percent, France’s CAC finished the day down by 0.46 percent.
The S&P 500 ended an indecisive session with a nominal increase on Wednesday as a spate of economic data appeared to support Federal Reserve Chairman Jerome Powell's reassertion, in his second day of congressional testimony, that the central bank would continue to ratchet up policy rates until inflation subsides.
Dow Jones closed down by 1.72% percent, S&P 500 closed by 1.53% percent, Nasdaq settled down by 1.25% percent.
Treasuries Recap
Shorter-dated U.S. Treasury yields rose on Wednesday, with the two-year on track for its third straight session of gains, as data showed the labor market remained tight and Federal Reserve Chair Jerome Powell kept open the possibility of higher and faster rate hikes.
The yield on 10-year Treasury notes was down 0.1 basis points at 3.974%.The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 5.3 basis points at 5.064%.
The 10-year TIPS breakeven rate was last at 2.331%, indicating the market sees inflation averaging 2.3% a year for the next decade.
Commodities Recap
Gold steadied on Wednesday after shedding nearly 2% in the previous session on an elevated dollar, with demand for the non-yielding asset blunted by Federal Reserve Chair Jerome Powell signalling more rate hikes.
Spot gold was nearly flat at $1,813.85 per ounce by 1:44 p.m. ET (1844 GMT) after hitting its lowest since Feb. 28 at $1,809.27. U.S. gold futures settled 0.1% lower at $1,818.60.
Oil prices fell on Wednesday as fears that more aggressive U.S. interest rate hikes would pressure economic growth and oil demand outweighed a larger-than-expected draw in U.S. crude stocks.
Brent crude futures were down 63 cents, or 0.8%, to $82.66 per barrel, while U.S. West Texas Intermediate (WTI) crude futures slipped 92 cents, or 1.2%, to $76.66 a barrel.