Posted at 20 March 2023 / Categories Market Roundups
Market Roundup
•EU French 6-Month BTF Auction 2.823%,2.819% previous
•EU French 12-Month BTF Auction 2.760%, 2.891% previous
•EU French 3-Month BTF Auction 2.613%,2.665% previous
•US 3-Month Bill Auction 4.675%,4.750% previous
•US 6-Month Bill Auction 4.620%, 4.700% previous
Looking Ahead Economic Data(GMT)
•02:00 NZ Credit Card Spending (YoY) 17.9% previous
Looking Ahead Events and Other Releases(GMT)
• 00:30 Australia RBA Meeting Minutes
Currency Summaries
EUR/USD: The euro gained on Monday as dollar dipped as hopes grew that the U.S. Federal Reserve could pause its interest rate hikes in light of stresses in the global banking sector . Market participants are mixed on the Federal Reserve's decision, while bets for a rate-hike pause have increased. Pricing in fed funds futures have been volatile for the past week, swinging between the odds of no hike when policymakers conclude a two-day meeting on Wednesday, and a 25 basis point increase. A 50 basis points rise is now seen as unlikely. Immediate resistance can be seen at 1.0725 (23.6%fib), an upside break can trigger rise towards 1.0762Higher BB).On the downside, immediate support is seen at 1.0665(38.2%fib), a break below could take the pair towards 1.0619(50%fib).
GBP/USD: The pound rose on Monday ahead of a key Bank of England (BoE) decision on interest rates and inflation data due later this week, while UBS's Swiss government-backed takeover of Credit Suisse failed to calm nerves. Global financial markets continue to be rocked by the collapse of several US regional banks and problems at major Swiss lender Credit Suisse. While Wednesday's UK inflation data is expected to show some signs of abating, amid uncertainty in global financial markets, money markets are pricing in 50% chance of no interest rate hike by the BoE on Thursday .Immediate resistance can be seen at 1.2299 (23.6%fib), an upside break can trigger rise towards 1.2358(Higher BB).On the downside, immediate support is seen at 1.2175(5DMA), a break below could take the pair towards 1.2114(38.2%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Monday as investors weighed the possibility that the Federal Reserve could leave interest rates on hold this week in the face of banking sector stress.Traders have raised bets the U.S. central bank will hit the pause button to ensure financial stability when it releases its latest policy decision on Wednesday, a move that has been helping to narrow the gap between Canadian and U.S. bond yields. Canadian consumer price data for February, due on Tuesday, could offer clues on the central bank’s policy outlook. The Canadian dollar was trading 0.5% higher at 1.3655 to the greenback , after moving in a range of 1.3653 to 1.3747. Immediate resistance can be seen at 1.3711 (5DMA), an upside break can trigger rise towards 1.3729(Higher BB).On the downside, immediate support is seen at 1.3653 (38.2% fib), a break below could take the pair towards 1.3583(50% fib).
USD/JPY: The dollar initially dipped on Monday but recovered some ground as investors heaved a tentative sigh of relief that a historic weekend rescue of financial heavyweight Credit Suisse is containing the banking crisis for now. Sunday saw the most dramatic state intervention since the 2008 global financial crisis, with UBS buying Credit Suisse for 3 billion francs ($3.2 billion) in a takeover backstopped by unlimited funding pledges from the world's top central banks. The speedy orchestration of Credit Suisse's takeover was received by investors as an acceptable measure to stem contagion, but fears that other struggling banks might teeter next kept markets on edge. Strong resistance can be seen at 132.33(5DMA), an upside break can trigger rise towards 133.07 (38.2%fib).On the downside, immediate support is seen at 130.55(23.6%fib), a break below could take the pair towards 129.44(Lower BB).
Equities Recap
European stocks reversed early losses and rose on Monday as bank shares recovered from three-month lows triggered by UBS' deal to buy Credit Suisse at a fraction of market value.
UK's benchmark FTSE 100 closed up by 0.93 percent, Germany's Dax ended up by 1.12 percent, France’s CAC finished the day up by 1.27 percent.
US stocks jumped on Monday after the Credit Suisse bailout deal and the central bank's attempt to shore up confidence in the financial system provided some relief to investors.
Dow Jones closed up by 1.20% percent, S&P 500 closed up by 0.89 % percent, Nasdaq settled down by 0.39% percent.
Treasuries Recap
U.S. Treasury yields rose on Monday as the takeover of Credit Suisse and central bank steps to shore up liquidity helped allay investor concerns as they gauge whether the Federal Reserve may pause raising interest rates later this week.
The two-year U.S. Treasury yield, which often moves in step with interest rate expectations, rose 7.8 basis points to 3.924% after sliding to 3.635% in Europe.
Commodities Recap
Gold prices retreated from their highest level in a year in volatile trading on Monday, as share markets and Treasury yields bounced back on central banks' efforts to shore up confidence in the financial sector.
Spot gold dipped 0.5% to $1,977.18 per ounce by 1:57 p.m. EDT (1757 GMT), after sliding over 1%, while U.S. gold futures rose 0.5% to settle at $1,982.80.
Oil prices rebounded and rose over 1% on Monday after diving to their lowest levels in 15 months as the market worried that risks in the global banking sector could spark a recession that would sap fuel demand.
In volatile trade, Brent crude futures for May rose 82 cents, or 1.1% to $73.79 a barrel. U.S. West Texas Intermediate crude futures for April gained 90 cents, or 1.4%, at $67.64 on the eve of the contract's expiry. The more actively traded May futures rose 89 cents, or 1.3%, at $67.82 a barrel.