America’s roundup: Dollar index rebounds from one-month low, US stocks tumble to worst day in six weeks after Trump tariff action, Gold futures settle up, Oil retreats after failing to hit $70/barrel-march 23rd, 2018
Source: FxWire Pro - Media Round Ups / 22 Mar 2018 17:12:56 Eastern Standard Time
• Trump sets China tariff plan, edges away from global trade war.
• China to respond to US tariffs, resist protectionism -WTO envoy.
• U.S. House approves government spending bill despite conservative revolt.
• U.S. Initial Jobless Claims w/e, 229k, 225k forecast, 226k previous.
• U.S. Jobless Claims 4-Wk Avg w/e, 223.75k, 221.50k previous.
• U.S. Continued Jobless Claims w/e, 1.828 mln, 1.890 mln forecast, 1.879 mln previous, 1.885 mln revised.
• U.S. Jan Monthly Home Price MM, 0.8%, 0.3% previous, 0.4% revised.
• U.S. Jan Monthly Home Price YY, 7.3%, 6.5% previous.
• U.S. Jan Monthly Home Price Index, 259.3, 256.9 previous, 257.3 revised.
• U.S. Mar Markit Comp Flash PMI, 54.3, 55.8 previous.
• U.S. Mar Markit Mfg PMI Flash, 55.7, 55.5 forecast, 55.3 previous.
• U.S. Mar Markit Svcs PMI Flash, 54.1, 55.8 forecast, 55.9 previous.
• U.S. Mar KC Fed Manufacturing, 20, 21 previous.
• Bank of England splits on rates, paving way for May rise.
• Bank of Canada eyes debt, stability in rate moves –Wilkins.
• Euro zone business boom eases off but growth still solid.
• Bank regulators to revise capital rules for trading risk.
Looking Ahead - Economic Data (GMT)
• 23:30 Japan Feb CPI, Core Nationwide YY, 1.0% forecast, 0.9% previous
• 23:30 Japan Feb CPI, Overall Nationwide, 1.4% previous
• 23:30 Japan Feb CPI Index Excluding Fresh Food, 100.4 previous
• 23:50 Japan Foreign Bond Investment w/e JPY, 1,090.0 bln previous
• 23:50 Japan Foreign Invest JP Stock w/e JPY, -432.5 bln previous
Looking Ahead - Events, Other Releases (GMT)
• 12:00 Riksbank general council meeting - Stockholm
• 12:10 Fed's Raphael Bostic speaks on the economic outlook before the Knoxville Economics Forum
• 12:30 BoE Monetary Policy Committee member Gertjan Vlieghe gives speech to the
Birmingham Chamber of Commerce
• 14:30 Fed's Neel Kashkari participates in a question-and-answer session moderated by
Kathleen Hays of Bloomberg - New York
• 15:30 Fed's Robert Kaplan participates in moderated question-and-answer session before the Trellis Foundation Summit on Postsecondary Access, Affordability and Attainment - Austin, Texas
EUR/USD is likely to find support at 1.2268 levels and currently trading at 1.2309 levels. The pair has made session high at 1.2326 and hit lows at 1.2282 levels. Euro declined against the dollar on Thursday as investors digested the implications of a generally dovish outlook from the U.S. Federal Reserve after it raised interest rates by a quarter point as widely expected. While markets were quick to interpret the Fed's forecasts for inflation and growth as signalling that interest rates would rise less quickly than previously expected, some said a tightening in general dollar funding conditions could be dollar positive in the short term. The Fed raised U.S. interest rates by 25 basis points to 1.75 percent on Wednesday and signalled two more hikes for 2018. The threat of a global trade war limited dollar’s gains against euro as U.S. President Donald Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China. Under the terms of the memorandum, Trump will target the Chinese imports only after a consultation period. China blamed U.S. export restrictions for its record trade surplus with the United States, but expressed hope that a solution can be found to settle trade issues.The dollar index, which measures the greenback against a basket of six major currencies, was up 0.03 percent at 89.81. The euro was down 0.19 percent at $1.2309.
GBP/USD is supported in the range of 1.4055 levels and currently trading at 1.4101 levels. It reached session high at 1.4219 and dropped to session low at 1.4073 levels. Sterling briefly jumped against dollar on Thursday after two Bank of England policymakers unexpectedly backed an interest rate increase, but later erased all the gains. The pound spiked above $1.42 before falling back as investors focused on the likelihood that rates will rise only very slowly. It ended up below where it had traded before the BoE's Monetary Policy Committee voted 7-2 to keep its main rate at 0.5 percent. The no-change decision had been widely expected, but the division among policymakers will boost investors' confidence that borrowing costs will rise for only the second time since the 2008 as early as May. Sterling has rallied this week after the European Union and Britain agreed a Brexit transition deal on Monday and UK workers' wage growth hit its fastest pace in almost 2-1/2 years, clearing the path for the BoE to tighten monetary policy soon. Before Thursday's policy meeting, investors had priced in as much as a 70 percent probability of a May rate rise by the BoE. Sterling briefly rose to $1.4220 after the BoE decision before falling back. It was last trading at $1.4101, down 0.2 percent.
USD/CAD is supported at 1.2827 levels and is trading at 1.2934 levels. It has made session high at 1.2936 and lows at 1.2726 levels. The Canadian dollar was little changed against its U.S. counterpart on Thursday, pulling back from an earlier 10-day high, as oil prices fell and investors worried about a potential global trade war. U.S. President Donald Trump initiated trade action against China, saying the U.S. deficit with Beijing was "out of control" at about $504 billion and there was a huge "intellectual property theft situation. Global stocks slipped, with some investors anticipating that China could retaliate. Canada's commodity-linked economy could be hurt if global trade slowed. The price of oil, one of Canada's major exports, fell as investors booked profits after this week's rally, but losses were limited by the ongoing efforts of some major producers to curb supplies. On Wednesday, the loonie posted its biggest gain against the U.S. dollar in nearly four months, buoyed by optimism about a North American Free Trade Agreement deal. The Canadian dollar was last trading nearly unchanged at C$1.2934 to the greenback. The currency's weakest level of the session was C$1.2934, while it touched its strongest since March 12 at C$1.2830.
AUD/USD is supported around 0.7670 levels and currently trading at 0.7706 levels. It hit session high at 0.77853 and made session lows at 0.7684 levels. The Australian dollar edged lower against US dollar on Thursday as investors feared a trade war between the United States and China. U.S. President Donald Trump initiated trade action against China, saying the U.S. deficit with Beijing was "out of control" at about $504 billion and there was a huge "intellectual property theft situation. Harsh measures could trigger retaliation from Beijing and any subsequent trade war would severely disrupt global growth which is seeing its first synchronised upturn in years. Open, export-heavy economies such as Australia, New Zealand and Canada are particularly vulnerable. These concerns sent the Australian dollar down 0.4 percent to $0.7707 in New york trade from as high as $0.7793 earlier in the Asian session.The Aussie rallied overnight after the U.S. Federal Reserve wrong-footed hawks by maintaining its future rate projection, or 'dot plot' at three hikes this year against bets of four increases. Market attention has now shifted to the next major risk event.
Concerns about trade sent European shares tumbling on Thursday as the United States prepared to announce hefty tariffs on Chinese imports, with banks, basic resources stocks and tech the worst-performing.
UK's benchmark FTSE 100 closed down by 1.29 percent, the pan-European FTSEurofirst 300 ended the day down by 1.68 percent, Germany's Dax ended down by 1.81 percent, France’s CAC finished the day down by 1.59 percent.
U.S. stocks dropped on Thursday, with each of the major Wall Street indexes suffering its biggest one-day percentage drop in six weeks, on the heels of an action by President Donald Trump to impose tariffs on up to $60 billion of Chinese imports.
Dow Jones closed down by 2.95 percent, S&P 500 ended up 2.53 percent, Nasdaq finished the day down by 2.44 percent.
U.S. Treasury prices gained on Thursday on rising risk aversion as President Donald Trump signed a presidential memorandum on Thursday that could impose tariffs on up to $60 billion of imports from China.
Benchmark 10-year notes gained 18/32 in price to yield 2.841 percent, down from 2.907 percent on Wednesday.
The yield curve between two-year and 10-year notes flattened to 55 basis points from 58 basis points.
Spot gold dipped on Thursday as the U.S. dollar pared losses on safe-haven buying from investors fearing a trade war between the United States and China, but gold futures rose, with one trader citing arbitrage trades.
Spot gold dipped 0.3 percent at $1,328.21 per ounce by 2:28 p.m. EDT (1828 GMT).U.S. gold futures for April delivery settled up $5.90, or 0.5 percent, at $1,327.40 per ounce. One trader said investors were rolling from the expiring contract of April into the new front month, which is June.
Oil prices fell on Thursday as investors took profits after this week's rally and as U.S. stock markets fell, but losses were limited by the continuing efforts of OPEC and its allies to curb supplies.
Brent crude futures fell 56 cents to settle at $68.91 a barrel, a 0.8 percent loss, having retreated from a session peak of $69.70, close to its highest level since early February.
U.S. West Texas Intermediate (WTI) crude futures fell 87 cents to settle at $64.30 a barrel, a 1.3 percent loss. WTI traded between $64.23 a barrel and $65.74 a barrel during the session.© FxWire Pro 2018. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.