• Europe roundup: Dollar index on track to close 1 pct higher for the week; Gold on track for sharpest weekly drop in 2-1/2 months; European shares largely flat - Friday, February 23rd, 2018

    Source: FxWire Pro - Media Round Ups / 23 Feb 2018 07:25:54   Eastern Standard Time

    Market Roundup

    • EUR/USD -0.28%, USD/JPY 0.11%, GBP/USD -0.11%, EUR/GBP -0.19%
    • DXY 0.24%, DAX -0.02%, FTSE -0.14%, Brent -0.69%, Gold -0.2%
    • DE GDP Detailed QQ SA Q4, 0.6%, f'cast 0.6%, prev 0.7%
    • DE GDP Detailed YY NSA Q4, 2.3%, f'cast 2.3%, prev 2.2%
    • DE GDP Detailed YY SA Q4, 2.9%, prev 2.7%
    • EZ Inflation Final MM Jan, -0.9%, f'cast -0.9%, prev 0.4%
    • EZ Inflation, Final YY Jan, 1.3%, f'cast 1.3%, prev 1.3%
    • EZ Infl Ex Food & Energy MM Jan, -1.3%, f'cast -1.6%, prev 0.4%
    • EZ Infl Ex Food & Energy YY Jan, 1.2%, f'cast 1.0%, prev 1.2%
    • Chance of halting Brexit now close to 50:50, says leading campaigner
    • Japan's stagnant inflation set to keep BOJ exit from stimulus distant
    • Xi confidant emerges as front runner to head China’s central bank - sources
    • Gold heads for biggest weekly loss this year as dollar bounces
    • Oil slips to $66 a barrel as U.S. output offsets OPEC curbs

    Economic Data Ahead

    • (0830 ET/1330 GMT) CA CPI Inflation MM (Jan) (mkt 0.4%, prev -0.4%)
    • (0830 ET/1330 GMT) CA CPI Inflation YY (Jan) (mkt 1.4%, prev 1.9%)
    • (0830 ET/1330 GMT) CA CPI MM SA (Jan) (prev 0.2%)
    • (0830 ET/1330 GMT) CA CPI BoC Core YY (Jan) (prev 1.2%)
    • (0830 ET/1330 GMT) CA Core CPI MM SA (Jan) (prev 0.1%)
    • (0830 ET/1330 GMT) CA CPI BoC Core MM (Jan) (prev -0.5%)

    Key Events Ahead

    • n/a Treasury's $15 bn reopened 2-Yr floating rate notes settle; raises all new cash
    • (1015 ET/1515 GMT) U.S. Monetary Policy Forum featuring Fed’s Rosengren, Dudley, Mester, George; NY
    • (1100 ET/1600 GMT) Federal Reserve releases Monetary Policy Report
    • (1145 ET/1645 GMT)  FedTrade Operation 30-year Fannie Mae / Freddie Mac (max $1.015 bn)
    • (1330 ET/1830 GMT) Fed's Mester participates in panel review of monetary policy objectives; NY
    • (1540 ET/2040 GMT) Fed's Williams speaks on the economic outlook and monetary policy; Los Angeles, CA

    FX Beat

    DXY: The dollar index against a basket of six major currencies jumped till 90.06 and is currently trading around 89.86. Upside is capped by trend line resistance at 90.25 and any break above will take the index till 90.56/90.88. A close below 89.50 will drag the index till 89/88.25 in the short term. 

    EUR/USD:  EUR/USD has shown a decent recovery after a three day continuous selling. The pair still trades with a negative bias. Release of final inflation figures which matched preliminary figures for the month of January had little impact on the pair. Stronger greenback keeps pressure on the downside. The major was down 0.22% on the day, trading at 1.2300 at the time of writing. Near term resistance seen at 1.2375 (20- day MA) and break above will take the pair till 1.2442 (61.8% Fibo)/1.2500. Bullish continuation can be seen above 1.2550. On the lower side, near term support is around 1.2275 and any violation below will drag the pair till 1.2200/1.2165.

    USD/JPY: The Japanese yen showed little reaction to data which showed Japan's annual core consumer inflation rate was unchanged in January. USD/JPY was seen consolidating previous session's slump. The major was trading at 106.85 levels at the time of writing after hitting session highs at 107.13. Technical indicators are neutral for the day. Near-term trend is still bearish. The pair finds major resistance at 20-DMA at 108.15. We see upside only on decisive break above. On the downside, we see scope for test of 105.55 (major trendline).

    GBP/USD:  Cable upside ran out of steam ahead of the key 1.40 psychological mark. The major quickly retreated from session highs at 1.3995 to currently trade around the 1.3940 region. 20-DMA is stiff resistance on the upside. On the lower side, near term support is around 1.39200 and any break below will drag the pair down till 1.38600/1.3800/1.37600 (Feb 9 th low). Break above 1.40 will take the pair till 1.4050/1.4145. The pair should break above 1.4145 for further upside. 

    EUR/JPY: EUR/JPY breaks below 23.6% Fib, is on track to test 200-DMA at 131.13. Technical indicators are bearish. RSI and Stochs are biased lower. Momentum studies are heavily bearish, but Stochs are in oversold levels so caution advised. The pair is capped below 110-EMA which is stiff resistance at 132.95. Violation at 200-DMA could see further weakness. Scope then for test of 38.2% Fib at 128.85. On the flipside, break above 110-EMA will see test of 20-DMA at 133.74. Breakout at 20-DMA invalidates bearish bias.          

    AUD/USD: The antipodean currencies set for weekly losses on dovish rates outlook. The Australian dollar slipped 0.33 percent to $0.7819, while the New Zealand dollar fell 0.61 percent to $0.7293. Upbeat New Zealand retail sales data did little to boost the kiwi. Technical studies are bearish, we see further weakness on resurgent USD demand. AUD/USD bears likely to target 200-DMA at 0.7776. Violation there could see test of 61.8% Fib at 0.7743. NZD/USD has broken below 20-DMA and finds next major support at 23.6% Fib at 0.7281 ahead of trendline at 0.7270.

    Equities Recap

    European shares largely flat, markets barely budged in early moves. The European STOXX 50 index was down 0.09 percent at 3,428.78 points.          

    Britain's FTSE 100 trades 0.40 percent lower at 7,223.46 points, while mid-cap FTSE 250 was up  0.09 percent at 19,754.61 points.

    Germany's DAX fell 0.05 percent to trade at 12,455.56 points; while France's CAC 40 trades 0.16 percent lower at 5,300.76 points.

    Commodities Recap

    U.S oil under pressure, slips further on Friday on concerns that rising U.S. oil output and exports will offset OPEC curbs. Brent crude, the global benchmark, was down 34 cents at $66.05 at 0934 GMT. U.S. crude fell 27 cents to $62.50. 

    Gold on track for sharpest weekly drop in 2-1/2 months. Strong dollar adds pressure, spot gold was down 0.4 percent at $1,326.65 an ounce as of 0741 GMT, while U.S. gold futures were down 0.3 percent at $1,328.40 per ounce. 

    Among other precious metals, silver fell 0.3 percent to $16.57 an ounce, palladium rose 0.1 percent to $1,039.74 and platinum climbed 0.1 percent to $994.20.

    Treasuries Recap

    The UK gilts remained narrowly mixed Friday as investors remained sidelined in a muted trading activity ahead of Bank of England’s (BoE) Monetary Policy Committee (MPC) member Ramsden’s speech, scheduled for later today. The yield on the benchmark 10-year gilts slid 1/2 basis point to 1.54 percent, the super-long 30-year bond yields hovered around 1.93 percent and the yield on the short-term 2-year steadied at 0.68 percent 

    New Zealand government bonds gained at the time of closing Friday after the country’s retail sales for the fourth quarter of this year came in higher than market expectations. Further, dairy product prices also declined at the latest GlobalDairyTrade auction, sliding for the first time this year after three consecutive increases. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1 basis point to 2.98 percent, the yield on 20-year also edged 1 basis point lower to 3.48 percent nd the yield on short-term 2-year too ended 1 basis point lower at 1.89 percent. 

    Japanese government bonds gained on Friday after the Bank of Japan (BoJ) conducted a regular open market operation. Also, the firmness in the U.S. Treasuries supported the bond prices. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1/2 basis point to 0.049 percent, the yield on the long-term 30-year note declined 1-1/2 basis points to 0.757 percent and the yield on short-term 2-year slid 1/2 basis point to -0.153 percent by 03:30 GMT.

    Australian bonds jumped during early Asian session on the last trading day of the week, tracking similar movement in the U.S. Treasuries, offsetting prior anxiety raised that came after Federal Reserve minutes signaled more interest-rate hikes in the offing. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 2-1/2 basis points to 2.83 percent, the yield on the long-term 30-year note fell 1-1/2 basis points to 3.47 percent and the yield on short-term 2-year traded 2 basis points lower at 1.99 percent by 03:15 GMT.