• Europe roundup: Sterling gains as UK wages growth nears 2-1/2 year peak, Dollar index off 3-week high ahead of FED policy decision, European shares ease - Wednesday, March 21st, 2018

    Source: FxWire Pro - Media Round Ups / 21 Mar 2018 08:05:24   Eastern Standard Time

    Market Roundup

    • EUR/USD -0.08%, USD/JPY 0.51%, GBP/USD 0.05%, EUR/GBP -0.16%
       
    • DXY 0.04%, DAX -0.3 %, FTSE 0.03%, Brent 0.79%, Gold -0.15%
       
    • Powell's Fed likely to raise rates, may upgrade 2018 outlook
       
    • German economic advisors raise growth forecast, warn of increased risks
       
    • German economy likely to grow by 2.6 pct this year, 2.1 pct next - Ifo
       
    • Great Britain ILO Unemployment Rate Jan, 4.3%, f'cast 4.4%, prev 4.4%
       
    • Great Britain Employment Change Jan, 168k, f'cast 84k, prev 88k
       
    • Great Britain Avg Wk Earnings 3M YY Jan, 2.8%, f'cast 2.6%, prev 2.5%
       
    • Great Britain Avg Earnings (Ex-Bonus) Jan, 2.6%, f'cast 2.6%, prev 2.5%
       
    • Great Britain Claimant Count Unem Chng Feb, 9.2k, f'cast -5.0k, prev -7.2k
       
    • G20 sees need for 'dialogue,' fails to defuse trade war threat
       
    • LDP policy chief: BOJ should consider exit strategy from stimulus - NHK
       
    • S.Korea's Moon says three-way summit with N.Korea, U.S. possible
       
    • Gold gains on dollar decline as market awaits Fed rate outlook
       
    • Oil edges up on Middle East tensions, but soaring U.S. output still weighs

    Economic Data Ahead

    • (0830 ET/1230 GMT) The U.S. Commerce Department is likely to report that current account deficit widened to $125.0 billion in the fourth-quarter from $100.6 billion in the previous quarter.
    • (1000 ET/1400 GMT) National Association of Realtors is likely to report that U.S. existing home sales rose 0.5 percent to an annual rate of 540,000 million units in February, compared to 5.38 million units in January.
       
    • (1000 ET/1400 GMT) Swiss National Bank releases its Quarterly Bulletin.
       
    • (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending March 16.
       
    • (1400 ET/1800 GMT) The U.S. Federal Reserve concludes its two-day policy meeting and announces its decision on interest rates.
       
    •  (1430 ET/1830 GMT) The FOMC releases its statement regarding monetary policy.
       
    • (1600 ET/2000 GMT) The Reserve Bank of New Zealand will announce its interest rate decision and release monetary policy statement.
       
    • (1700 ET/2100 GMT) The Brazilian central bank will meet to set its benchmark Selic rate and is expected to cut interest rates by 25 basis points to an all-time low of 6.50 percent.
       

    Key Events Ahead

    • (1430 ET/1830 GMT) U.S. Federal Reserve Chair Jerome Powell holds a news conference on FOMC interest rate decision
       

    FX Beat

    DXY: The dollar index eased, reversing some of its previous session gains as investors focused on whether the Federal Reserve's will indicate three or four hikes for this year. The greenback against a basket of currencies 0.3 percent down at 90.14, having touched a high of 90.45 on Tuesday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at 52.53 (Bullish) by 1000 GMT.

    EUR/USD: The euro rose after tumbling to a 3-week low in the previous session, as the greenback retreated from recent highs ahead of the Federal Reserve's first expected rate hike of 2018. The European currency traded 0.3 percent up at 1.2280, having touched a low of 1.2239 the day before, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at -25.02 (Neutral) by 0900 GMT. Immediate resistance is located at 1.2307 (5-DMA), a break above targets 1.2383 (Mar. 15 High). On the downside, support is seen at 1.2300 (Mar. 15 Low), a break below could drag it lower 1.2251 (Mar. 2 Low).

    USD/JPY: The dollar declined against the Japanese yen as investors await clarity on whether the policy-setting Federal Open Market Committee will forecast four rate hikes this year. The major was trading 0.2 percent down at 106.30, having hit a high of 106.60 on Tuesday, its highest since Mar. 14. FxWirePro's Hourly Yen Strength Index stood at -67.45 (Bearish) by 0900 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the FOMC announcement and Jerome Powell's first news conference as Fed chief. Immediate resistance is located at 106.74 (Mar. 14 Low), a break above targets 106.97 (Mar 12 High). On the downside, support is seen at 105.92 (Previous Session Low), a break below could take it lower 105.25.

    GBP/USD: Sterling rallied above the 1.4000 handle after data showed British workers' overall pay rose at the fastest pace in nearly two-and-a-half years over the three months to January. The economy's workers' total earnings, including bonuses rose by an annual 2.8 percent in the three months to January, while regular pay rose by 2.6 percent, as expected. The major traded 0.5 percent up at 1.4067, having hit a high of 1.4088 on Monday, it’s highest since Feb. 16. FxWirePro's Hourly Sterling Strength Index stood at 152.33 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.4088 (Mar. 19 High), a break above could take it near 1.4145. On the downside, support is seen at 1.3973 (5-DMA), a break below targets 1.3928 (10-DMA). Against the euro, the pound was trading 0.2 percent down at 87.24 pence, having hit a high of 87.24 pence the day before, it’s highest since Feb 1.

    USD/CHF: The Swiss franc rose as investors refrained from taking big positions on concerns that whether the U.S. Federal Reserve will indicate faster monetary tightening this year. The major trades 0.3 percent down at 0.9536, having touched a high of 0.9569 the day before, it’s highest since Jan. 24. FxWirePro's Hourly Swiss Franc Strength Index stood at -75.53 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9581 (Jan. 24 High) and any break above will take the pair to next level till 0.9633 (Jan 23 High). The near-term support is around 0.9493 (10-DMA) and any close below that level will drag it till 0.9437 (21-DMA).

    Equities Recap

    European shares declined, while the greenback eased as investors cautiously awaited the conclusion of a U.S. Federal Reserve meeting for signals on the pace of expected interest rate hikes.

    The pan-European STOXX 600 index plunged 0.2 percent to 374.78 points, while the FTSEurofirst 300 index declined 0.2 percent to 1,466.25 points.

    Britain's FTSE 100 trades 0.3 percent lower at 7,042.04 points, while mid-cap FTSE 250 shed 0.3 percent to 19,656.88 points.

    Germany's DAX fell 0.1 percent at 12,292.88 points; France's CAC 40 trades 0.3 percent declined at 5,238.50 points.

    Commodities Recap

    Crude oil prices steadied near an over 3-week high touched in the previous session, boosted by tensions in the Middle East and healthy demand, however, rising U.S. output continued to weigh on markets. International benchmark Brent crude was trading 0.3 percent up at $67.74 per barrel by 0921 GMT, having hit a high of $67.84 on Tuesday, its highest since Feb. 26. U.S. West Texas Intermediate was trading 0.1 percent up at $63.80 a barrel, after rising as high as $63.95 the day before, its strongest since Mar. 27.

    Gold prices rose as investors await the outcome of the U.S. Federal Reserve's meeting this week for signs of the pace of monetary tightening. Spot gold was 0.5 percent higher at $1,317.12 per ounce at 0924 GMT, having hit a low of $1,307.05 an ounce on Tuesday, its lowest since Mar. 1. U.S. gold futures for April delivery rose 0.27 percent to $1,315.40 per ounce.

    Treasuries Recap

    The UK gilts slumped following better-than-expected employment rate for the month of January. The yield on the benchmark 10-year gilts, jumped 4-1/2 basis points to 1.52 percent, the super-long 30-year bond yields climbed 3-1/2 basis points to 1.82 percent and the yield on the short-term 2-year traded 5 basis points higher at 0.93 percent.

    The German bunds traded on the downside during early European session in a quiet day that witnessed no data of any major significance. The German 10-year bond yields, which move inversely to its price, rose 1 basis point to 0.59 percent, the yield on the 30-year note edged 1/2 basis point higher to 1.22 percent and the yield on short-term 2-year too traded 1/2 basis point higher at -0.57 percent.

    The New Zealand government bonds ended lower even as global dairy prices fell further at the country’s latest GlobalDairyTrade (GDT) auction. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.86 percent, the yield on 20-year jumped 2-1/2 basis points to 3.37 percent and the yield on short-term 2-year closed 1 basis point higher at 1.92 percent.

    The Australian bonds slumped following weakness in the U.S. Treasuries as hopes of interest rate hike reign market sentiments. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.715 percent, the yield on the long-term 30-year note traded 2 basis points higher at 3.306 percent and the yield on short-term 2-year climbed 3 basis points to 2.035 percent.