FX News Today
European Fixed Income Outlook: :Asian bond yields mostly dropped, with the 10-year JGB down -0.8 bp at 0.035%, after dovish BoJ comments. The 10-year Treasury yield has stabilised, after yesterday’s slide and is trading at 2.86%. The dip in yields yesterday did nothing to boost stock market confidence and Wall Street closed with broad losses. The negative sentiment spilled over into Asian markets and Nikkei and Topix closed with losses of 1.56% and 1.59% respectively, and stocks were also under pressure in Hong Kong and Australia with materials and health care stocks leading the way. Mainland China bourses outperformed after a better than expected Caixin manufacturing PMI and the CSI 300 is up 0.42%. Markets remain nervous ahead of Powell’s hearing, after the Fed Chairman’s comments hit markets earlier in the week. Reports that Trump plans a 25% tariff on steel imports is adding to pressure. U.S. futures are mostly down, while oil prices are marginally higher on the day with the front end WTI future trading at USD 61.70 per barrel. Today’s calendar focuses on manufacturing PMI readings for the Eurozone, the U.K. and Switzerland. the U.K. also has lending data, the Eurozone jobless numbers and there are bond auctions in Spain and France.
FX Update: The dollar has remained underpinned versus most currencies, bolstering to the USD index (DXY) to a five-week high of 90.74 and pushing EURUSD to a six-week low of 1.2183. AUDUSD has registered the biggest move in trade so far on the calendar day out of the currencies we track, showing a 0.4% decline, with the Australian dollar underperforming amid reports that Trump is set to announce a 25% tariff on U.S. steel imports. Australian is the world’s biggest export of iron ore, which is the base metal of steel. AUDUSD logged a two-month low at 0.7717, and AUDJPY, a cross that many consider is a forex market barometer of global investor risk appetite, has forayed into nine-month low terrain. USDJPY, while having recouped to the upper 106.0s, edged out a two-day low of 106.53 earlier in Tokyo trade, and EURJPY posted its lowest level since last mid September, at 129.85. The yen’s outperformance has come amid a backdrop of falling equity markets amid a backdrop of Fed tightening expectations and concerns about Trump starting trade wars.
Charts of the Day
Main Macro Events Today
- UK & Eurozone Manufacturing PMI – The February Eurozone Markit manufacturing PMI, is seen unchanged at at 58.5.
- US Core PCE and Jobless claims – Initial jobless claims for the February 17 week will be scrutinized at it coincides with the BLS survey week. It is expected to released at 226K from 222K last week. Personal income is expected to grow 0.2% in January, while consumption should rise 0.2% as well.
- Fed Chair Powell Testifies
- US ISM Manufacturing PMI – ISM is expected to drop to 58.7 in February from 59.1.
Support and Resistance Levels
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.