FX News Today
European Fixed Income Outlook: : Stock markets remained under pressure during the Asian session, as yields moved higher in the wake of Powell’s testimony yesterday and weaker than expected data out of China and Japan added to pressure. The 10-year Treasury yield is down from earlier highs, but remains up 0.7 bp on the day and sightly above the 2.9% mark. 10-year JGB yields are up 0.9 bp at 0.042%. Stock markets meanwhile got stung by the reminder that central banks are still on course to take out stimulus and Powell’s reference to the risk of overheating and the Nikkei closed with a loss of 1.44%, the Topix was down -1.23% at the close. Hang Seng and CSI 300 are down -1.46% and -0.62% respectively, as China’s official manufacturing PMI fell to 50.3 from 51.3 and Japan industrial production dropped -6.6% m/m. U.S. stock futures are also heading south as are UK100 futures and the front end WTI future is down on the day at USD 62.72 per barrel. The very busy data calendar today include German jobless numbers as well as Eurozone inflation numbers, the Swiss KOF and a German 10-year auction.
German GfK consumer confidence dipped to 10.8 with March numbers from 11.0 in February. An unexpected correction after the surprisingly strong February numbers. The full details for February, show economic expectations falling back in tandem with income expectations and the willingness to buy, although the willingness to save turned even more negative. Overall readings remains at very high levels, like business confidence surveys, but suggest some levelling off which will back the arguments of the ECB doves for caution with regard to any changes in guidance.
Charts of the Day
Main Macro Events Today
- German Labour Data – Confidence readings may have fallen back more than expected in February, but preliminary PMI reports still suggested that companies remain sufficiently optimistic about the recovery to take on more staff and German jobless numbers expected to dip -15K in February, leaving the jobless rate unchanged at just 5.4%.
- Eurozone Inflation – The Eurozone HICP for February was expected to show a headline rate of 1.2% y/y, but has a bias to the downside after yesterday’s preliminary readings from Spain and Germany. The former may have come in higher than expected, but the latter fell back more than anticipated. Still, the German numbers also suggested that much of the dip was due to base effects from energy and food prices, so the real focus will be on core inflation, rather than the headline rate and even German numbers suggest that could remain steady.
- US Prelim GDP – a second release of Q4 GDP likely trimmed to 2.5% from 2.6%.
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.