22 Mar: US$ recovers from Fed inspired selloff but yields remain heavy. Stocks higher. Flash PMIs in focus for Friday.

By | March 22, 2019

 

The US$ has regained much of its lost ground following the FOMC outcome of the previous session, while stocks are up by 1.0%/1.5%, led by technology stocks, which surged as jitters over the Fed’s warning of an economic slowdown were cushioned by upbeat US economic data. The metals are a bit lower, while oil remains close to $60.00pb.

The dollar received some help in its recovery, with Sterling falling sharply as the latest Brexit arguments continue, while German 10Y bund yields collapsed, to 0.04% from 0.12% just 2 days ago, and did nothing to help the Euro. The Aud and Kiwi have given up yesterday’s gains, while US$Jpy and US$Chf have both been choppy.

In terms of data, both the initial and continuing jobless claims fell more than expected, and the Philadelphia Fed Mfg Survey rebounded sharply from -4.1 last month to +13.7, assisting the dollar to regain its balance. Earlier, in Europe, the BoE kept the bank rate at 0.75% and the asset purchase target at £435Bio, as widely expected with both decisions made by a unanimous 9-0 vote. The SNB also left its “expansionary” monetary policy unchanged, as expected, at -0.75%.  Elsewhere, the UK, retail sales including auto and fuel rose by 0.4% mm, 4.0% yy in February, much better than expectation of -0.4% mm, 3.3% yy.

Friday will kick off with the Japanese inflation figures for February after which the flash Manufacturing/Services/Composite PMIs will dominate traders focus, beginning with the Nikkei Mfg PMI and then those from the EU and the US. There will also be the release of the EU Current Account and speeches from the ECB’s De Guindos and Mersch, while the US will see the January Wholesale Inventories (exp 0.2%), the February Existing Home Sales (exp 5.10 mio,+ 2.2%) and Monthly Budget Statement. Have a good weekend.

Economic data highlights will include:                                                                                           

Fri: Japan CPI, BOE Quarterly Bulletin, EU/US Flash PMIs, Speeches: ECB’s De Guindos/Mersch, US Existing Home Sales, Wholesale Inventories, Monthly Budget Statement

Market moves, in brief:

FX: DXY 96.43 (0.51%)

Bonds: US10Y; 2.53% (+0.34%), German 10Y; 0.042%(-49.64%), UK 10Y; 1.063% (-7.27%), Australian 10Y; 1.89% (-2.98%), NZ 10Y; 2.010% (-2.43 %), China 10Y; 3.175% (+0.6%)

Stock Indices: DJI; +0.91%, S+P; 1.09%, NASDAQ; 1.20%, EUStoxx50; +0.14%, FTSE100; +0.88%, Shanghai Composite; +0.35%,

Metals: Gold 1308 oz (-0.25%), Silver 15.46 oz (-0.12%), Copper 2.91 lb (-0.58%), Iron Ore 85.65 pt(+0.28%),

Oil: WTI 59.82pb (-0.25%)

CURRENCIES
EURUSD: 1.1372
Res  1.1400  1.1445  1.1485
Sup  1.1340  1.1265  1.1300
USDJPY: 110.79
Res  111.00  111.25  111.50
Sup  110.55  110.35  110.15
GBPUSD: 1.3105
Res  1.3145  1.3200  1.3250
Sup  1.3050  1.3005  1.2960
USDCHF: 0.9923
Res  0.9940  0.9970  1.0005
Sup  0.9895  0.9865  0.9840
AUDUSD: 0.7111
Res  0.7125  0.7145  0.7165
Sup  0.7090  0.7075  0.7055
NZDUSD: 0.6875
Res  0.6895  0.6915  0.6940
Sup  0.6860  0.6845  0.6825
INDICES / COMMODITIES
S&P.fs: 2861.53
Res  2870.00  2880.00  2890.00
Sup  2850.00  2840.00  2830.00
DJ30.fs: 25999.00
Res  26040.00  26140.00  26235.00
Sup  25900.00  25775.00  25640.00
SPI200.fs: 6192
Res  6210  6225  6240
Sup  6160  6175  6140
XAUUSD: 1308
Res  1315.00  1320.00  1325.00
Sup  1305.00  1300.00  1295.00
XAGUSD: 15.46
Res  15.55  15.65  15.75
Sup  15.40  15.30  15.20
WTI.fs: 59.82
Res  60.50  61.40  62.25
Sup  59.50  58.70  58.00