European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei up 0.30 %, Shanghai Composite fell 0.85 %, Hang Seng declined 1.20 %, ASX 200 lost 0.45 %
  • Commodities: Gold at $1204 (-0.45 %), Silver at $17.19 (-0.60 %), WTI Oil at $50.60 (+0.65 %), Brent Oil at $54.55 (+0.85 %)
  • Rates: US 10 year yield at 2.56, UK 10 year yield at 1.22, German 10 year yield at 0.37

News & Data:

  • China CPI (YoY) (Feb): 0.80% (est 1.70%, prev 2.50%)
  • China CPI (MoM) (Feb): -0.20% (est 0.60%, prev 1.00%)
  • China PPI (YoY) (Feb): 7.80% (est 7.70%, prev 6.90%)
  • Japan M2 Money Stock (YoY) (Feb): 4.20% (est 4.20%, prev 4.10%)
  • Japan M3 Money Stock (YoY) (Feb): 3.60% (est 3.60%, prev 3.50%)
  • Japan Labour Cash Earnings (YoY) (Jan): 0.50% (est 0.40%, prev 0.50%)
  • Japan Real Cash Earnings (YoY) (Jan): 0.00% (prev 0.10%)
  • UK RICS House Price Balance (Feb): +24% (est +23%, prev rev +24%)

Markets Update:

The US Dollar is rallying again following stronger than expected ADP employment data yesterday. Expectations for a strong NFP number have increased, and the market is now looking for a number above 190k.

EUR/USD is slowly approaching the 1.05 level. Key support is now seen at 1.0450 and a break below would signal a test of the December low could follow soon. Meanwhile, USD/JPY had a strong bounce off 113.60 support and rallied to 114.75 in yesterday’s NY session. Resistance pre-115 remains solid, but if NFP beats expectations, it will likely test 115.50.

AUD/USD is testing key support around 0.75 and a break below would confirm the top at 0.7740, suggesting a correction to 0.73 could follow.

Oil had a big move in the late NY session. WTI declined from 53 to almost 50 after data from the EIA showed a large increase in oil inventories.

The main event today is the ECB rate decision. The central bank is expected to keep rates unchanged, but the focus will be on Mario Draghi’s press conference and hints whether QE could end sooner than anticipated.

Upcoming Events:

  • 06:45 GMT – Swiss Unemployment Rate
  • 12:45 GMT – ECB Interest Rate Decision
  • 13:30 GMT – ECB Press Conference
  • 13:30 GMT – US Initial Jobless Claims
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