European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei down 0.10 %, Shanghai Composite gained 0.10 %, Hang Seng and ASX 200 both declined 0.05 %
  • Commodities: Gold at $1203 (-0.05 %), Silver at $16.98 (+0.05 %), WTI Oil at $48.45 (+0.10 %), Brent Oil at $51.40 (+0.10 %)
  • Rates: US 10-year yield at 2.62, UK 10-year yield at 1.25, German 10-year yield at 0.47

News & Data:

  • Australia ANZ Roy Morgan Weekly Consumer Confidence (12/Mar): 113.1 (prev 113.9)
  • Australia NAB Business Conditions (Feb): 9 (prev 16)
  • Australia NAB Business Confidence (Feb): 7 (prev 10)
  • China Industrial Production (YtD) (YoY) (Feb): 6.30% (est 6.20%, prev 6.00%)
  • China Retail Sales (YtD) (YoY) (Feb): 9.50% (est 10.60%, prev 10.90%)
  • Sterling slips as Brexit talks get green light, stocks advance before Fed – RTRS
  • Wall Street drifts with eyes on Fed; Intel drops – RTRS
  • Dollar nudges up on U.S. yields, euro retreats from 1-month high – RTRS

Markets Update:

The markets are relatively quiet as traders are waiting for the Federal Reserve rate decision tomorrow. Most of the Asian stock markets are almost unchanged on the day. In the FX market, the Dollar is slightly stronger, but all major pairs consolidated in tight ranges overnight.

The market has almost fully priced in a rate hike by the Fed tomorrow, and it is unlikely that the central bank will disappoint. However, the question is whether the Dollar can continue to appreciate much further. A rate hike alone is unlikely to support the currency much, as it is already expected. Much will depend on the FOMC statement and the comments by Fed Chair Yellen.

EUR/USD traded in 1.0645-60 range in Asia. The pair briefly broke above 1.07 yesterday, but quickly reversed those gains. A major breakout seems unlikely ahead of the FOMC. USD/JPY has been bid again, although resistance above 115 has proved to be heavy. Important support now lies at 114 and 113.60.

Upcoming Events:

  • 07:00 GMT – German CPI
  • 10:00 GMT – German ZEW Economic Sentiment
  • 10:00 GMT – Euro Zone Industrial Production
  • 10:00 GMT – Euro Zone ZEW Economic Sentiment
  • 12:30 GMT – US PPI
  • 21:45 GMT – New Zealand Current Account
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