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Here are the latest developments in global markets:

FOREX: Investors were in a sell mode against the pound during early European afternoon as the cloud around the Brexit story was getting larger following May's unexpected rejection of the legal draft Brexit treaty published yesterday. Pound/dollar crawled further down to touch a fresh six-week low at 1.3726 (-0.16%). Euro/dollar also weakened towards six-week lows, inching down to 1.2185 (-0.07%) as hawkish monetary prospects in the US increased the gap between the US-EU short-term government bond yields to the widest in 20 years. Meanwhile, the Eurozone's unemployment rate stood at 8.6% as expected in January (December's unemployment rate was revised slightly downwards to 8.6%) while the bloc's final IHS Markit manufacturing PMI for the month of February retreated by less than expected and remained above the threshold that separates growth from contraction. Euro/pound was flat at 0.8862 (+0.02%) after yesterday's steep rally. The dollar index was in the green for the third consecutive day, trading at 90.72 (+0.12%) near six-week highs, with investors sentiment on the currency remaining positive ahead of the Fed Chair's speech before the US Senate. Dollar/yen was moving sideways at 106.67 (+0.01%) while dollar/loonie was higher at 1.2848 (+0.12%). In antipodean currencies, aussie/dollar was struggling to pare earlier losses following a disappointing CAPEX print in the final quarter of 2017.

STOCKS: European stocks opened sharply lower on Thursday as prospects that the Fed could raise interest rates faster than expected continued to loom in the background, while disappointing earnings releases added further losses to the European equities. The pan-European STOXX 600 and the blue-chip Euro STOXX 50 were down by 1.0% and 0.86% accordingly at 1100 GMT. The German DAX 30 dived by 1.47% with all sectors being in the red and consumer cyclicals losing the most. The French CAC 40 fell by 1.12% after the French supermarket Carrefour cut group's dividends and painted a cautious outlook for its 2018 profits. The Italian FTSE MIB dropped by 0.89% ahead of Sunday's general elections, the Spanish IBEX 35 and the UK's FTSE 100 fell by 1.14% and 0.56% respectively. US stock futures were pointing to a negative open.

COMMODITIES: Oil prices extended losses towards fresh weekly lows as concerns over a rising US production heightened after the EIA oil report showed that US crude oil inventories increased well above expectations in the week ending February 23. In other news, sources stated that Saudi Arabia is likely to cut crude prices for its Asian partners in April after demand for April's cargoes from Asia declined last month. WTI crude and Brent were trading lower at 61.29 (.-0.58%) and 64.32 (-0.63%) per barrel respectively. In precious metals, gold stretched to fresh three-week lows, last seen at $1310.30 per ounce.

Day ahead: Theresa May meets the European Council President Donald Tusk; Powell testifies in front of the Senate

The British Prime Minister, Theresa May is meeting the President of the European Council Donald Tusk today at 1230 GMT according to the Council, a day before she delivers a keynote speech regarding the UK's relations with the bloc. Yesterday, May surprisingly rejected a legal draft of the Brexit treaty handed out by the European Commission, opposing the EU's border proposals on the Irish problem which stated that Northern Ireland would stay a member of the EU customs union if the sides fail to reach an alternative agreement. May is now under severe pressure as she has theoretically dismissed solutions discussed in Brussels and any retaliation from her side could tear down progress in the Brexit story, sending the pound even lower.

In the US, the focus will turn to Jerome Powell once again. Following his hawkish speech before the House Financial Committee on Tuesday, the new Fed Chair is now preparing to testify in front of the Senate Banking Committee today at 1500 GMT. Powell will probably reiterate his optimism on the country's economic conditions, supporting that gradual rate hikes are needed in the future to avoid the economy from overheating. While this is not something new to the markets, any change in his tone perceived as more hawkish or bearish could shake the dollar.

Meanwhile, the US President, Donald Trump, is expected to announce tariffs on steel and aluminum imports later today, risking the country's trade relations and increasing tensions with China, the world's biggest aluminum and steel producer. Canada and Mexico are also exporting metals to the US and any restriction to their activities could deteriorate efforts to negotiate the NAFTA treaty which has been so far hanging in the air.

In terms of data, economic releases will keep investors busy today, with the US releasing a bunch of figures. At 1330 GMT, the Fed's preferred inflation measure, the core personal consumption expenditures index (PCE) will come into view. For the month of January, the index is expected to stand flat at 1.5% y/y and inch up by 0.1 percentage points to 0.3% m/m. Readings on personal consumption and personal spending will also attract attention at the same time, with both indicators seen lower in the aforementioned month.

Initial jobless claims (1330 GMT), ISM manufacturing PMI (1500 GMT) and the Fed's Beige Book which reports on current economic conditions in 12 Federal districts will also attract attention later in the day.

In Canada, current account data for the final quarter of 2017 are due out at 1330 GMT, while the Markit manufacturing PMI for February will be released at 1430 GMT.

As for the speakers, besides Fed Chair Jerome Powell, New York Fed President William Dudley (permanent voter) will also step up to the rostrum, at 1600 GMT. He is considered one of the most influential Fed officials and thus investors will look for any signals as to whether he would entertain the prospect of four rate hikes this year.

Moving into Thursday's U.S trading session, USDJPY traders will likely look to U.S stock markets and the ISM Manufacturing report for the month of February.

The USDJPY pair is likely to fall sharply below the 106.60 level, key technical support is found at the 106.18 and 105.50 levels.

Should price-action on the USDJPY pair hold above the 106.60 level, traders may test the 107.00 and 107.30 resistance levels.

The British pound has continued to extend heavy intraday losses against the greenback on Thursday, with price-action trading as low as 1.3727, during the European trading session. A much stronger U.S dollar and concerns over Brexit negotiations are weighing on the GBPUSD pair, alongside bearish RSI and MACD indicators. Technical sellers also firmly in control of the pair, following a breach of the key 1.3765 earlier today, the next major downside remains the 2017 trading high, located at 1.3657.

The GBPUSD pair is strongly bearish below the 1.3765 level, traders may now test towards the 1.3710 and 1.3657 support levels.

Should GBPUSD price-action move above the 1.3765 level for a sustained period, buyers may test back towards the 1.3800 resistance level.

The CAC index has posted sharp losses in the Thursday session. Currently, the index is at 5,261.50, down 1.12% on the day. On the release front, manufacturing reports were in focus. French and eurozone PMIs continue to point to steady expansion, as stronger global growth has boosted the manufacturing sectors. However, both indicators slowed in February. Eurozone PMI dipped to 58.6, just above the estimate of 58.5 points. French PMI dropped to 55.9, shy of the forecast of 56.1 points. This marked a 6-month low. As well, the eurozone unemployment rate dipped lower to 8.6%, matching the forecast. In the US, Fed chair Jerome Powell testifies before the Senate Banking Committee.

Inflation in eurozone edged lower to 1.2% in February, down from 1.3% in January. This reading met expectations, but underscores that inflation levels remain well below the ECB target of around 2 percent. Economic growth has rebounded, led by a robust German economy. Still, there is plenty of slack in the eurozone economy and the ECB is not under pressure to tighten policy. The Bank will meet on March 8, and no major changes are expected. Policymakers could deliberate the possibility of removing the Bank's easing bias towards increasing bond purchases if needed. A removal of the easing bias would likely be interpreted as a plan to tighten policy and would be bullish for the euro.

It's been a brutal start to 2018 for stock markets, and the CAC has plunged 7.4% so far this year. Global stock markets remain under pressure this week, after a hawkish performance from Federal Reserve Chair Jerome Powell, who testified before a congressional committee on Tuesday. Powell affirmed that the Fed planned to raise rates gradually. Powell sounded optimistic about economic conditions, noting that the US economy was benefiting from the global recovery as well as changes in fiscal policy. Importantly, Powell did not address the question of an acceleration of rate hikes. Currently, the Fed has projected three rate hikes in 2018, with increases widely expected at the March and May meetings. However, with inflation moving higher and the economy continuing to perform well, many analysts expect the Fed to raise rates four or more times this year. Any hints at an increased pace of rate hikes could send the US dollar higher and send European stock markets downwards.

Canada will see the release of Q4 2017 as well as December GDP figures on Friday at 1330 GMT. Quarterly annualized growth figures are projected to show an improvement after Q3's slump in economic activity, while monthly figures are anticipated to show that expansion eased during the last month of the year. Market participants may assign greater weight on the numbers that would otherwise have been the case, given that they will be released a few days before the Bank of Canada next meets to set its monetary policy moving forward.

The annualized pace of quarterly growth during the last quarter of 2017 is expected to stand at 2.0%. This compares to Q3's respective figure of 1.7% that followed Q2's 4.3% – this being the strongest rate of growth since Q2 2014. The slowdown in Q3 came on the back of a considerable decline in exports, as well as due to businesses holding back on investments. The latter was likely attributed to uncertainty over the future of the North American Free Trade Agreement (NAFTA). December's monthly growth figure is projected to stand at 0.1%, down from November's 0.4%

The BoC, the first major central bank to deliver a rate hike so far this year, will be concluding its two-day meeting on monetary policy on March 7. Given that Friday's release will constitute the last growth input before the Bank's meeting, this might increase the significance of the release in investors' minds, with a deviation from forecasts leading to sharper movements than would otherwise have been the case; of course, the extent of the deviation is also a factor that is under consideration.

A data beat is anticipated to be met with long loonie positions and focusing on the Canadian dollar versus its US counterpart, lead to a buildup of short dollar/loonie positions. Market participants could potentially revise their expectations for additional rate hikes by the BoC in sight of strong readings, bringing them sooner in time than previously thought. In this case, dollar/loonie might find support around the 1.28 handle which was congested in the past. Steeper declines would shift the focus to the area around the current level of the 200-day moving average at 1.2686. The range around this point also encapsulates the 1.27 handle that may carry psychological importance and was also congested in the past.

Dollar/loonie has advanced considerably after hitting a five-month low of 1.2246 on January 31, recording a more than two-month high of 1.2854 during Thursday's trading. If growth numbers surprise to the downside, the pair is likely to build on positive momentum, targeting the area around the seven-and-a-half-month high of 1.2918 that was recorded on December 19.

For the record, no change in the BoC's policy rate is expected next Wednesday, with Canadian overnight index swaps currently assigning only a 10% probability for a quarter percentage point interest rate increase, something which would see the policy rate rising to 1.5%.

A major driver for the loonie moving forward is the future of NAFTA negotiations. Those are currently on their seventh round, with no meaningful progress so far recorded. Rising uncertainty on this front has in the past hurt the Canadian currency. Oil prices could also give direction to the currency as Canada is a major exporter of the precious commodity. Those have eased somewhat in February after hitting a three-year high in January. It is noteworthy that the International Energy Agency said on Tuesday that US shale production is set to rapidly increase, with the US overtaking Russia as the world's biggest oil producer by 2019 the latest. Such an outcome does not paint a bullish picture for oil prices moving forward, which in turn could lead to losses for the loonie.

The EURGBP pair has recovered somewhat from its most recent drop lower and found support at 0.87714. It has formed a red supportive trend line with three touches and rallied back into the top half of the range. Support closer to the current price level is found at 0.88477 and the 100 DMA. The 50 DMA is found at 0.88356, with the 200 DMA at 0.88145. Further support is found at the rising red trend line at 0.87850, followed by 0.87574 and 0.87162. Below these levels, there is support at 0.86901 and the red descending channel bottom at 0.86376.

Resistance at the blue trend line is located at 0.88926, with 0.89274 above. The 0.89550 is being strengthened by the channel top, with a break out here targeting 0.89816 and the 0.90000 level. A move to the 0.90316 may see a constructive retest of support which, if successful, would challenge resistance overhead at 0.90891, 0.91433 and 0.92018. The high for 2017 comes in at 0.93071.

AUDUSD

The AUDUSD pair has fallen below the 0.78000 level and, in doing so, has broken a supporting trend line at 0.78100. The drop has created a new lower low for the pair at the 0.77170 level, which the price is holding above for now. Further support can be found at the 0.76950 area and at 0.76534, with the October monthly low at 0.76239. The major low from November comes in at 0.74990.

Resistance above is found at 0.77606 and 0.77771, followed by 0.78025. Above the trend line, the 50-period moving average comes into play at 0.78290, with the 0.78430 and 0.78566 levels between it and the 100-period MA at 0.78951. The 200-period MA is located at 0.78708, with important resistance at 0.78900.

Notes/Observations

US President Trump is set to announce tariffs on steel and aluminum imports (25% and 10% respectively) as early as today

Major European PMI data remained in expansion territory (Beats: Euro Zone, Germany, Swiss, Sweden; Misses: France, Italy, Russia, Norway, Poland, Czech)

Euro Zone Jan unemployment falls to lowest level since 2008

Asia:

China Feb Caixin Manufacturing PMI hits 6-month high (51.6 v 51.3e)

BoJ Gov Kuroda reiterated that BOJ's easing had contributed to growth. Wages and inflation had been somewhat weak despite a solid real economy

BoJ Kataoka: Still 'quite distant' from mulling shift from easy policy, must ease more to achieve price goal quickly

Europe:

German CSU party leader Seehofer: Germany should hold a new election if members of SPD vote against a new coalition

Press reports on EU Brexit draft noted that EU officials were fairly certain the draft Brexit deal would be unacceptable to UK PM May as a large part of their strategy is to be so inflexible it puts so much pressure on the British Govt it will eventually decide to keep the UK as close as possible to the EU

Americas:

US said to plan announcement on Thursday, Mar 1st related to steel and aluminum import

Fed's Kashkari (dove, non-voter): lack of wage growth signaled there is still slack in job market

Economic Data:

(JP) Japan Feb Consumer Confidence: 44.3 v 44.8e

(PE) Peru Feb CPI M/M: 0.3% v 0.3%e; Y/Y: 1.2% v 1.2%e

(JP) Japan Feb Vehicle Sales Y/Y: -4.9% v -5.7% prior

(RU) Russia Feb Manufacturing PMI: 50.2 v 52.0e (19th month of expansion)

(IE) Ireland Feb Manufacturing PMI: 56.2 v 57.6 prior

(CH) Swiss Q4 GDP Q/Q: 0.6% v 0.5%e; Y/Y: 1.9% v 1.7%e

(UK) Feb Nationwide House Price Index M/M: -0.3% v +0.1%e; Y/Y: 2.2% v 2.6%e

(TR) Turkey Feb Manufacturing PMI: 55.6 v 55.7 prior (12th month of expansion)

(SE) Sweden Feb Manufacturing PMI: 59.9 v 58.0e

(TW) Taiwan Jan Export Orders Y/Y: 19.7% v 16.1%e

(ES) Spain Q4 Final GDP Q/Q: 0.7% v 0.7%e; Y/Y: 3.1% v 3.1%e

(NL) Netherlands Feb Manufacturing PMI: 63.5 v 62.5 prior (54th month of expansion)

(NO) Norway Feb Manufacturing PMI: 57.5 v 57.8e

(HU) Hungary Feb Manufacturing PMI: 57.4 v 60.9 prior (27th month of expansion)

(PL) Poland Feb Manufacturing PMI: 53.7 v 54.3e (39th month of expansion)

(ES) Spain Feb Manufacturing PMI: 56.0 v 54.8e (52nd month of expansion)

(CH) Swiss Jan Retail Sales Real Y/Y: -1.4% v +0.7% prior

(CZ) Czech Feb Manufacturing PMI: 58.8 v 59.0e (19th month of expansion)

(CH) Swiss Feb Manufacturing PMI: 65.5 v 64.0e (highest since Apr 2011)

(IT) Italy Feb Manufacturing PMI: 56.8 v 58.0e (18th month of expansion)

(FR) France Feb Final Manufacturing PMI: 55.9 v 56.1e (confirmed its 17th month of expansion)

(DE) Germany Feb Final Manufacturing PMI: 60.6 v 60.3e (confirmed its 39th month of expansion)

(EU) Euro Zone Feb Final Manufacturing PMI: 58.6 v 58.5e (confirmed its 55th month of expansion)

(IT) Italy Jan Preliminary Unemployment Rate: 11.1% v 10.8%e

(GR) Greece Feb Manufacturing PMI: 56.1 v 55.2 prior (9th month of expansion)

(ZA) South Africa Feb Manufacturing PMI: 50.8 v 49.9 prior (1st expansion in 8 months)

(UK) Feb Manufacturing PMI: 55.2 v 55.0e (19th month of expansion but lowest since Jun)

(UK) Jan Net Consumer Credit: £1.4B v £1.4Be; Net Lending: £3.4B v £3.6Be

(UK) Jan Mortgage Approvals: 67.5K v 62.0Ke

(UK) Jan M4 Money Supply M/M: +1.5 v -0.6% prior; Y/Y: 4.3% v 3.8% prior, M4 Ex IOFCs 3M Annualized Y/Y: 5.5 v 4.5% prior

(EU) Euro Zone Jan Unemployment Rate: 8.6% v 8.6%e (lowest reading since Dec 2008)

(DK) Denmark Feb PMI Survey: 69.4 v 68.0 prior

(IT) Italy 2017 GDP Annual Y/Y: 1.5% v 1.5%e, Budget Deficit to GDP Ratio: 1.9% v 2.5% prior

Fixed Income Issuance:

(ES) Spain Debt Agency (Tesoro) sold total €3.89B vs. €3.5-4.5B indicated range in 2021, 2022 and 2028

Sold €1.08B in 0.05% Jan 2021 SPGB; Avg yield: -0.034% v -0.021% prior, Bid-to-cover: 3.14x v 2.57x prior

Sold €1.61B in 0.45% Oct 2022 SPGB; Avg yield: 0.358% v 0.385% prior, Bid-to-cover: 1.88x v 4.62x prior

Sold €1.20B in 5.15% Oct 2028 SPGB bond; Avg Yield 1.502% v 1.691% prior; Bid-to-cover: 1.99x v 1.46x prior

(ES) Spain Debt Agency (Tesoro) sold €480M vs. €250-750M indicated range in 1.0% Nov 2030 Inflation-linked Bonds; Real Yield: 0.306% v 0.479% prior; Bid-to-cover: 2.6x v 1.9x prior

(FR) France Debt Agency (AFT) sold total €7.021B vs. €7.0-8.0B indicated rangein 2026, 2028, 2041 and 2048 Oats

Sold €1.954B in 0.50% May 2026 Oat; Avg Yield: 0.61% v 0.19% prior; Bid-to-cover: 1.78x v 2.82x prior

Sold €2.921B in 0.75% May 2028 Oat; Avg Yield: 0.90% v 0.98% prior; Bid-to-cover: 1.86x v 2.02x prior

Sold €890M in 4.50% Apr 2041 Oat; Avg yield 1.47% v 1.49% prior; Bid-to-cover: 2.26x v 1.95x prior

Sold €1.256B in 2.00% May 2048 Oat; Avg Yield: 1.71% v 1.75% prior, Bid-to-cover: 1.96x v 2.00x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx600 -0.9% at 376.1, FTSE -0.5% at 7195, DAX -1.4% at 12259, CAC-40 -1.1% at 5264 , IBEX-35 -1.0% at 9745, FTSE MIB -0.8% at 22421 , SMI -0.9% at 8828, S&P 500 Futures -0.2%]

Market Focal Points/Key Themes:

European Indices trade lower across the board following another weaker close in Wallstreet overnight, and mostly weaker markets in the Far East.
On the corporate front WPP and Carrefour are two big names trading sharply lower afyer results and cautious outlook, with WPP posting its worst earnings since the financial crisis. Other notable decliners include Adecco, Carpetright; Earnings related upside movers include PSA Group, AB Inbev, Kion Group.
In the M&A space Laird trades over 70% higher after Advent is to acquired the company in a £1B deal, while Burberry trades higher after naming a new Creative Officer.

Looking ahead notable earner include retailer Kohls, as well as QVC Group and TD Bank.

Movers

Consumer Discretionary [Laird [LRD.UK] +74% (To be acquired for 200p/shr, Results), Merlin Entertainment [MERL.UK] +9.2% (Earnings), AB Inbev [ABI.BE] +5.6% (Earnings), Carpetright [CPR.UK] -30% (Trading update), Adecco [ADEN.CH] -8% (Earnings), WPP [WPP.UK] -13% (Earnings, outlook), Zalando [ZAL.DE] -4.2% (Earnings), Carrefour [CA.FR] -7% (Earnings, cautious outlook), Essilor [EI.FR] +1.3% (Earnings), Burberry [BRBY.UK] +3.8% (Names new Chief creative officer)]

Industrials [ PSA Group [PSA.FR} +4.8% (Earnings), Kion [KGX.DE] +5.2% (Earnings)]

Financial [Schroders [SDR.UK] +2.7% (Earnings) ]

Real Estate [Bovis Homes[BVSUK] +1.9% (Earnings)]

Speakers

EU President Tusk: London has confirmed its red lines on Brexit which was not cause for enthusiasm or satisfaction. EU must treat red lines seriously but sure all elements of draft text to be accepted. To ask London if they have better ideas for Ireland. Reiterates stance that friction-less trade outside customs union is impossible

Greece Fin Min Tsakalotos: Hoped to complete the 4th bailout review by Jun 21st

Russia President Putin state of the union address noted that a stable macroeconomic situation opened the door to growth

Indonesia Central Bank Dir Zulverdi stated that was keeping close watch on forex market; intervened when IDR currency (Rupiah) hit 13,800 level in session. IDR currency was now too weak against fundamentals; No reason for it weaken further; believed that price action to rebound once volatility subsides

Ukraine Fin Min Danylyuk: Seek a €1.0B loan program from with EU

China Foreign Ministry spokesperson Hua: Will take measures to safeguard its interests

Libya current oil production said to be at 1.1M bpd

Currencies

USD was holding onto it its recent gains. Focus in FX was on the upcoming US inflation data with PCE deflator and Core on the docket. Dealers noted that risks may be to the USD downside as market expectations seemed to have been building for an upside surprise

EUR/USD probing the lower end of its 2018 range ass it dipped below the 1.22 level. Euro unable to muster any strength from continued improvement on the economic front in Europe. Euro Zone Jan unemployment falls to lowest level since 2008 while Manufacturing PMI data for the region remained at robust levels

GBP/USD at multi-week lows in the lower end of the 1.37 area. PM May will give her Brexit clarity speech on Friday. Dealers noted that EU Brexit draft from Wed felt that EU officials were fairly certain the draft Brexit deal would be unacceptable to UK PM May as a large part of their strategy is to be so inflexible it puts so much pressure on the British Govt it will eventually decide to keep the UK as close as possible to the EU

USD/JPY little changed at 106.70

Fixed Income

Bund Futures trades up 27 ticks at 159.75 with large duration supply ahead from Spain and France. Upside targets 160.25, while a return lower targets the157.75 level.

Gilt futures trade at 122.52 up 35 ticks as Gilts continue to attempt to push higher. Support continues to stand at 120.75 then 120.15, with upside resistance at 122.85 then 123.35.

Tuesday's liquidity report showed Monday's excess liquidity rose to €1.860T from €1.845T prior. Use of the marginal lending facility rose to €90M from €20M prior.

Corporate issuance saw 8 issuers raise $14.3B in the primary market

Looking Ahead

(RO) Romania Feb International Reserves: No est v $37.1B prior

05:30 (HU) Hungary Debt Agency (AKK) to sell Bonds (3-tranches)

05:30 (UK) DMO to sell £2.75B in 0.75% July 2023 Gilts

06:00 (IE) Ireland Feb Live Register Monthly: No est v -3.0K prior, Live Register Level: No est v 238.4K prior

06:00 (ZA) South Africa Jan Electricity Production Y/Y: No est v 1.4% prior; Electricity Consumption Y/Y: No est v 1.0% prior

06:00 (HU) Hungary Central Bank (NBH) holds Interest Rate Swap (IRS) Tender

06:45 (US) Daily Libor Fixing

07:00 (UR) Ukraine Central Bank Rate Decision: Expected to leave Key Rate unchanged at 16.00%

07:00 (BR) Brazil Q4 GDP Q/Q: 0.4%e v 0.1% prior; Y/Y: 2.6%e v 1.4% prior, GDP 4-quarters accumulated: +1.1%e v -0.2% prior

08:00 (RU) Russia Gold and Forex Reserve w/e Feb 23rd: No est v $454.0B prior

08:00 (BR) Brazil Feb Manufacturing PMI: No est v 51.2 prior

08:00 (CZ) Czech Feb Budget Balance (CZK): No est v 26.5B prior

08:05 (UK) Baltic Dry Bulk Index

08:00 (ZA) South Africa Feb Naamsa Vehicle Sales Y/Y: No est v -8.9% prior

08:30 (US) Initial Jobless Claims: 225Ke v 222K prior; Continuing Claims: 1.92Me v 1.875M prior

08:30 (US) Jan Personal Income: 0.3%e v 0.5% prior; Personal Spending: 0.2%e v 0.4% prior, Real Personal Spending (PCE): -0.2%e v +0.3% prior

08:30 (US) Jan PCE Deflator M/M: 0.4%e v 0.1% prior; Y/Y: 1.7%e v 1.7% prior

08:30 (US) Jan PCE Core M/M: 0.3%e v 0.2% prior; Y/Y: 1.5%e v 1.5% prior

08:30 (CA) Canada Q4 Current Account: -$17.5Be v -$19.4B prior

08:30 (CA) Canada Jan MLI Leading Indicator M/M: No est v 0.5% prior

08:30 (US) Weekly USDA Net Export Sales

09:30 (CA) Canada Feb Manufacturing PMI: No est v 55.9 prior

09:45 (US) Feb Final Markit Manufacturing PMI: 55.9e v 55.9 prelim

10:00 (US) Feb ISM Manufacturing: 58.6e v 59.1 prior; Prices Paid: 70.0e v 72.7 prior

10:00 (US) Jan Construction Spending M/M: 0.3%e v 0.7% prior

10:00 (MX) Mexico Jan Total Remittances: $2.2Be v $2.6B prior

10:00 (MX) Mexico Central Bank Economist Survey

10:00 (US) Fed Chair Powell testifies in Senate

10:30 (US) Weekly EIA Natural Gas Inventories

10:30 (MX) Mexico Feb Manufacturing PMI: No est v 52.6 prior

12:00 (IT) Italy Feb New Car Registrations Y/Y: No est v 3.4% prior

13:00 (MX) Mexico Feb IMEF Manufacturing Index: 52.0e v 51.2 prior; IMEF Non-Manufacturing Index: 52.6e v 53.1 prior

(RU) Russia Feb Sovereign Wealth Funds: Wellbeing Fund: No est v $66.3B prior

(IT) Italy Feb Budget Balance: No est v €0.5B prior

(AR) Argentina Feb Government Tax Revenue (ARS): 214.0Be v 262.0B prior

The common European currency has been trading in an ascending channel against the Swiss Franc after it hit the lower boundary of an eight-month dominant channel.

During the past few weeks, the pair has formed a new junior pattern. A breakout is likely to occur through the upper boundary of a triangle within the following trading session.

Technical indicators are in favour of bears to continue their dominance over the currency exchange rate.

The Australian Dollar has been trading in a channel up against the Canadian Dollar since early December 2017. The currency pair bounced off the lower boundary of an ascending channel on December 6 and has since rallied against the Loonie.

The inability for the Aussie to make a new move downwards indicate that the pair might continue to surge. The AUD/CAD has reached a support cluster set by the monthly PP and the weekly PP with the combination of the 100-, and 200-hour SMAs near 0.9919.

If this support cluster holds, the exchange rate could make a U-turn north to test the upper boundary of a junior pattern, where the monthly R2 is located.

WTI oil remains in red on Thursday and extends strong fall of previous two days.

Oil prices came under increased pressure on expectations for Fed’s more aggressive approach to the monetary policy which boosted dollar and strong build in US crude inventories last week, which accelerated pullback from recovery high at $64.22, posted on Monday.

Tuesday’s close below pivotal support at $61.92 (Fibo 38.2% of $58.19/$64.22 rally, reinforced by converged 20/55SMA’s) generated strong bearish signal.

Fresh extension lower today pressures initial support at $61.20 (Fibo 50%) and eyes next pivots at $60.72 (daily cloud base) and $60.49 (Fibo 61.8% of $58.19/$64.22).

Bear received fresh boost from formation of 20/55 SMA bear-cross today, which also capped brief recovery attempts.

Daily MA’s turned to firm bearish setup, but bullishly aligned momentum studies may obstruct bears on approach to daily cloud base.

Bullish scenario requires stronger positive signals on lift above broken Fibo barrier at $61.92 and 10SMA ($62.25) to sideline immediate downside risk, but reversal above daily cloud is needed to neutralize.

Res: 61.92, 62.33, 62.73, 62.92
Sup: 61.20, 60.72, 60.49, 60.00