Sample Category Title

Notes/Observations

• latest economic data from China offered some reassurance to investors concerned about global growth outlook
• Risk appetite aided as geopolitical concerns remained in the background
• Germany Jan Retail Sales and Feb Unemployment data beat expectations
• Major European PMI Manufacturing data was generally upbeat (Beats: Euro Zone, France, Italy, Swiss, Sweden; Misses: Spain, Poland ; in-line: Germany, UK, Czech, Norway, )

Asia:

• Japan Jan Jobless Rate: 2.5% v 2.4%e
• South Korea Feb Trade Balance: $3.1B v $3.3Be ; Exports registered its largest decline in ~3 years (Y/Y: -11.1% v -9.5%e)
• China Feb Caixin PMI Manufacturing registered its 3rd consecutive contraction but handily beat expectations (49.9 v 48.5e); data reassured markets concerned about global growth outlook
• US officials said to be preparing a final trade deal that President Trump and his Chinese counterpart Xi Jinping could sign in weeks. Debate continued in Washington over whether to push Beijing for more concessions. US said to be eyeing a summit between the two presidents as soon as mid-March but planning has been complicated by President Xi's need to lead China's annual National People's Congress in early March

Europe:

• UK Labour Party (opposition) could let PM May's Brexit deal pass in return for second referendum in a compromise plan. Proposal would make clear that parliament "withholds support" until it has been put to a public vote
• Eurogroup chief Centeno: Process to reform Euro Zone to face future crises is underway; strengthening the euro is the best response to uncertainty

Americas:

• Fed Chair Powell reiterated that thes FOMC would be 'patient' as it determined future rate moves
• Fed's Harker (hawk, non-voter) saw one hike in 2019 and one next year as appropriate; potential risks tilted very slightly downside Macro

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.53% at 374.98, FTSE +0.57% at 7,115.25, DAX +1.03% at 11,634.02, CAC-40 +0.73% at 5,278.76, IBEX-35 +0.59% at 9,332.49, FTSE MIB +0.57% at 20,774.50, SMI +0.51% at 9,433.30, S&P 500 Futures +0.58%]
• Market Focal Points/Key Themes: European Indices trade higher across the board tracking gains in Asia overnight and higher US futures. With positive data out of China providing the positive momentum, with the Shanghai index up almost 2%. On the corporate front, earnings continue to take center stage with UK advertising name WPP trading sharply higher after inline results after client losses seen in the year. Robert Walters also gains on earnings with Rheinmetall, Momcler, Ferrovial and Viscofan among other names higher on earnings. Man Group declines around 2% after a fall in AUM; Bookmaker William Hill reverses earlier losses after a contraction in profits while Rightmove declines on earnings and the stepping down of its Chairman in 2020. Another notable decliners include Bekaert, Coats and Revolution Bars following earnings. In other news Sixt trades over 5% higher on the launch of its car sharing app; Pantheon Resources trades sharply lower following its Winx-1 exploration well drilling update. Looking ahead notable earners include Footlooker, Dentsply Sirona and Tribune Media among others.

Equities

• Consumer discretionary: WPP [WPP.UK] +7% (earnings), Moncler [MONC.IT] +11% (earnings), Robert Walters [RWA.UK] +11% (earnings), William Hill [WH.UK] -0.5% (earnings), Bonduelle [BON.FR] -2% (earnings), Bureau Veritas [BVI.FR] +3% (analyst action)
• Materials: Rheinmetall [RHM.DE] +7.5% (earnings)
• Financials: Man Group [EMG.UK] -4.5% (earnings), London Stock Exchange [LSE.UK] +3.5% (earnings)
• Healthcare: Orphazyme [ORPHA.DK] -7.5% (earnings)
• Industrials: Faurecia [EO.FR] +4% (to acquire Clarine in Japan)
• Technology: Serviceware [SJJ.DE] +8.5% (earnings), Next Biometrics [NEXT.NO] -5% (offering)

Speakers

• Former UK Brexit Min Raab stated that the substance of Brexit deal needed to be changed; UK must be able to exit the backstop. Believed that a no-deal outcome would be preferable to an extension of Article 50
• Sweden Central Bank (Riksbank) Dep Gov Skingsley term extended for another six years (Until May 2025)
• Former PBoC advisor Yu Yongding: China must reject US demands to keep the CNY currency (Yuan) stable as part of a trade agreement but could commit to maintain an artificially low level

Currencies/Fixed Income

• USD/JPY was approaching the 112 level for 10-week highs as the latest economic data from China offered some reassurance to investors concerned about global growth outlook. JPY selling also aided as risk appetite was aided as geopolitical concerns (India/Pakistan; Korean Peninsula) remained in the background. The weaker yen also boosted as the yield on 10-year US Treasury rose to a 3-week high of 2.72%.
• EUR/USD was slightly lower at 1.1360 area as the European data saw a mixed bag in the session. Employment data continued to show healthy trend buts Euro Zone Feb Flash CPI data was mixed as headline improved from month-ago level but core rate remained stubborn.

Economic Data

• (IN) India Feb PMI Manufacturing: 54.3 v 53.9 prior (18th month of expansion and highest since Dec 2017)
• (IE) Ireland Feb Manufacturing PMI: 54.0 v 52.6 prior (69th month of expansion)
• (RU) Russia Feb PMI Manufacturing: 50.1 v 50.9 prior (5th month of expansion)
• (DE) Germany Jan Retail Sales M/M: 3.3% v 2.0%e; Y/Y: 2.6% v 1.2%e
• (TR) Turkey Feb PMI Manufacturing: 46.4 v 44.2 prior (11th straight contraction)
• (SE) Sweden Feb PMI Manufacturing: 52.5 v 51.4e
• (TH) Thailand Feb Business Sentiment Index: 49.9 v 50.0 prior
• (CH) Swiss Jan Real Retail Sales Y/Y: -0.4% v +0.4%e
• (FR) France Jan YTD Budget Balance: -€17.3B v -€76.1B prior
• (CN) Weekly Shanghai copper inventories (SHFE): 227.1Ke v 217.8K tons prior
• (CZ) Czech Q4 Preliminary GDP (2nd reading) Q/Q: 0.9% v 1.0% advance; Y/Y: 2.8%e v 2.9% advance
• (NL) Netherlands Feb Manufacturing PMI: 52.7 v 55.1 prior (66th month of expansion but lowest since Jun 2016)
• (NO) Norway PMI Manufacturing: 56.3 v 56.3e (8th month of expansion)
• (HU) Hungary Feb Manufacturing PMI: 55.7 v 54.7 prior (39th month of expansion)
• (PL) Poland Feb PMI Manufacturing: 47.6 v 48.2e (4th straight contraction)
• (HU) Hungary Q4 Final GDP Q/Q: 1.0% v 1.1%e Y/Y: 5.1% v 5.0%e
• (AT) Austria Q4 Final GDP Q/Q: 0.3% v 0.2% prior; Y/Y: 2.4% v 2.3% prior
• (AT) Austria PPI M/M: +0.1% v -0.7% prior; Y/Y: 1.6% v 1.9% prior
• (RU) Russia Narrow Money Supply w/e Feb 22nd (RUB): T v 10.30T prior
• (ES) Spain Feb Manufacturing PMI: 49.9 v 51.7e (1st contraction in over 5 years)
• (CZ) Czech Republic Feb Manufacturing PMI: 48.6 v 48.6e (3rd straight contraction and lowest since Jan 2013)
• (CH) Swiss Feb PMI Manufacturing: 55.4 V 53.5e
• (IT) Italy Feb Manufacturing PMI: 47.7 v 47.2e (5th straight contraction and lowest since May 2013)
• (FR) France Feb Final Manufacturing PMI: 51.5 v 51.4e (confirmed 2nd straight expansion)
• (DE) Germany Feb Final Manufacturing PMI: 47.6 v 47.6e (confirmed 2nd straight contraction and lowest since Dec 2012)
• (DE) Germany Feb Unemployment Change: -21K v -5Ke; Unemployment Claims Rate: 5.0% v 5.0%e
• (EU) Euro Zone Feb Final Manufacturing PMI: 49.3 v 49.2e (confirmed 1st contraction in 68 months and lowest since Jun 2013)
• (IT) Italy Jan Preliminary Unemployment Rate: 10.5% v 10.4%e
• (GR) Greece Feb Manufacturing PMI: 54.2 v 53.7 prior (21st month of expansion)
• (ZA) South Africa Feb Manufacturing PMI: 46.2 v 49.5e (2nd straight contraction)
• (IS) Iceland Q4 GDP Q/Q: 2.7% v 0.0% prior; Y/Y: 5.2% v 2.6% prior
• (NO) Norway Feb Unemployment Rate: 2.5% v 2.5%e
• (UK) Feb PMI Manufacturing: 52.0 v 52.0e (31st month of expansion)
• (UK) Jan Net Consumer Credit: £1.1B v £0.8Be; Net Lending: £3.7B v £3.9Be
• (UK) Jan Mortgage Approvals: 66.8K v 63.4Ke
• (UK) Jan M4 Money Supply M/M: 0.2% v 0.5% prior; Y/Y: 0.5% v 2.0% prior; M4 Ex IOFCs 3M Annualized: 2.4% v 4.3% prior
• (EU) Euro Zone Feb Advance CPI Estimate: 1.5% v 1.5%e; CPI Core Y/Y: 1.0% v 1.1%e
• (EU) Euro Zone Jan Unemployment Rate: 7.8% v 7.9%e (lowest level since Dec 2008)
• (IT) Italy 2018 Annual GDP Y/Y: 0.9% v 0.8%e; Budget Deficit to GDP: 2.1% v 1.9%e
• (DK) Denmark Feb PMI Survey: 61.6 v 50.0 prior
• (BE) Belgium Jan Unemployment Rate: 5.6% v 5.5% prior

Fixed Income Issuance

• (IN) India sold total INR120B vs. INR120B indicated in 2021, 2027, 2032, 2035 and 2046 bonds
• (ZA) South Africa sold total ZAR650M vs. ZAR650M indicated in I/ L 2029, 2038 and 2050 bonds

Looking Ahead

• (ZA) South Africa Feb Naamsa Vehicle Sales Y/Y: % v -7.4% prior
• (RU) Russia Feb Sovereign Wealth Funds: Wellbeing Fund: No est v $59.1B prior
• (IT) Italy Feb Budget Balance: No est v €1.4B prior
• (RO) Romania Feb International Reserves: No est v $35.8B prior
• (US) Monthly US Total Vehicle Sales data from major auto makers
• (AR) Argentina Feb Government Tax Revenue (ARS) No est v 363.9B prior
• (MX) Mexico Jan YTD Budget Balance (MXN): No est v -495.0B prior
• 06:00 (PT) Portugal Jan Industrial Production M/M: No est v 1.1% prior; Y/Y: No est v -0.3% prior
• 06:00 (PT) Portugal Jan Retail Sales M/M: No est v 0.6% prior; Y/Y: No est v 4.2% prior
• 06:00 (UK) DMO to sell €6.0B in 1-month, 3-month and 6-month bills (£2.0B, £2.0B and £2.0 respectively)
• 06:30 (IN) India Weekly Forex Reserves w/e Feb 22nd: No est v $398.3B prior
• 06:45 (US) Daily Libor Fixing
• 08:00 (CZ) Czech Feb Budget Balance (CZK): No est v 8.8B prior
• 08:00 (BR) Brazil Feb PMI Manufacturing: No est v 52.7 prior
• 08:00 (UK) Baltic Dry Bulk Index
• 08:00 (IN) India announces upcoming bill issuance (held on Wed)
• 08:00 (ES) Spain Debt Agency (Tesoro) announces upcoming issuance
• 08:30 (US) Jan Personal Income: 0.3%e v 0.2% prior; Personal Spending: -0.2%e v +0.4% prior; Real Personal Spending (PCE): -0.3%e v +0.3% prior
• 08:30 (US) Jan PCE Deflator M/M: 0.0%e v 0.1% prior; Y/Y: 1.7%e v 1.8% prior
• 08:30 (US) Jan PCE Core M/M: 0.2%e v 0.1% prior; Y/Y: 1.9%e v 1.9% prior
• 08:30 (CA) Canada Dec GDP M/M: 0.0%e v -0.1% prior; Y/Y: 1.4%e v 1.7% prior; Quarterly GDP Annualized: 1.0%e v 2.0% prior
• 08:30 (CA) Canada Jan MLI Leading Indicator M/M: No est v -0.3% prior
• 09:30 (CA) Canada Feb Manufacturing PMI: No est v 53.0 prior
• 09:45 (US) Feb Final Markit Manufacturing PMI: 53.7e v 53.7 prelim
• 10:00 (US) Feb ISM Manufacturing: 55.7e v 56.6 prior; Prices Paid: 51.8e v 49.6 prior
• 10:00 (US) Feb Final University of Michigan Confidence: 95.9e v 95.5 prelim
• 10:00 (CO) Colombia Feb PMI Manufacturing: No est v 48.5 prior
• 10:00 (MX) Mexico Jan Total Remittances: $2.5Be v $2.9B prior
• 10:00 (MX) Mexico Central Bank Economist Survey
• 10:30 (MX) Mexico Feb PMI Manufacturing: No est v 50.9 prior
• 11:00 (EU) Potential sovereign ratings after European close (Moody's on Greece ) In Feb 2018 Moody's raised Greece sovereign rating two notches to B3)
• 12:00 (IT) Italy Feb New Car Registrations Y/Y: No est v -7.6% prior
• 12:50 (US) Fed's Bostic (dove, non-voter) remarks at Luncheon at Economic Policy Conference
• 13:00 (US) Weekly Baker Hughes Rig Count data
• 13:00 (BR) Brazil Feb Trade Balance:$3.0Be v $2.2B prior
• 13:00 (MX) Mexico Feb IMEF Manufacturing Index: 50.0e v 49.8 prior; Non-Manufacturing Index: 50.4e v 50.6 prior
• 13:15 (US) Fed's Bostic (dove, non-voter)

The New Zealand Dollar edged lower against the US Dollar on Thursday. The currency pair breached a support cluster formed by the combination of the monthly and weekly pivot points at 0.6834.

Currently, the exchange rate is testing a resistance level formed by the weekly PP at 0.6823. If this resistance line holds, a decline towards a support level set by the monthly S1 at 0.6775 could be expected within this session.

Although, if the NZD/USD pair passes the 0.6824 mark, the next target for bullish traders will be near the 100-hour simple moving average at 0.6861

Upside risks dominated the common European currency against the against the Japanese Yen on Thursday. The exchange rate rose by about 100 base points during Thursday's trading session.

The currency pair is currently trading near a resistance level formed by the monthly R3 at 127.25. If this resistance line holds, a pullback towards the 126.60 mark could be expected within this session.

On the other hand, if the currency exchange rate passes the monthly R3 at 127.25, the next target for bullish traders will be a December 2018 high level at 129.00.

Downside risks prevailed in the market on Thursday, thus sending the Australian Dollar to decline by 74 base points against the US Dollar. The currency pair breached the lower boundary of a medium-term ascending channel at 0.7098 during yesterday's session.

Given that a breakout had occurred, it is likely that the currency exchange rate will continue its decline within this session. The downside target would be near the monthly S1 at 0.7064.

However, the AUD/USD exchange rate could reverse from the current price level at 0.7098 and aim for the 50-hour simple moving average at 0.7129.

During the last 24hrs, the US Dollar has depreciated about 72 base points against the Canadian Dollar. The currency pair breached both the 50– and 100-hour simple moving averages at the end of yesterday's trading session.

Everything being equal, it is likely that the USD/CAD exchange rate will continue its decline within this session. The potential downside target will be near a swing low at 1.3120.

However, it is important to note that the US macroeconomic data releases scheduled at 12:30 GMT could influence the currency exchange rate movement during the following trading session.

Cable holds in red for the second day and tested initial support at 1.3230 (rising 5SMA) on Friday.

Profit-taking after strong rally this week could push sterling lower, as slow stochastic reverses from overbought territory and supports scenario.

Pound was boosted strongly by reduced fears about no-deal Brexit last week, but the optimism starts to fade, as there are no further changes in Brexit process, except that UK's exit from the Union could be delayed, but this seems to be already priced in.

Corrective action looks more likely after bulls failed in penetration of thick falling weekly cloud, with Friday's close below cloud, to generate further bearish signal.

However, the pair still holds strong bullish momentum that could limit dips, as there are a plenty of space towards key support at 1.3129 (rising 10SMA / Fibo 38.2% of 1.2772/1.3349 rally), violation of which is needed to generate reversal signal.

Res: 1.3266, 1.3319, 1.3349, 1.3386
Sup: 1.3230, 1.3213, 1.3160, 1.3129

The GBP/USD is in a retracement mode after getting within the 1.3350 zone. We might see a bounce from the POC zone if the price makes a bullish reversal candle pattern formation.

The POC zone 1.3225-1.3350 is a potential bounce spot for the cable. We can see a strong uptrend that is supported by the ascending trend line. However, we cannot say that the retracement might end within the POC zone. But if it does then watch for a reversal candle formation (marubozu, piercing line, hammer, engulfer, pinbar) that might spike the price above 1.3260 towards 1.3305 and 1.3328. Today is Friday so 2-way price action might be possible due to profit taking.

However, the price is still bullish and bought on dips so watch for the potential spike off the POC zone. A close below 1.3315 might negate this bullish scenario.

UK PMI manufacturing dropped to 52.0 in February, down from 52.6 and matched expectation. Markit noted that stocks on inputs and finished goods rose sharpy. However, rate of job losses was at six-year high as optimism hits series low.

Rob Dobson, Director at IHS Markit, which compiles the survey:

"With Brexit day looming, UK manufacturers continued to implement plans to mitigate potential disruptions. Stockpiling of both inputs and finished products remained the order of the day, with growth in the former hitting a fresh record high.

"The current elevated degree of uncertainty is also having knock-on effects for business confidence and employment, with optimism at its lowest ebb in the survey's history and the rate of job losses accelerating to a six-year high.

"Official data confirm that manufacturing is already in recession, and the February PMI offers little evidence that any short-lived boost to output from stock-building is sufficient to claw the sector back into growth territory.

"Apart from the uncertain outlook, manufacturers also face a darkening backdrop of a domestic market slowdown and weakening inflows of new export business, as global growth decelerates and trade tensions bite. Manufacturing and the broader UK economy therefore face a difficult 2019, with the slowdown being exacerbated later in the year as inventory positions are unwound and Brexit-related headwinds likely to linger."

Full release here.

Also from UK, mortgage approvals rose to 67k in January. M4 money supply rose 0.2% mom in January.

GBPAUD recorded three strong bullish days this week to fully recover towards the 1.8724 top. A crucial battle is currently taking place around this area, as any decisive step higher would reactivate the 2 ½ -year old upward pattern, turning the pair bullish in the bigger picture.

Under a technical view, though, chances for another winning cycle seem to be decreasing as the RSI is turning lower after touching the 70 overbought mark, a warning that the rally is overstretched. The MACD keeps improving above its red signal line, but it is still in question whether it can surpass its previous high. Note that the pair is also trading along the upper Bollinger band. Yet, as long as the RSI and the MACD hold in bullish zone, any downfalls could prove short-lived.

In case the recent bullish action proves overdone, the price could drift downwards to meet the previous support area of 1.8560, while further down, the way would open towards the 1.8470-1.8360 zone, which the market found hard to clear in the past. Another leg lower could retest the 20-day moving average (MA) currently at 1.8250, though the 50-day MA at 1.8100 could be a bigger challenge.

If positive momentum strengthens, a significant rise above the 1.8724 top could target the 1.8800 psychological mark, while even higher the price could take a break within the 1.8900-1.9000 area.

The Euro stands at the back foot in early Friday’s trading and eased to session low at 1.1353, on probe below 30SMA support at 1.1361, which held the action in past two days.

Stronger dollar on upbeat US GDP data increased pressure on single currency, as recovery rally stalled on Thursday (short-lived spike to 1.1419).

Formation of bull trap pattern on daily chart weighs and could result in further weakness.

Sustained break below 30SMA would generate initial bearish signal, which would require confirmation on close below 1.1350 (rising 10SMA / Fibo 38.2% of 1.1234/1.1419 upleg).

Daily studies are mixed and lack clearer direction signal as bullish momentum continues to strengthen, stochastic is heading south and MA are in mixed setup that could result in prolonged sideways mode while the pair holds above pivotal supports provided by 30 and 10SMA’s.

Better than expected German labor and retail sales data, released earlier today, provided little support to Euro, as traders eye EU CPI data for fresh signals.

Res: 1.1375, 1.1387, 1.1407, 1.1419
Sup: 1.1350, 1.1340, 1.1327, 1.1316