Sample Category Title

GOLD (in USD) Strong weakness.

Gold is showing no signs of reversing bearish course after recent pullbacks. The positive midterm trend has been broken. It is unlikely that the metal will test again 1263 (27/02/2017 high). Expected to reach strong support at 1177 (11/01/2017 low).

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

SILVER (in USD) Collapsing.

Silver's selling pressures are growing since the pair exited uptrend channel. Hourly support at 17.75 (14/02/2017 low) has been broken, Next one lies at 16.63 (27/01/2017 low). Expected to see continued bearish pressures below 17.00.

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

Crude Oil (in USD) Continued weakness.

Crude oil's bearish pressures continues. The commodity has been unable to mount a serious challenge to 55.24 (03/01/2017 high) resistance. Strong support given at 49.61 (08/12/2016) has been broken. Expected to see deeper selling pressures.

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 24.82 (13/11/2002) while resistance can now be found at 55.24 (03/01/2017 high).

News and Events:

Oil caps worst week since November

The West Texas Intermediate is about to post its largest weekly decline since the first week of November when it dropped 9.50% to below $45 a barrel. This week, the WTI slid almost 7% as it dipped below $50 a barrel for the first time since the November OPEC 'supply cut' deal. The move was initiated on Wednesday after the EIA reported that US stockpiles had surged by 8.2 million barrels in the previous week, more than four times what the market was expecting, pushing US inventories (excluding strategic reserve) to an all-time high of 528 million barrels.

The market has begun to consider the possibility that OPEC and certain non-OPEC members such as Russia, who initially agreed to curb production back in November, may now be backtracking on their promise. Indeed, the US shale industry was the primary beneficiary of this 'supply cut' as shown by the massive rise in rig count (+38% or 168 new wells since November last year). In this fight, the US has been continuously increasing their market share on the back of those who agreed to cut production.

On the top of this, the market positioning on the NYMEX had reached extreme levels recently as the total net position reached 387k contracts. Even back in June 2014, the market wasn’t that bullish (348k net long). Therefore, we believe that there is room for further downside move in crude oil prices. Investors were betting that the recovery in prices would be proven sustainable as the main oil producers seemed to have found an agreement. We would not be surprised to see OPEC and Russia back-pedalling on the 'supply cut' deal as it is clearly to the advantage of the US right now. We expect further weakness of crude prices as traders unwind their long positions, with $45 a barrel as the next target.

Tread cautiously in EM

Markets are currently repricing in three Fed rate hikes (four in 2018), which is forcing the US yield curve higher. The complacency in the market to price in faster rate hikes looks to have diminished. While the USD has gained versus the G10 (especially commodity-linked currencies NOK and NZD), widening interest rate differentials and softer commodity prices have not supported broad-based EM selling. In fact, EM currencies have widely improved against the dollar. Part of the rationale of the lagging behavior is due to signs of reflation, which should push policymakers to manage accommodating policy correctly. In addition, the delay in the US trade policy has provided EM with a bit of macro-head winds respite. Yet, with 8 trillion sitting in negative yielding sovereign paper, the probability that higher US rates will attract flows driving USD higher has significantly increased. Further, EM volumes seem to be completely mispricing the risk relating to Fed tightening and global protectionism. As markets price in a quicker rate of Fed hikes, low yielding EM currencies, already behind the curve, will come under selling pressure.

NFP report irrelevant as Fed hike is a done deal

After the massive ADPs on Wednesday, which came in slightly below 300k, financial markets are now awaiting confirmation from the NFPs, which are expected to come in for February lower than the January print, 200k vs 227k. From our standpoint, this read is irrelevant as it will have little impact on the US central bank’s decision concerning the raising of rates.

Despite the occasional spectacular miss from the ADP, we would not expect a low NFP read. A weak read could drive the dollar lower, knowing that there is room for disappointment as a rate hike is now priced in by the financial markets.

Moreover, there is the increasing probability of rate hikes at the next meetings. We reaffirm our belief that the Fed will not raise rates above 2% for the next two years as it could trigger a much deeper crisis.

The dollar should remain strong and while today’s NFPs are likely to be a non-event, one should not forget Trump’s stance that the dollar is too high. For the time being, European uncertainties are definitely sending the greenback higher.

Today's Key Issues (time in GMT):

• Feb CPI MoM, exp 0,90%, last 0,00% DKK / 08:00
• Feb CPI YoY, exp 1,10%, last 0,90% DKK / 08:00
• Feb CPI EU Harmonized MoM, exp 0,80%, last -0,10% DKK / 08:00
• Feb CPI EU Harmonized YoY, exp 1,00%, last 0,70% DKK / 08:00
• mars.03 Money Supply Narrow Def, last 8.85t RUB / 08:00
• Jan Retail Sales YoY, last 0,90% EUR / 08:00
• Jan Retail Sales SA YoY, exp 2,50%, last 2,90%, rev 2,10% EUR / 08:00
• mars.07 FIPE CPI - Weekly, exp -0,03%, last -0,05% BRL / 08:00
• 4Q Unemployment Rate Quarterly, exp 11,70%, last 11,60% EUR / 09:00
• Jan Industrial Production MoM, exp -0,50%, last 1,10%, rev 0,90% GBP / 09:30
• Jan Industrial Production YoY, exp 3,20%, last 4,30% GBP / 09:30
• Jan Manufacturing Production MoM, exp -0,70%, last 2,10%, rev 2,20% GBP / 09:30
• Jan Manufacturing Production YoY, exp 2,90%, last 4,00%, rev 4,20% GBP / 09:30
• Jan Construction Output SA MoM, exp -0,20%, last 1,80% GBP / 09:30
• Jan Construction Output SA YoY, exp 0,30%, last 0,60%, rev 2,60% GBP / 09:30
• Jan Visible Trade Balance GBP/Mn, exp -£11100, last -£10890, rev -£10915 GBP / 09:30
• Jan Trade Balance Non EU GBP/Mn, exp -£2425, last -£2114, rev -£2527 GBP / 09:30
• Jan Trade Balance, exp -£3100, last -£3304, rev -£2026 GBP / 09:30
• Feb BoE/TNS Inflation Next 12 Mths, last 2,80% GBP / 09:30
• Feb IBGE Inflation IPCA MoM, exp 0,43%, last 0,38% BRL / 12:00
• Feb IBGE Inflation IPCA YoY, exp 4,86%, last 5,35% BRL / 12:00
• Jan Industrial Production YoY, exp 0,50%, last -0,40% INR / 12:00
• Feb Unemployment Rate, exp 6,80%, last 6,80% CAD / 13:30
• Feb Change in Nonfarm Payrolls, exp 200k, last 227k USD / 13:30
• Feb Net Change in Employment, exp -5.0k, last 48.3k CAD / 13:30
• Feb Two-Month Payroll Net Revision USD / 13:30
• Feb Full Time Employment Change, last 15,8 CAD / 13:30
• Feb Change in Private Payrolls, exp 215k, last 237k USD / 13:30
• Feb Part Time Employment Change, last 32,4 CAD / 13:30
• Feb Change in Manufact. Payrolls, exp 10k, last 5k USD / 13:30
• Feb Participation Rate, last 65,9 CAD / 13:30
• Feb Unemployment Rate, exp 4,70%, last 4,80% USD / 13:30
• Feb Average Hourly Earnings MoM, exp 0,30%, last 0,10% USD / 13:30
• Feb Average Hourly Earnings YoY, exp 2,80%, last 2,50% USD / 13:30
• Feb Average Weekly Hours All Employees, exp 34,4, last 34,4 USD / 13:30
• Feb Labor Force Participation Rate, last 62,90% USD / 13:30
• Feb Underemployment Rate, last 9,40% USD / 13:30
• Feb NIESR GDP Estimate, exp 0,60%, last 0,70% GBP / 15:00
• Feb Monthly Budget Statement, exp -$190.0b, last $51.3b USD / 19:00
• Feb Foreign Direct Investment YoY CNY, exp -4,20%, last -9,20% CNY / 23:00

The Risk Today:

EUR/USD has consolidated higher but the demand seems to weaken. Hourly resistance is given at 1.0679 (16/02/2017 high) while hourly support at 1.0493 (22/02/2017 low). The technical structure suggests deeper consolidation towards 1.0500. In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity.

GBP/USD continues to edge lower since the pair has broken support given at 1.2254 (19/01/2017 low). The road is wide-open for further decline. Hourly resistance is now given at 1.2214 (09/03/2017 high). The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY is pushing higher towards key resistance given at 115.62 (19/01/2016 high). Hourly support can be found at 113.56 (06/03/2017 low). We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

USD/CHF continues to improves. Hourly resistance is implied by upper bound of the uptrend channel. Key resistance is given at a distance at 1.0344 (15/12/2016 high). Expected to see further strengthening. In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

'There was a sentence that has been removed from my introductory statement that used to say 'if warranted to achieve its objective, the Governing Council will act using all the instruments available within its mandate'. - Mario Draghi, ECB

As markets expected, the European Central Bank left its monetary policy unchanged at its meeting on Thursday, saying it would continue monitoring inflation. Regarding non-standard monetary policy measures, the Governing Council confirmed that the monthly asset purchases of 80 billion euros would be reduced to 60 billion euros starting from next month. Policymakers also voted to keep the main refinancing rate at 0% and the overnight deposit rate at -0.4%. The ECB said that its key interest rates would likely remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. After two years of the ECB's QE programme inflation accelerated well above the Bank's initial goal, signaling that the monetary stimulus should be reduced. However, the ECB President Mario Draghi pointed out that the recent acceleration in prices was mainly driven by a rebound in energy prices. Draghi also highlighted that risks related to the upcoming European elections had the potential of slowing the economic recovery in the region. Nevertheless, the ECB raised its 2017 inflation projection to 1.7% from 1.3% in December, adding that the expected pick-up would probably be temporary. Meanwhile, GDP growth projections were revised up to 1.8% from 1.7% in December.

'There is no evidence of a pickup in involuntary employment separations. We view this as evidence of a tight labor market.' - John Ryding, RDQ Economics

The number of Americans filing for unemployment benefits rose more than expected last week, official figures showed on Thursday. The US Department of Labour reported initial jobless claims rose to 243,000 in the week ended March 3, up from the preceding week's record low of 223,000. Meanwhile, market analysts expected claims would climb to 239,000 claims during the reported week. Last week marked the 105th consecutive week of claims below the benchmark 300,000 level. Analysts state that the US economy is at or near full employment, with companies struggling to find qualified candidates for job openings. The strong performance of the labour market and rising inflation would probably force the Federal Reserve to raise rates at its next meeting on March 15. The Labour Department said there were no special factors influencing claims data. The four-week moving average of initial claims, considered a better measure of the labour market trends, advanced 2,250 to 236,500 last week. Thursday's report also showed continuous jobless claims dropped 6,000 to 2.06 million in the week ending February 25, while their four-week moving average fell 5,250 to 2.07 million. The US Dollar traded little changed after the release, as investors awaited Friday's NFP report.

EUR/USD has posted slight gains in the Friday session. Currently, the pair is trading just above the 1.06 line. On the release front, German numbers were mixed. The trade surplus was almost unchanged at EUR 18.5 billion, short of the estimate of 19.2 billion. There was better news on the inflation front, as German WPI posted a gain of 0.5%, beating the forecast of 0.3%. In the US, employment numbers will be on center stage, with the release of three key indicators – Nonfarm Payrolls, Average Hourly Earnings and the unemployment rate. The Nonfarm payrolls report is expected to drop to 200 thousand, while wages are forecast to improve to 0.3%. Traders should be prepared for some volatility in the currency markets during the North American session.

As expected, the ECB held course and maintained interest rates at a flat 0.00% on Thursday. ECB President Mark Draghi focused on nuances, noting that the central bank removed one phrase from its standard introductory statement – 'using all the instruments available within its mandate'. Draghi added that the removal of this phrase means that the ECB 'no longer has a sense of urgency in taking further actions …. prompted by the risk of deflation'. With growth and inflation showing signs of improvement, the ECB has been under pressure to tighten policy and reduce its asset-purchase program. Germany, in particular, is unhappy with the ECB’s ultra-loose policy and on Thursday, German Finance Minister Wolfgang Schaeuble bluntly stated that he wanted to see a 'timely start to the exit' from the ECB’s asset-purchase scheme. For his part, Mario Draghi must balance the improved economy with upcoming elections in France, Germany and the Netherlands. Euro-skeptics are a strong force throughout Europe and Draghi is reluctant to make any moves which could be seized on by politicians. The ECB’s asset-purchase program is slated to end in December, but economic and political circumstances could trigger an earlier end to the program.

The Federal Reserve waited an entire year to raise rates in December, but appears ready to make a March move. The odds of a March hike continue to climb, and are currently at 88% percent, according to the CME Group. Fed policymakers have been dropping hints of a March move, and a red-hot labor market and higher inflation levels present further arguments in favor of higher rates. Earlier in the year, the Fed had said that it wanted to wait until it had a clearer idea of President Trump’s economic policy before it tightened monetary policy. However, Trump has not backed up his promises to reform the tax code and increase fiscal spending with any details. Some Fed policymakers wanted to raise rates earlier this year, so Fed Chair Yellen is under pressure to make a move, and it appears virtually certain that the Fed will raise rates by a quarter-point on March 15.

• Jobs data the final piece of the puzzle but not necessarily essential for a hike;
• ADP number suggests we're heading for another stellar report;
• Earnings and participation arguably the most important parts of the report;
• Oil paring losses but recent declines a concern with output deal extension not guaranteed.

US equity markets have spent the last week in correction mode following a fantastic run throughout February, but futures suggest they could open higher on Friday in a sign that traders may be expecting some good numbers from the US jobs data today.

The February jobs report could be the final piece of the puzzle as the Federal Reserve prepares to meet next week to discuss whether to raise interest rates for the first time this year. The coordinated comments from Fed policy makers is recent weeks has been like interest rate hike roadshow, with officials clearly determined to sell the idea to the markets ahead of the meeting. Markets until that point had completely written off such a scenario but have since responded to the barrage of hawkish commentary from Fed officials.

Given the recent efforts from policy makers, I think the jobs report today will be largely irrelevant when it comes to the discussion on interest rates next week. The figures today will literally have to be terrible in order for the Fed to consider postponing a hike that has only been made possible because of their determination that it could happen. The possible credibility cost is great enough that the Fed will not want to disappoint unless it feels it absolutely necessary.

What's more, the ADP number on Wednesday would suggest there's nothing to worry about. While this isn't always a great estimate of the NFP number, it does tend to be a decent indicator of market expectations being either way too high or low and coming in more than 100,000 above expectations certainly falls in that bracket. A lot of people will have raised their expectations on the back of the ADP release but even if NFP now fails to live up to them, I very much doubt it will be bad enough to cast doubt on a rate hike next week which should offer support for the US dollar.

Other aspects of the report are arguably more important, such as average hourly earnings which tend to rise when the labour market is as tight as the unemployment number would suggest. Earnings have been steadily rising over the last two years but are still doing so at a slower pace than the Fed would like and expect if inflation is going to rise in line with its expectations. The stubbornly low participation rate may go some way to explaining this along with other structural issues but I think the central bank will be comfortable as long as the direction of travel continues as it has since the start of 2015.

Brent and WTI crude is paring losses today having suffered considerable losses over the last few days. It would appear the substantial long speculative positions have been pared back over the last 48 hours which may bring some stability back to the market but ultimately, what's happened is a worrying sign for oil and more importantly, those countries that have agreed to cut production in order to support prices. An extension beyond the middle of the year appears to be required to prevent oil slipping further but this is far from guaranteed with Saudi Arabia appearing to lose it patience and non-OPEC compliance not seeming to match that of OPEC members.

Market expectations are for a strong February employment print

Notes/Observations

Market expectations are for a strong February employment print today following ADP on Wednesday

BOE 12-month inflation expectation hits a 3-year high (2.9% v 2.8% prior)

Overnight:

Asia:

South Korea Court Justices presents its impeachment ruling on President Park Geun-hye: Unanimously upholds impeachment decision

PBoC Gov Zhou Xiaochuan reiterated that monetary policy was prudent and neutral; to fine-tune policy based on situation; had many tools for monetary policy and would not overreact to drop in FX reserves

PBoC Dep Gov Yi Gang reiterated govt to stick to current FX framework to keep yuan basically stable. Reiterated view that China will not devalue Yuan to stimulate exports and definitely not engage in a currency war

Europe:

German Chancellor Merkel on EU Leader Summit: ECB chief Draghi reiterated view to leaders that they can't rely on ECB stimulus measures indefinitely (need to implement structural reforms

France President Hollande: UK PM May did not give any hints about Brexit strategy at the EU leaders summit

IMF's Lagarde: French Euro exit would make France poorer and would lead to a period of grave uncertainty

Americas:

Treasury Sec Mnuchin: Congress should raise debt limit at first opportunity. Treasury will take other extraordinary measures to prevent US default

Energy:

Repsol [REP.ES] said to make the biggest US Onshore oil discovery of about 1.2B barrels in Alaska; production to start in 2021

Economic data

(DE) Germany Feb Wholesale Price Index M/M: 0.5% v 0.8% prior; Y/Y: 5.0% v 4.0% prior

(DE) Germany Jan Current Account: €12.8B v €15.5Be; Trade Balance: €14.8B v €18.0Be; Exports M/M: +2.7% v +2.0%e; Imports M/M: +3.0% v +0.5%e

(DE) Germany Q4 Labor Costs Q/Q: 1.5 v 0.6% prior; Y/Y: 3.0 v 2.3% prior

(NO) Norway Feb CPI (miss) M/M: 0.4% v 0.8%e; Y/Y: 2.5% v 2.9%e

(NO) Norway Feb CPI Underlying M/M: 0.5% v 0.8%e; Y/Y: 1.6% v 2.0%e

(RO) Romania Feb CPI M/M: -0.1% v -0.1%e; Y/Y: 0.2% v 0.2%e

(FR) France Jan Industrial Production (miss) M/M: -0.3% v +0.5%e; Y/Y: -0.4% v 0.4%e

(FR) France Jan Manufacturing Production M/M: -1.0% v +0.5%; Y/Y: -1.3% v +0.3%e

(IT) Italy Q4 Unemployment Rate: 11.9% v 11.7%e

(UK) Jan Visible Trade Balance: -£10.8B v -£11.1Be, Total Trade Balance: -£2.0B v -£3.1Be, Trade Balance Non EU: 2.5B v -£2.4Be

(UK) Jan Industrial Production M/M: -0.4% v -0.5%e; Y/Y: 3.2% v 3.2%e

(UK) Jan Manufacturing Production M/M: -0.9% v -0.7%e; Y/Y: 2.7% v 2.9%e

(UK) BoE/TNS Feb Quarterly Inflation expectations Survey (next 12-months): 2.9% v 2.8% prior

Fixed Income Issuance:

(IT) Italy Debt Agency (Tesoro) sold €6.5B vs. €6.5B indicated in 12-month Bills; Avg Yield: -0.226% v -0.247% prior; Bid-to-cover: 1.58x v 1.68x prior

(ZA) South Africa sold total ZAR1.29B in I/L 2029, 2033 and 2046 bonds

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Indices [Stoxx50 +0.7% at 3,434, FTSE +0.4% at 7,344, DAX +0.5% at 12,044, CAC-40 +0.5% at 5,008, IBEX-35 +0.7% at 10,069, FTSE MIB +0.8% at 19,727, SMI +0.2% at 8,654, S&P 500 Futures +0.3%]

Market Focal Points/Key Themes: European equity indices are trading sharply higher after ECB President Draghi's comments yesterday continue to add support, and as market participants await the US non-farm payrolls scheduled later today; Banking stocks across Europe trading notably higher with the Eurostoxx led by shares of Deutsche Bank, ING and SocGen; Italian FTSE MIB outperforming as the heavily weighted peripheral lenders in the index trade sharply higher; Energy, commodity and mining stocks also trading higher as oil and copper pare back some recent losses.

Upcoming scheduled US earnings (pre-market) include Buckle, Genesco, Hibbett Sporting Goods, Kirklands, Ply Gem, Sprague Resources, and Vail Resorts.

Equities (as of 09:50 GMT)

Consumer Discretionary: [JD Wetherspoon JDW.UK -3.1% (H1 results)]

Energy: [Repsol REP.ES +2.6% (major oil discovery in Alaska), Spie SPIE.FR -0.6% (FY16 results)]

Financials: [Compagnie Financiere Tradition CFT.CH +7.0% (FY16 results), JRP Group JRP.UK +6.3% (FY16 results), Segro SGRO.UK -4.0% (rights issue, acquires 50% stake in APP JV)]

Healthcare: [Synairgen SNG.UK +11.2% (LOXL2 positive data)]

Industrials: [Semperit SEW.DE -0.6% (FY16 results), SFS Group SFSN.CH -1.2% (FY16 results)]

Materials: [Akzo Nobel AKZA.NL +4.2% (PPG reportedly planning second bid)]

Telecom: [BT Group BT.UK +4.6% (BT and Ofcom reach Openreach governance agreement)]

Speakers

ECB's Vasiliauskas (Lithuania): Euro Area economy is recovering

Foreign Sec Boris Johnson: Would not be reasonable for EU to expect Britain to accept a vast bill to settle its liabilities after Brexit; government would fight any demand for payment.

South Korea Fin Min Yoo commented following Court formal impeachment ruling that the domestic economic policy would be managed as usual

S&P on South Korea: Impeachment ruling had no immediate impact on sovereign rating

China Foreign Ministry reiterated urging of stability on Korean peninsula

Currencies

Focus on US payroll data in session. Market expectations are for a strong February employment print today following ADP on Wednesday but analysts noted that the average hourly earnings would be more important for the USD price action as it would suggest higher domestic inflationary pressures. The key factor would be any change in market expectations for the number of Fed rate hikes in 2017 (currently seen at 3).

Dealers perceived a hawkish tilt from Draghi during Thursday's press conference which saw a sell-off in bunds and EURUSD higher to test above the 1.06 level. German yields were set for biggest fortnightly rise in nearly two years as a result.

Japanese yen dropped to a seven-week low amid speculation a stronger reading in US payroll data could support three rate hikes by Federal Reserve this year. USD/JPY pair probing the mid-115 area ahead of the jobs report.

The GBP/USD was little changed despite a plethora of mixed economic data for January. A quarterly BOE inflation expectation survey saw the 12-month outlook hot a three year high of 2.9%. The central bank had previously cautioned that a rise in inflation could likely to strain the spending power of households who had been driving the recovery in the economy since the financial crisis

EUR/NOK cross was higher after Norway Feb CPI data came in below expectations. The cross tested the 9.12 level for fresh 2017 highs.

Fixed Income:Bund futures trade at 159.67 down 32 ticks on risk on trade following on from a mildly hawkish Draghi in yesterdays ECB press conference. Yields continue to move higher recording the largest fortnightly gain in two years. Support moves to 159.44 low followed by 159.17. Resistance moves to 160.20 followed by 160.66 then 161.06.

Gilt futures trade at 126.00 down 45 ticks aided by slightly stronger Industrial and Manufacturing data out of the UK. Support moves to 125.57 followed by 125.24. Resistance remains at 126.87 followed by 127.35. Short Sterling futures trade flat to down 2bp, in steepening trade with Jun17Jun18 spread widening to 17/18bp.

Friday liquidity report showed Thursday's excess liquidity rose to €1.365T up €9B from €1.356T prior. Use of the marginal lending facility rose to €136M from €111M prior.

Corporate issuance saw $5.5B come to market via 6 issuers as weekly issuance topped $40B. Issuance was led by Delta Airlines $2.0B 2 part offering and Cintas Corp $1.7B 3 part offering. For the week ending March 8th Lipper US Fund lows reported IG funds net inflows of $3.48B bringing YTD Net inflows to $29.43B. High Yield funds reported net outflows of $2.12B bringing YTD outflows to $743M.

Looking Ahead

(PE) Peru Jan Trade Balance: $0.2Be v $1.0B prior

(MX) Mexico Feb Nominal Wages Y/Y: No est v 4.1% prior

06:00 (PT) Portugal Feb CPI M/M: No est v -0.6% prior; Y/Y: No est v 1.3% prior

06:00 (PT) Portugal Feb CPI EU Harmonized M/M: No est v -0.7% prior; Y/Y: 1.5%e v 1.3% prior

06:00 (IE) Ireland Jan Industrial Production M/M: No est v -11.7% prior; Y/Y: No est v -1.3% prior

06:00 (IE) Ireland Jan Property Prices M/M: No est v -0.4% prior; Y/Y: No est v 8.1% prior

06:00 (UK) DMO to sell combined £2.0B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.0B respectively)

06:30 (CL) Chile Central Bank Economist Survey

06:30 (IN) India Weekly Forex Reserves

06:45 (US) Daily Libor Fixing

07:00 (BR) Brazil Feb IBGE Inflation IPCA M/M: 0.4%e v 0.4% prior; Y/Y: 4.9%e v 5.4% prior

07:00 (IN) India Jan Industrial Production Y/Y: +0.5%e v -0.4% prior

08:00 Spain Debt Agency (Tesoro) announces upcoming bond issuance

08:15 (UK) Baltic Dry Bulk Index

08:30 (US) Feb Change in Nonfarm Payrolls: +200Ke v +227K prior, Change in Private Payrolls: +215Ke v +237K prior, Change in Manufacturing Payrolls: +10Ke v +5K prior

08:30 (US) Feb Unemployment Rate: 4.7%e v 4.8% prior, Underemployment Rate: No est v 9.4% prior, Change in Household Employment (civilian labor force): No est v +159.7K prior, Civilian Labor Force Participation Rate: No est v 62.9 prior

08:30 (US) Feb Average Hourly Earnings M/M: 0.3%e v 0.1% prior; Y/Y: 2.8%e v 2.5% prior; Average Weekly Hours: 34.4e v 34.4 prior

08:30 (CA) Canada Feb Net Change in Employment: -5.0Ke v +48.3K prior; Unemployment Rate: 6.8%e v 6.8% prior

10:00 (UK) Feb NIESR GDP Estimate: 0.6%e v 0.7% prior

11:00 (EU) Potential sovereign ratings after European close: Germany Sovereign Debt to be rated by Fitch

13:00 (US) Weekly Baker Hughes Rig Count data

13:00 (CO) Colombia Central Bank Feb Minutes

14:00 (US) Feb Monthly Budget Statement: -$190.0Be v +$51.3B prior

Janet Yellen announced a possible increase of the interest rates at the meeting on Friday, March 3. The stable growth of the US economy is main condition for that increase. FedWatch Tool is at the level 84.1% level currently.

FedWatch Tool

Source: cmegroup.com

Our attention is glued to the labor market of the United Stated. Many experts think that the growth of the Nonfarm Payrolls will lower by 16.3% to 190,000. They also anticipate the decrease of the unemployment rate from 4.8% to 4.7%. But the average hourly earnings are likely to increase to 0.3% according to the experts' expectations.

Source: investing.com

We will wait for an optimistic report as the last statistics from the US was at a high level. The demand for USD should grow.

The technical analysis of the GBP/USD currency pair

The key levels:
support: 1.2175, 1.2050
resistance: 1,2300, 1.2400, 1.2550

GBP may weaken against USD. The technical indicators tell us about the sellers' strength. 50 MA is below 200 MA, while MACD has moved to the negative zone. This histogram continues to decline at the moment.

I recommend traders to open short positions, if the price reaches the 1.2175 support level and fixes there. The pair may move to 1.2050. I advise to use a trailing stop while trading this currency pair.

Total Payrolls showed 227k increase in January that was much higher than the consensus of 190k. The NFP data was the largest in couple of months, reassuring strong US labor market. Additionally we saw unemployment edging up to 4.8 % and the only decrease was in the average hourly earnings annual rate. My expectations from today's US data are that NFP will come better than expected (210k-215k vs 190k expected) while Unemployment Rate and Average Hourly Earnings will roughly stay the same. But you can never be 100 % sure of data so we need to wait and see.

Technically the rallies on EUR/USD are still sold into and depending on NFP we might see a fade on rallies close to 1.0675. Currently the pair is trapped within the rectangle range and we can clearly see 3 trend lines that have formed Xcross ™ at important levels. Today's NFP levels to watch for are: 1.0675 (H5, ATR overshot), 1.0642 (ATR top ), 1.0600 (H3, Xcross ™), 1.0572 (ATR, DPP, Xcross ™) and 1.0525 (L4, Xcross ™).

Spot Gold is in steep descend that broke below psychological $1200 support today and signals further weakness. Recent strong bearish acceleration through some important supports ($1212, $1207, $1200) generated strong bearish signals for extension of two-legged pullback from $1263 (27 Feb peak). US dollar's strong bullish sentiment on rate hike expectations keeps the yellow metal under pressure. Also, firmly bearish technical studies support the notion. After taking out $1200 pivot, bears are eyeing daily Ichimoku cloud top at $1191, break of which would spark further weakness for full retracement of $1180/$1263 rally ($1180 – 27 Jan trough/daily cloud base). Broken 55 and 100SMA's now act as solid barriers at 1207/10, ahead of broken Fibo 61.8% at $1212. US NFP data are in focus.

Res: 1200, 1207, 1210, 1216
Sup: 1195, 1191, 1188, 1180