Market Roundup
• US Feb existing home sales -3.7% v -2% forecast, 3.3% previous; off 10-yr high.
• US Jan monthly home prices y/y 5.7% v 6.2% previous, m/m 0% v 0.4% previous.
• Fed’s Kaplan: sees 3 rate hikes in 2017; a bit further to go on rate hikes before balance sheet shrinks.
• Four dead, others injured in Westminster attack, witnesses say car crashed into pedestrians; man armed with knife tried to enter parliament.
• UK ‘s top anti-terrorism officer says man believed to be the attacker is dead.
• EU Brexit negotiator Barnier: We can and we should agree – as soon as possible – on the principles of continuity, reciprocity and non-discrimination so as not to leave these (EU) citizens in a situation of uncertainty.
• Britain-based banks moving to Europe may get easier entry- ECB.
• US crude stockpiles at record high as imports surge –EIA.
• Bonds gain as concerns about Washington gridlock grow, Investors focusing on Washington reforms.
• BlackRock’s European bond chief says expects ECB to start raising rates in late 2018 at earliest
Looking Ahead - Economic Data (GMT)
• No Significant Events
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0750 levels and currently trading at 1.0802 levels. The pair has made session high at 1.0823 and hit lows at 1.0788 levels. Euro declined against the dollar on Wednesday as the dollar recovered some ground following a downturn on concerns over potential delays to President Donald Trump's pro-growth policies.Trump on Tuesday tried to rally Republican lawmakers behind a plan to dismantle Obamacare, his first major legislation since assuming office in January. Some investors fear that if the healthcare reform act runs into trouble or takes longer than expected to pass, then Trump's tax reform policies may face setbacks. On the data front, U.S. home resales fell more than expected in February amid a persistent shortage of houses on the market that is pushing up prices and sidelining prospective buyers. The National Association of Realtors said on Wednesday existing home sales declined 3.7 percent to a seasonally adjusted annual rate of 5.48 million units last month after hitting a 10-year high in January.
GBP/USD is supported in the range of 1.2381 levels and currently trading at 1.2485 levels. It reached session high at 1.2490 and dropped to session low at 1.2422 levels. Sterling declined against the dollar on Wednesday after an assailant stabbed a policeman and was shot by police just outside Britain's parliament building in London in what police described as a terrorist incident. The initial reports drove sterling to the day's lows against the dollar and euro, but as it emerged that an assailant had been shot, and with no reports of other separate incidents, the pound recovered to trade broadly flat on the day. By 2040 GMT, the pound was trading at $1.2482, having briefly fallen to as low as $1.2424, and up from levels of around $1.2450 before the news. Sterling earlier hit a four-week high of $1.2507, having surged 3 percent in the past week on a downturn in the dollar amid rapidly accelerating inflation, and after Bank of England minutes last week one policymaker voted for a rise in rates.
USD/CAD is supported at 1.3300 levels and is trading at 1.3325 levels. It has made session high at 1.3403 and lows at 1.3320 levels. The Canadian dollar strengthened against its U.S. counterpart on Wednesday after oil prices hit their lowest level since November following data which showed U.S. crude inventories had risen faster than expected. U.S. crude prices were down 1.20 percent to $47.66 a barrel, while Brent crude lost 1.24 percent to $50.33. Oil is one of Canada's leading exports. Canada's Liberal government unveiled a stay-the-course budget on Wednesday that targeted export growth and some measure of tax reform but did little to whittle away at deficits even as it backed off from an explicit pledge to improve the debt outlook. Finance Minister Bill Morneau's second budget contained few surprises, in line with expectations that Ottawa wants to wait to see what impact U.S. President Donald Trump’s still-evolving policies will have on Canadian competitiveness and trade before committing to further stimulus or tax reform. At 21:00(GMT), the Canadian dollar was trading last at C$1.3328 to the greenback, or 74.73 U.S. cents, weaker than the Bank of Canada's official close on Tuesday of C$1.3359, or 74.86 U.S. cents.
AUD/USD is supported around 0.7635 levels and currently trading at 0.7679 levels. It hit session high at 0.7685 and made session lows at 0.7655 levels. The Australian dollar declined against its US counterpart Wednesday as investors sold riskier assets and rushed towards safe havens, such Japanese Yen and gold on concerns about U.S. President Donald Trump's economic growth agenda. Investors became jittery overnight on worries about how quickly Trump could implement pro-growth policies, and unwound bullish bets on the U.S. dollar. That hit risk sentiment globally, hurting stocks, commodities and currencies. The Australian dollar hit a trough of $0.7676 after reaching $0.7750 in the previous session, the highest since early November. The Aussie has flirted with $0.7700/50 level several times in the past month but failed to pierce beyond, making it an indomitable barrier. The dollar index, which measures the greenback against a basket of six major rivals, was last down 0.2 percent at 99.600 after hitting a nearly seven-week low of 99.563 earlier.
Equities Recap
European shares hit a two-week low on Wednesday, extending losses from the previous session, weighed down by weaker banks and a plunge in security services firm Gemalto following a profit warning.
UK's benchmark FTSE 100 closed down by 0.7 percent, the pan-European FTSEurofirst 300 ended the day down by 0.34 percent, Germany's Dax ended down by 0.4 percent, France’s CAC finished the day down by 0.1 percent
Wall Street ended mixed after a choppy session on Wednesday as investors focused on President Donald Trump's struggle to push through a healthcare bill and snapped up stocks after a steep drop the day before.
Dow Jones closed down by 0.02 percent, S&P 500 ended up 0.19 percent, Nasdaq finished the day up by 0.49 percent.
Treasuries Recap
U.S. Treasury yields fell on Wednesday as investors reduced expectations that the Federal Reserve is likely to adopt a faster path in raising interest rates and any new fiscal stimulus is seen as unlikely in the near-term.
Benchmark 10-year notes gained 11/32 in price to yield 2.40 percent, down from 2.43 percent on Tuesday.
Commodities Recap
Oil prices slipped on Wednesday to their lowest since late November, with Brent testing the $50 per barrel support, after data showed record-high U.S. crude inventories rising faster than expected, raising doubts about the viability of OPEC-led output cuts.
Global benchmark Brent shed 32 cents, or 0.6 percent, to settle at $50.64 a barrel, its lowest close since Nov. 30 when OPEC countries agreed to cut output. The contract fell as low as $49.71 in morning trade.
On its first day as the front-month, U.S. West Texas Intermediate (WTI) crude futures for May slipped 20 cents, or 0.4 percent, to settle at $48.04 per barrel.
Gold climbed to a three-week high on Wednesday as the dollar fell to seven-week lows and bond yields sank on uncertainty over the economic policies of U.S. President Donald Trump.
Spot gold was up 0.4 percent at $1,249.98 an ounce by 2:43 p.m. EDT (1843 GMT), close to the session high of $1,251.26, the highest since Feb. 28.U.S. gold futures settled up 0.3 percent at $1,249.70.
