Headlines:
- Gold remains supported amid US-Iran uncertainty, but downside risks linger with NFP next
- Oil prices remain supported amid US-Iran uncertainty; traders likely to hedge into weekend
- Major currencies not up to much as we get into the final stretch of the week
- Bavaria February CPI +1.9% vs +2.1% y/y prior
- France February preliminary CPI +1.0% vs +0.8% y/y expected
- Spain February preliminary CPI +2.3% vs +2.2% y/y expected
- France Q4 final GDP +0.2% vs +0.2% q/q prelim
- Switzerland Q4 GDP +0.1% vs +0.2% q/q expected
- China’s Politburo: Development process of latest ‘five-year plan’ is “extremely unusual”
Markets:
- US dollar steady, little changed; CHF leads, GBP lags on the day
- European equities steady, mostly little changed
- S&P 500 futures lower by 0.4%, Nasdaq futures down 0.5%
- WTI crude oil up over 2% to $66.87
- Gold flat at $5,186 while silver is up 1% to $89.69
- US 10-year yields down 3 bps to 3.997%
- Bitcoin down 2.2% to $65,949
It was a relatively slower session with markets staying on edge as we approach the closing stages of the week/month.
Geopolitical tensions remain in focus as traders and investors await further developments between the US and Iran ahead of the weekend. That is making for a more guarded mood in general, with the dollar holding steadier while risk trades stay on the defensive. Meanwhile, oil prices are staying underpinned with WTI crude up over 2% near the week’s highs at $66.87.
In the major currencies space, there wasn’t much action to take note of. The dollar is keeping little changed mostly and more mixed with the bigger news being from Asia trading when China stepped in to slow the yuan appreciation by making it cheaper to buy up the dollar. That didn’t translate to much influence in Europe though.
EUR/USD is flat around 1.1803 with large option expiries in play at the 1.1800 mark. Meanwhile, GBP/USD is flat at 1.3475 despite political risks coming in as Labour were humiliated by the Gordon and Denton by-election results. Then, USD/JPY is down slightly by 0.2% to 155.83 but there wasn’t anything in it with the pair ranging near the 156.00 mark on the session.
Looking to equities, major indices in Europe kept a steadier mood with light changes and a more mixed showing. The selloff in Wall Street yesterday was largely due to tech shares and we’re seeing that continue again today. US futures are keeping lower across the board with S&P 500 futures down 0.4% and Nasdaq futures down 0.5% currently.
As for precious metals, there wasn’t much in it either with gold flat at $5,186 and silver just up a little over 1% to $89.69 on the day.
All eyes are staying on geopolitical developments, US stock market sentiment, as well as month-end flows in looking to wrap up the week.
This article was written by Justin Low at investinglive.com.