Previous:
On Tuesday, trading on the EUR/USD currency pair closed down. Despite a rise in quotes to 1.0630, the rate fell to 1.0576, and then further to 1.0551 in the Asian session. The dollar rose across the board after San Francisco Fed chief John Williams commented that the FOMC would be looking very closely at the possibility of raising interest rates when they sit down later this month.
In response to his comments, US 10-year bond yields shot up. According to CME Group’s FedWatch Tool, the probability of a rate hike in March has grown from 31.0% to 62.0%, in May from 53.1% to 69%, and in June from 72.6% to 83.5%.
I’ve disregarded Donald Trump’s address to Congress as his speech provided no details or figures about his reform plans.
Market expectations:
Looking at the bigger picture, the single currency should fall against the dollar today. During the European and US sessions, I’m expecting a drop to around 1.0527. If 10-year bond yields rise above 2.43%, then we can set 1.0502 as an intraday target.
The news section for Wednesday is quite full, and each event is likely to induce some kind of correction on the market.
Day’s news:
- 10:00 Switzerland: UBS consumption indicator (Jan);
- 11:30 Switzerland: SVME PMI (Feb);
- 11:55 Germany: unemployment change (Feb), Markit manufacturing PMI (Feb);
- 12:00 Eurozone: Markit manufacturing PMI (Feb);
- 12:30 UK: Markit manufacturing PMI (Feb), consumer credit (Jan), M4 money supply (Jan), mortgage approvals (Jan);
- 16:00 Germany: Consumer Price Index (Feb);
- 16:30 Canada: current account (Q4);
- 16:30 USA: personal consumption expenditures – price index (Jan), personal spending (Jan), personal income (Jan);
- 17:30 Canada: RBC manufacturing PMI (Feb);
- 17:45 USA: Markit manufacturing PMI (Feb);
- 18:00 Canada: BoC interest rate decision; USA: ISM manufacturing PMI (Feb), construction spending (Jan), ISm prices paid (feb);
- 18:30 USA: EIA crude oil stocks change (Feb 24);
- 21:00 USA: FOMC member Kaplan’s speech;
- 22:00 USA: publication of Fed’s Beige Book.
