· The euro wallowed close to a 21-month low against the dollar on Friday, hurt by a series of dovish signals from the European Central Bank, and the currency market braced for further volatility ahead of U.S. jobs data later in the day.
The single currency stood little changed at $1.1196 after tumbling 1 percent on Thursday to touch $1.1176, its lowest since June 2017. It has declined 1.5 percent this week.
The euro slid along with euro zone yields, with the 10-year German bund yield declining to its lowest since October 2016 following Thursday's ECB meeting.
The February U.S. jobs report to be released as 1330 GMT could stack more pressure on the floundering euro.
The dollar index against a basket of six major currencies was a shade lower at 97.548. The index soared 0.75 percent on Thursday to brush a near three-month peak of 97.71 and was headed for a weekly gain of 1.2 percent.
· The dollar slipped to an eight-day low against the yen on Friday as the region’s equities slid on the back of risk aversion in the broader markets.
The greenback fell more than 0.5 percent to 111.015 yen, its lowest since Feb. 28. The yen, a perceived safe haven, often attracts demand in times of political tensions and market turmoil.
Asian stocks retreated across the board on Friday after shockingly weak February export data from China heightened fears in a market already burdened by worries of a global economic slowdown following the European Central Bank’s dovish
· EURUSD | CONTAINED PRICE ACTION LIKELY TO PERSIST
Range trading for EURUSD likely to persist amid the low volatility seen in the pair. Alongside this, while momentum indicators remain bearish, trend signals however, are relatively weak. Consequently, this suggests a lack of high conviction in the bearish sentiment and thus price remains somewhat contained. Support in the near-term remain situated at 1.1230-50, while topside resistance from 1.1375-80 may cap any rallies in the pair.
· U.S. job growth likely slowed to a five-month low in February as the weather-related boost in the prior two months faded, workers became more scarce and tighter financial conditions began to weigh on the labor market.
Still, the pace of hiring was probably strong enough to push the unemployment rate back below 4 percent.
Nonfarm payrolls likely increased by 180,000 jobs last month, according to a Reuters survey of economists. This would be the smallest gain since September. Payrolls increased by a total of 526,000 jobs in December and January as mild temperatures boosted hiring at construction sites and in the leisure and hospitality industry.
Temperatures turned chilly in February, which economists said could have reversed employment gains in these weather-sensitive industries. Economists also believed the effects of a stock market sell-off and jump in U.S. Treasury yields in late 2018 restrained February hiring, as household wealth plunged by a record $3.8 trillion and many sources of capital for companies froze up, according to Federal Reserve data..
· German industrial orders fell unexpectedly in January, data showed on Friday, in a further sign that Europe’s largest economy had a subdued start to 2019.
Contracts for ‘Made in Germany’ goods were down by 2.6 percent, data from the Federal Statistics Office showed.
· Back in London, the lower house of the U.K. Parliament, the House of Commons, is scheduled to carry out a series of votes next week. The first will be a second attempt at passing May's Brexit deal. If this fails again it will be followed by a vote on ruling out a no-deal scenario, and then a vote on whether the U.K. should seek to extend Britain's leaving date beyond the end of March.
· The Bank of France expects to issue a relatively “limited” downgrade to its forecasts for the French economy next week, said Bank of France governor Francois Villeroy de Galhau on Friday.
Villeroy was not more specific regarding the extent of its likely downgrade when it updates its forecasts next week, but added he felt the French economy was proving to be relatively “resilient” in light of a general slowdown within the euro zone.
· Deutsche Bank and Commerzbank’s chief executives have resumed talks over a potential merger of Germany’s two biggest lenders, Focus magazine reported on Friday, citing people familiar with the matter.
Deutsche Bank and Commerzbank declined to comment.
Deutsche Bank shares were indicated to start trading 0.1 percent higher, while Commerzbank was expected to trade 0.2 percent higher.
· China’s exports tumbled the most in three years in February while imports fell for a third straight month, pointing to a further slowdown in the economy despite a spate of support measures.
February exports fell 20.7 percent from a year earlier, the largest decline since February 2016, customs data showed. Economists polled by Reuters had expected a 4.8 percent drop after January’s unexpected 9.1 percent jump.
Imports fell 5.2 percent from a year earlier, worse than analysts’ forecasts for a 1.4 percent fall and widening from January’s 1.5 percent drop. Imports of major commodities fell across the board.
China's February trade balance was also significantly weaker than expected at $4.12 billion. Economists polled by Reuters had expected the overall trade balance to come in at $26.38 billion. The country's trade balance in January had been $39.16 billion.
China is currently in the midst of a two-week annual parliamentary meeting, the National People's Congress, which kicked off on Tuesday and ends next Friday (Mar. 5-15).
· China’s trade surplus with the United States narrowed to $14.72 billion in February, from $27.3 billion in January, customs data showed on Friday.
For January-February combined, China’s trade surplus with the U.S. stood at $42.1 billion.
· The Chinese government’s top diplomat, State Councilor Wang Yi, said on Friday that China supports Huawei Technologies’ bid for legal redress in the United States, adding that Chinese companies should use “legal weapons” and not be “silent lambs”.
The Chinese telecoms equipment maker has sued the U.S. government, saying a law limiting its U.S. business was unconstitutional, as Washington has sought to counter what it sees as China’s growing threat to U.S. economic competitiveness and security.
The lawsuit marks another rift between China and the United States, which spent most of 2018 slapping import tariffs on billions of dollars worth of each other’s goods.
· Oil prices dropped by more than one percent on Friday as clouds gathered over the global economy after the European Central Bank (ECB) warned of continued weakness and fresh data showed Chinese exports and imports slumped last month.
With surging U.S. supply also unsettling markets, international benchmark Brent crude futures were at $65.42 per barrel at 0803 GMT, down 88 cents, or 1.3 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $56.03 per barrel, down 63 cents, or 1.1 percent.
Investment bank Jefferies said on Friday that U.S. output growth was largely being fueled by onshore shale production, which had recently benefited from investments by oil majors Exxon Mobil and Chevron.
· CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices are struggling to find lasting directional momentum but a bearish Evening Star candlestick pattern along with negative RSI divergence continue to hint that a top is taking shape. A daily close below support in the 55.37-75 area would suggest the uptrend from 2019 lows has ended, setting the stage for resumption of the larger down move from mid-April. The next layer of support lines up in the 50.15-51.33 zone. Alternatively, a rebound above resistance in the 57.96-59.05 region targets the underside of a rising trend line support-turned-resistance, now at 62.31.
Reference: Reuters, CNBC
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