HERE’S SOMETHING Two-year Treasuries are most overbought since **1980**
Archives of “March 2, 2020” day
rssStop it, money markets! The Fed is not going to cut by that much in a single meeting
Peru silver production
OPEC+ meetings reportedly to go ahead as planned on 5-6 March in Vienna
Reuters reports, citing two OPEC sources on the matter
I don’t think anyone would expect the meeting to be postponed. The plunge in oil prices will be inevitable if they don’t come up with anything this week.
European equities start to see gains erode
DAX turns negative, Stoxx 600 turns flat on the day
Trouble in paradise? Both were up by a little over 2% to start the European morning but we are seeing the market turn tail and run with USD/CHF slipping back close to 0.9600.
US futures have also seen gains from the early European morning peter out, with E-minis just up by ~0.5% currently. USD/JPY is also back lower now to 107.75 after having hit a high of 108.58 just two hours ago.
The market is still holding out hope for global central bank stimulus, but as highlighted here, it may not necessarily be the solution to dig investors out of the hole.
OECD cuts 2020 global economic forecast to 2.4% from 2.9% previously
OECD warns that the global economy may shrink in Q1 2020
This follows their November forecast here previously. Notably, they have slashed China’s growth forecast to 4.9% from 5.7% previously. Meanwhile, in the US they forecast a 1.9% growth for the year – slightly lower by 2.0% previously.
As for the euro area, OECD sees growth of 0.8% this year, down from 1.1% previously. They note that the forecasts are currently based on the coronavirus epidemic peaking this quarter and says Japan and Europe risks a recession in their downside scenario.
SNB total sight deposits w.e. 28 February CHF 595.8 bn vs CHF 592.3 bn prior
Latest data released by the SNB – 2 March 2020
- Domestic sight deposits CHF 502.2 bn vs CHF 500.6 bn prior
Prior week’s release can be found here. A bit of a jump in overall sight deposits and that suggests some potential intervention by the SNB to smooth out the appreciation in the franc considering the market happenings last week.
Eurozone February final manufacturing PMI 49.2 vs 49.1 prelim
Latest data released by Markit – 2 March 2020
The preliminary release can be found here. Little change of note relative to initial estimates and this also just reaffirms some mild improvement – not significant – in factory activity with supply chain disruptions being the standout issue in the report for last month.
BREAKING : The BOJ bought a record amount of ETFs today
The total amounted to ¥101.4 billion, the most since the central bank began to intervene in the stock fund market in December 2010
This comes after BOJ governor Kuroda’s pledge to keep liquidity conditions ample and while they continue to insist that this move is aimed at lowering risk premiums, let’s be real. There’s only one reason why they are doing this.
EUR/USD looks to surpass key technical hurdles, nears 1.1100 level
EUR/USD touches a session high of 1.1092
The pair is continuing its unrelenting move higher over the past week or so as price now surpasses the 100-day MA (red line) @ 1.1056 and is looking to challenge the 200-day MA (blue line) @ 1.1098.
Break above that latter and the bias in the pair will turn to be more bullish and that could set up potential move back towards 1.1200 and the January high of 1.1239 next.
Month-end flows and unwinding in carry trades (euro as a funding currency) were among the many reasons helping the euro to climb in the past week but a new theme is also emerging in that the dollar is losing attractiveness amid the deterioration in yields.
That and the better market mood today is weighing on the greenback a little but so far, the technical momentum still isn’t really stopping for EUR/USD.
Watch out for a crack above 1.1100 as that may trigger a quick run higher towards 1.1200.