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Futures, February 24, according to market news, last Friday night, the Trump administration of the United States is pressuring Iraq to allow Kurdish oil exports to resume, otherwise it will face sanctions together with Iran. Oil prices have fallen back significantly. Iraqs Deputy Minister of Oil said on Sunday that once oil transportation resumes, Iraq will export 185,000 barrels per day from oil fields in the Kurdish region through the Iraq-Turkey pipeline, and gradually increase to 400,000 barrels per day. All procedures for resuming pipeline exports have been completed, which may resolve a dispute that has disrupted the flow of crude oil for nearly two years. However, resuming pipeline transportation may put Iraq in a dilemma. On the one hand, it has to cut production, and on the other hand, Trump called on OPEC+ to lower oil prices. In addition, the President of Ukraine said that he is willing to resign as president if it can bring peace, and pay attention to the acceleration of the Russian-Ukrainian negotiations. In the short term, oil prices are still volatile, and the focus is on the supply side.Hong Kong stocks Hang Seng Index and Hang Seng Tech Index both turned positive, after the Hang Seng Tech Index had previously fallen rapidly by more than 1%.The Hang Seng Index in Hong Kong opened on February 24 (Monday) down 5.78 points, or 0.02%, to 23,472.14 points; the Hang Seng Technology Index opened on February 24 (Monday) up 5.25 points, or 0.09%, to 5,864.55 points; the CSI 300 Index opened on February 24 (Monday) up 3.81 points, or 0.04%, to 8,670.53 points; the H-share Index opened on February 24 (Monday) down 5.01 points, or 0.13%, to 3,857.09 points.Hang Seng Index futures opened at 23,399 points, down 0.21%, 77 points below the spot price.USD/CNY reported 7.1717, up 21 points (RMB depreciation); EUR/CNY reported 7.5475, up 87 points; HKD/CNY reported 0.92306, up 9.6 points; GBP/CNY reported 9.1115, up 34 points; AUD/CNY reported 4.5928, down 98 points; CAD/CNY reported 5.0734, down 47 points; JPY/CNY reported 4.8332, up 105 points; RMB/RUB reported 12.2042, down 361 points; NZD/CNY reported 4.1537, up 26 points; RMB/RMB reported 0.61309, down 11.5 points; CHF/CNY reported 8.0106, up 128 points; SGD/CNY reported 5.3914, down 45 points.

EUR / USD Investors Challenge 1.0600 As Mixed US Data Tests Fed Conservatives, US NFP, and ECB's Lagarde

Daniel Rogers

Mar 10, 2023 11:31

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EUR / USD gains bids to extend the midweek rebound from a two-month low, rising 0.16 percent intraday near 1.0600 on Friday morning. In doing so, the Euro-Dollar pair celebrates the broad weakness in the US Dollar ahead of the important US employment report for February and Christine Lagarde's speech as president of the European Central Bank (ECB).

 

The major currency pair reversed a two-day losing trend due to mixed US data and a decline in US Treasury bond yields the day before. Hawkish ECB remarks and the market's positioning for today's crucial US data bolstered the run-up. However, inflation worries and geopolitical tension present challenges for EUR / USD buyers.

 

Despite this, US Initial Jobless Claims increased to 211K for the week ending March 3, compared to the predicted 195K and the previous week's 190K. In addition, there was a decline in Challenger Job Cancellations and an increase in Continuing Jobless Claims. Consequently, early indications for Friday's Nonfarm Payrolls (NFP) appear mixed and challenge the market's push for a 0.50 percentage point Fed rate hike in March, which is supported by Federal Reserve Chairman Jerome Powell's most recent signals.

 

Despite contradictory data, inflation worries continue to favor Fed conservatives, especially after Chairman Jerome Powell defends the stricter monetary policy, which restrains Euro prices. It should be noted that the most recent report from the New York Fed noted that recent upward revisions to inflation data and higher-than-anticipated levels of inflation had altered what had previously appeared to be a decline in price pressures.

 

Francois Villeroy de Galhau, an ECB policymaker, stated on Thursday that they will return inflation to 2% by the end of 2024 or 2025.

 

In addition to the aforementioned catalysts, geopolitical concerns emanating from US President Joseph Biden's proposed budget for 2024 and the US's partnership with the UK and Australia for nuclear submarines should challenge EUR / USD buyers.

 

In this context, US 10-year and 2-year Treasury bond yields extend yesterday's losses to 3.88% as of press time, dragging on the US Dollar Index (DXY), which is presently down 0.10 percent to 105.12. Despite this, Wall Street benchmarks closed with daily losses exceeding 1.5%, causing S&P 500 Futures to post modest losses as of press time.

 

According to market predictions, the employment report for February in the United States is expected to reveal a general softening. The same contrasts with the Fed's hawkish inclination to emphasize the likelihood of a significant market move in favor of the US Dollar in the event of a positive surprise. However, Lagarde of the ECB must confirm this.

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