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Poland’s President Andrzej Duda said Russia committed war crimes in Ukraine and needs to be punished. The safe-haven US dollar index rose this morning.
Australia’s exports of goods and services fell 2.9% to a six-month low of A$57.04 billion in February, exerting pressure on the AUD/USD forex pair.
Hong Kong’s S&P Global PMI slipped to 53.5 in March, from February’s nine-month high of 53.9, sending the HKD/USD pair lower in forex trading this morning.
Colombia’s producer prices accelerated 7.36% year-over-year in March, versus a 13.17% rise in the prior month. The news exerted pressure on the COP/USD forex pair.
Argentina’s industrial production declined by 1.4% year-over-year in February, versus 6.7% growth in the previous month, sending the ARS/USD pair lower in forex trading this morning.
What’s happening: The EUR/USD forex pair moved lower on Wednesday, as markets anticipated a closing of interest rate differentials between the two currencies.
What happened: Traders digested recent economic data and its potential impact on the monetary policy outlook.
Strength in the US dollar also exerted some pressure on the EUR/USD forex pair.
Why it matters: Eurozone’s final PMI data showed that the services sectors had expanded below expectations in March, while Germany’s factory orders increased the most since June 2021.
The S&P Global Eurozone services PMI fell to 55 in March, versus a preliminary reading of 55.6. However, the latest reading still signalled the strongest growth in the region’s services activity since May 2022. The S&P Global composite PMI for the region also came in lower, at 53.7 for March, versus the preliminary reading of 54.1.
Germany’s factory orders surprisingly grew 4.8% in February, after a 0.5% growth in the previous month.
In the US, lower-than-expected private employment growth and service sector expansion increased prospects of the US Federal Reserve pausing its rate hikes in May.
Private businesses in the US added 145,000 jobs in March, below market estimates of 200,000. The ISM services PMI fell to 51.2 in March, from 55.1 in February and missed market expectations of 54.5. The latest reading also signalled the slowest growth in the country’s services sector in three months.
The recent reports came after Tuesday’s economic reports, which showed a decline in job openings in February and weak ISM manufacturing data.
The US dollar rose on Wednesday, rebounding from the two-month low recorded in the prior session. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained around 0.3% to 101.85 on Wednesday.
The EUR/USD forex pair fell around 0.5% to $1.0907.
What to watch: Traders await the release of economic data on Eurozone’s construction PMI today. The S&P Global construction PMI, which increased to 47.6 in February, is expected to rise to 49.1 in March. Markets also await the NFP (non-farm payrolls) data from the US, due for release on Friday.
Context: Asian stocks settled mixed on Wednesday, as weak economic data raised concerns around a slowdown in economic growth.
Details: Global markets have remained cautious this week, following several softer-than-expected economic reports from major economies. US stocks also remained under pressure after recent data showed the country’s jobs market cooling.
A rise in oil prices after the OPEC+ (Organization of Petroleum Exporting Countries and its allies) announced a surprise output cut also increased concerns of high energy prices keeping inflation at elevated levels.
Japanese equities fell on Wednesday, with the Nikkei 225 shedding around 1.7% amid losses in energy and automobile stocks. This was the worst performing among the Asian stock markets.
Strength in Japanese yen also weighed on shares of export-oriented companies in the country. Japan’s index had notched gains for three sessions in a row before Wednesday.
Australia’s ASX 200 edged higher on Wednesday, after Reserve Bank Governor Philip Lowe said that the country’s central bank could still increase rates to combat inflation, despite keeping rates unchanged on Tuesday.
India’s BSE Sensex 30 jumped 0.99% to settle at 59,689.31 on Wednesday, despite the S&P Global India services PMI declining to 57.8 in March, versus a 12-year high of 59.4 recorded in February.
What are expectations: Traders now await the release of data on household spending, leading economic index and coincident index from Japan. The release of foreign exchange reserves data from China, India and Japan will also remain in focus on Friday.
Other Markets: US trading indices closed mixed on Wednesday, with the S&P 500 and Nasdaq 100 down by 0.25% and 1.01%, respectively, and the Dow Jones index up by 0.24%.
| Technical Levels | News Sentiment |
| GBP/USD – 1.2439 and 1.2450 | Positive |
| AUD/USD – 0.6698 and 0.6708 | Positive |
| WTI Crude Oil – 79.88 and 80.35 | Positive |
| Natural Gas – 2.122 and 2.131 | Negative |
| Dow Jones – 33467.73 and 33499.50 | Positive |
| Futures at 0400 (GMT) | ||
| EUR/USD (1.0895, -0.11%) | Dow ($33,614, -0.12%) | Brent ($84.42, -0.7%) |
| GBP/USD (1.2444, -0.14%) | S&P500 ($4,108, -0.22%) | WTI ($80.11, -0.6%) |
| USD/JPY (131.16, -0.12%) | Nasdaq ($13,026, -0.41%) | Gold ($2,030, -0.2%) |
Germany’s industrial production, construction PMI and new passenger car registrations, UK’s Halifax house price index and construction PMI, France’s construction PMI and new passenger car registrations, Italy’s construction PMI, Turkey’s gross foreign exchange reserves, Canada’s unemployment rate, employment change and Ivey PMI, US Challenger Job cuts, initial jobless claims, continuing jobless claims, natural gas stocks change, Baker Hughes crude oil rigs and total vehicle sales, as well as Russia’s total vehicle sales.
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