Daily Market Review: US Retailers' Sales Rose In February

• French Non-Farm Payrolls (QoQ) (Fra, 07:30 GMT)

• French CPI (MoM) (Fra, 08:45 GMT)

• Industrial Production (MoM) (EU, 11:00 GMT)

• Retail Sales (MoM) + Import Price Index (MoM) (U.S, 13:30 GMT)

• 10-Year Note Auction (U.S, 18:00 GMT)

• Federal Budget Balance (U.S, 19:00 GMT)

Sales at U.S. retailers probably rose in February for a fourth consecutive month as a better job market and stronger household finances helped consumers adjust to a higher payroll tax, economists said before a report today. The projected 0.5 percent advance would follow a 0.1 percent gain in January, according to the median forecast in a Bloomberg survey of 82 economists before the Commerce Department’s figures.

China’s new leaders may further loosen interest-rate controls this year while allowing limited changes to one-child and household-registration policies that threaten to restrain growth, a survey of analysts showed. Twelve of 16 analysts expect China to relax or remove the cap on deposit rates or the floor on lending rates, according to a Bloomberg News survey conducted ahead of Xi Jinping’s appointment as president tomorrow.

The International Monetary Fund’s No. 2 official urged policy makers to clean up banks and strengthen oversight of their financial systems or risk stalling a recent rally in global markets. With the world economy still subdued, further repair of banks’ balance sheets is necessary, which may require more capital for some lenders and closure for others, David Lipton, the fund’s first deputy managing director, said in a speech in Washington yesterday. He also called for unwinding of excessive public and private debt.

EUR/USD: The EUR/USD was trading slightly higher at 1.30391 at the time of writing after the European Central Bank council member Jens Weidmann said the euro’s exchange rate won’t derail the region’s economic recovery. However, investors should remain very prudent as market sentiments remain weak on the EUR. Events likely to affect the trend of the pair today are the French Non-Farm Payrolls (QoQ) (Expected to remain flat at -0.2%), The French CPI (MoM) (Expected to improve to 0.5% compare to -0.5% registered last month), the Spanish CPI (MoM), (Expected to increase to 0.1% compared to last month -1.3%), the Industrial Production (MoM), (Expected to decline to -0.1% from 0.7% recorded last month), the Italian 3-Year BTP Auction and the German 2-Year Schatz Auction.

Later in the day, the U.S will release the MBA Mortgage Applications (WoW), the Import Price Index (MoM) (Forecast: 0.5% – Previous: 0.6%) and the Retail Sales (MoM), which is probably rose in February for a fourth consecutive month. The projected 0.5 percent advance would follow a 0.1 percent gain in January, according to the median forecast in a Bloomberg survey of 82 economists before the Commerce Department’s figures. The U.S will also release the 10-Year Note Auction and the Federal Budget Balance, which is expected to come at -205.0B compared to 3.0B. The pair is likely to fluctuate within the 0.0% and 23.6% Fibonacci level of the last falling wave. A wait and see approach will be a good strategy on the pair. The resistance level is at 1.30760 and the support level is at 1.29899.

NZD/USD: The NZD/USD was trading lower at 0.82486 at the time of writing on speculation the nation’s worsening drought will weigh on the economy. The pair is likely to fluctuate within the current resistance level of 0.82728 and the current support level of 0.82284 ahead of some important data in the U.S. Today, the U.S will release the MBA Mortgage Applications (WoW), the Import Price Index (MoM) (Forecast: 0.5% – Previous: 0.6%) and the Retail Sales (MoM), which is probably rose in February for a fourth consecutive month. The projected 0.5 percent advance would follow a 0.1 percent gain in January, according to the median forecast in a Bloomberg survey of 82 economists before the Commerce Department’s figures.

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The U.S will also release the 10-Year Note Auction and the Federal Budget Balance, which is expected to come at -205.0B compared to 3.0B. Positive data from the U.S will be bullish for the USD. However, investors should stay on their guard as the New Zealand will release the Interest Rate Decision and the RBNZ Rate Statement early tomorrow morning. The nation’s worsening drought may back the case for the central bank to keep interest rates at a record low. The RBNZ will keep its benchmark borrowing cost unchanged at 2.5 percent, according to every economist in a Bloomberg News survey. In addition, New Zealand Finance Minister Bill English said yesterday the dry weather could hurt economic growth. Drought declarations were extended to most of North Island last week, including the nation’s biggest milk-producing region. Food prices fell 0.3 percent last month after increasing 1.9 percent in January, official data showed today. Investors should remain very prudent on the pair and adopt a wait and see strategy. Volatility is expected late on the American session.

WTI (Oil): Oil was trading higher at 92.660 at the time of writing after the OPEC said its 2013 demand forecast, calling for an increase of 800,000 barrels per day, is unchanged and after an industry report showed crude stockpiles fell for the first time since February in the U.S., the world’s largest user of the commodity. Market sentiments were slightly bullish on the commodity ahead of the Crude Oil Inventories in the U.S. The Crude Oil Inventories is forecast to come at 2.338M compare to 3.833M registered last week.

In other news., Saudi Arabia, Iraq and Kuwait, OPEC’s biggest producers, are in talks to ship extra crude to India as the nation prepares to halt purchases from Iran because of global sanctions, four people with knowledge of the matter said. Indian refiners, which are waiting for an order from the oil ministry to stop buying Iranian cargoes, are discussing annual term contracts with the countries for the year starting April 1, the people said this week, asking not to be identified because the information is confidential. South Sudan and Sudan agreed to order companies to resume southern oil shipments through a Red Sea export terminal within two weeks, more than a year after they were halted over a dispute about transportation fees, according to an agreement signed yesterday in Ethiopia’s capital, Addis Ababa. South Sudan’s production was 350,000 barrels a day before the shutdown, according to data compiled by Bloomberg. Investors should remain cautious and monitor all the data and news from the Eurozone, U.S and China to get more visibility on the commodity. The resistance level is at 93.415 and the support level is at 91.523.