Market Roundup
• US Jan Core CPI MM, SA, 0.2%, 0.2% forecast, 0.2% previous
• US Jan Core CPI YY, NSA, 2.2%, 2.1% forecast, 2.2% previous
• US Jan CPI MM, SA, 0.0%, 0.1% forecast, -0.1% previous, 0.0% revised
• US Jan CPI YY, NSA, 1.6%, 1.5% forecast, 1.9% previous
• US 8 Feb, w/e Mortgage Market Index, 364.8, 378.9 previous
• 'So far, so good,' U.S.'s Mnuchin says of trade talks in China
• Wary of shutdown, Trump edges toward support for funding deal
• U.S. posts another budget deficit as tax revenues sag
• More time needed, Britain's May returns to parliament for Brexit
• CA Feb TR IPSOS PCSI, 54.12, 54.17 previous
Looking Ahead - Economic Data (GMT)
• 13 Feb 23:50 Japan Q4 GDP QQ, 0.4% forecast, -0.6% previous
• 13 Feb 23:50 Japan Q4 GDP QQ Annualised, 1.4% forecast, -2.5% previous
• 13 Feb 23:50 Japan Q4 GDP QQ Pvt Consmp Prelim, 0.8% forecast, -0.2% previous
• 13 Feb 23:50 Japan Q4 GDP QQ Capital Expend., 1.8% forecast, -2.8% previous
• 13 Feb 23:50 Japan Q4 GDP QQ External Demand, -0.4% forecast, -0.1% previous
• 14 Feb N/A China Jan Exports YY, -3.2% forecast, -4.4% previous
• 14 Feb N/A China Jan Imports YY, -10.0% forecast, -7.6% previous
• 14 Feb N/A China Jan Trade Balance USD, 33.50 bln forecast, 57.06 bln previous
Looking Ahead - Events, Other Releases (GMT)
• 09:30 Bank of England policymaker Jan Vlieghe to deliver a speech on the outlook for the economy in Britain and globally, a week after the BoE slashed its forecasts for UK growth because of Brexit and the global slowdown in London.
• 16:00 Federal Reserve Bank of Philadelphia President Patrick Harker to speak on "Approaches to Leadership" before the Third Annual Lerner MBA Student Association Conference in Newark.
Currency Summaries
EUR/USD: The euro strengthened against the U.S. dollar on Wednesday, as greenback rose after after a measure of inflation excluding energy prices rose. U.S. consumer prices were unchanged for a third straight month in January, leading to the smallest annual increase in inflation in more than 1-1/2 years, which could allow the Fed to hold interest rates steady for a while. The euro was down 0.53 percent at $1.1266. An index that tracks the dollar versus a basket of six major currencies was up 0.44 at 97.12. Immediate resistance can be seen at 1.1342 (Daily high), an upside break can trigger rise towards 1.1392 (50 DMA).On the downside, immediate support is seen at 1.1251 (Lower Bollinger Band), a break below could take the pair towards 1.1200 (Psychological level).
GBP/USD: The British pound declined against the greenback on Wednesday, as investors waited for another round of Brexit developments. With six weeks to go before Britain is due to leave the European Union, markets have become more jittery about Brexit related news and investors are wary of taking big bets before a firm resolution on the terms of Brexit is in sight. The pound jumped sharply shortly after 1200 GMT, gaining as much as 0.6 percent to $1.2959 before falling back below $1.29. At (2115 GMT), it was trading flat on the day against a broadly strengthening dollar. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.2894 (5 DMA), an upside break can trigger rise towards 1.2973 (11 DMA ).On the downside, immediate support is seen at 1.2815 (50 DMA), a break below could take the pair towards 1.2772 (Ichimoku Cloud Top).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday, as investors were cautious in thin-volume trade mainly due U.S. politics and the tariff war between Beijing and Washington. Greenback was, buoyed by hopes that the ongoing U.S.-China trade talks could result in an agreement. A trade deal could boost prospects for Canada's economy as a major producer of commodities, including oil. At (2140 GMT), the Canadian dollar was trading 0.17 percent lower at 1.3256 to the greenback. Immediate resistance can be seen at 1.3275 (5 DMA), an upside break can trigger rise towards 1.3339 (50 DMA).On the downside, immediate support is seen at 1.3195 (11 DMA), a break below could take the pair towards 1.3083 (Lower Bollinger Band).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday, as hopes for a resolution in a prolonged trade spat between the United States and China helped risk appetite. U.S. President Donald Trump said on Tuesday that he could let the March 1 deadline for a trade agreement with China "slide for a little while," but that he would prefer not to and expects to meet with Chinese President Xi Jinping. Beijing and Washington are trying to hammer out a deal before the March 1 deadline, after which U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent. The dollar was 0.48 higher versus the Japanese yen at 110.99. Strong resistance can be seen at 111.00 (Psychological level), an upside break can trigger rise towards 111.72 (100 DMA).On the downside, immediate support is seen at 110.34 (50 DMA), a break below could take the pair towards 109.86 (11 DMA).
Equities Recap
European shares rose on Wednesday as optimism about trade talks lifted global markets and data showed earnings growth forecasts for Europe were stabilising after steep downward revisions.
UK's benchmark FTSE 100 closed up by 0.82 percent, the pan-European FTSEurofirst 300 ended the day up by 0.61 percent, Germany's Dax ended up by 0.47 percent, France’s CAC finished the day up by 0.44 percent.
Wall Street closed higher on Wednesday as investor optimism was stoked over hopes the United States and China could iron out a trade deal, and benign inflation data suggested the Federal Reserve would hold interest rates steady in the near term.
Dow Jones closed up by 0.44 percent, S&P 500 ended up 0.28 percent, Nasdaq finished the day up by 0.06 percent.
Treasuries Recap
U.S. benchmark Treasury debt yields rose to one-week highs on Wednesday and the yield curve flattened after data showed that core consumer prices rose in January, easing concerns about a drop in inflation.
Benchmark 10-year notes fell 7/32 in price to yield 2.708 percent. The yield curve between two-year and 10-year notes flattened to 17 basis points, from 18 basis points before the inflation data.
Commodities Recap
Gold prices rose to hit a peak in more than a week on Wednesday on signs that the U.S. Federal Reserve will likely be patient on further interest rate rises, but rallying global equities kept the metal's gains in check.
Spot gold up 0.34 percent at $1,306.29 per ounce as of (2200 GMT), having touched their highest level since Feb. 4 at $1,318.12.U.S. gold futures settled up 0.1 percent to $1,315.10.
Oil prices rose almost 2 percent on Wednesday after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production, but swelling U.S. crude inventories limited the day's gains.
Brent crude futures settled up $1.19, or 1.9 percent, at $63.61 a barrel. The global benchmark touched a session high of $63.98, but pulled back after the EIA data was released.
U.S. crude futures settled up 80 cents, or 1.5 percent, at $53.90 a barrel, after touching $54.60 earlier in the session.
