Market Roundup
• Fed's Clarida: Fed "especially" tied to data as it pursues patient policy.
• Fed's Kaplan says it will take time to see how much economy is slowing.
• US Q4 GDP 2nd Estimate, 2.6%, 2.3% forecast.
• US 23 Feb, w/e Initial Jobless Claims, 225k, 220k forecast, 216k prev, 217k revised.
• US 23 Feb, w/e Jobless Claims 4-Wk Avg, 229.00k, 235.75k prev, 236.00k revised.
• US 16 Feb, w/e Continued Jobless Claims, 1.805 mln, 1.733 mln forecast, 1.725 mln previous, 1.726 mln revised.
• Trump warns he could abandon China trade deal as advisers tout progress.
• China would need to report currency interventions –Kudlow.
• CA Q4 Current Account C$, -15.48 bln, -13.50 bln f'cast, -10.34 bln previous, -10.11 bln revised.
• CA Jan Producer Prices MM, -0.3%, 0.1% f'cast, -0.7% previous, -0.8% revised.
• CA Jan Producer Prices YY, 1.0%, 2.2% prev, -2.0% revised.
• Good riddance? EU's "Brexit fatigue" limits UK extension options.
Looking Ahead - Economic Data (GMT)
• 28 Feb 21:45 New Zealand Jan Building Consents, 5.1% previous
• 28 Feb 21:45 New Zealand Q4 Import Prices SA, -1.0% forecast, 2.6% previous
• 28 Feb 21:45 New Zealand Q4 Export Prices SA, -2.0% forecast, 2.3% previous
• 28 Feb 21:45 New Zealand Q4 Terms of Trade QQ, -1.0% forecast, -0.3% previous
• 28 Feb 22:30 Australia Feb AIG Manufacturing Index, 52.5 previous
• 28 Feb 23:30 Japan Feb CPI, Overall Tokyo, 0.4% previous
• 28 Feb 23:30 Japan Feb CPI Tokyo Ex fresh food YY, 1.0% forecast, 1.1% previous
• 28 Feb 23:30 Japan Jan Jobs/Applicants Ratio, 1.63 forecast, 1.63 previous
• 28 Feb 23:30 Japan Jan Unemployment Rate, 2.4% forecast, 2.4% previous
• 28 Feb 23:50 Japan Q4 Business Capex (MOF) YY, 4.5% previous
• 1 Mar 00:00 Australia Oct HIA New Home Sales MM SA, -6.1% previous
• 1 Mar 00:30 Japan Feb Nikkei Mfg PMI, 48.5 previous
• 1 Mar 01:45 China Feb Caixin Mfg PMI Final, 48.5 forecast, 48.3 previous
• 1 Mar 05:00 Japan Feb Consumer Confid. Index, 41.9 previous
Looking Ahead - Events, Other Releases (GMT)
• 01:15 Fed's Jerome Powell speaks at the Citizens Budget Commission 87th Annual Awards Dinner in New York
• 18:15 Fed's Raphael Bostic speaks on "A View from the Federal Reserve Bank of Atlanta" before the National Association for Business 35th Annual Economic Policy Conference in Washington D.C.
Currency Summaries
EUR/USD: The euro edged lower against the U.S. dollar on Thursday, as dollar gained after stronger-than-expected gross domestic product data. The Commerce Department reported that the American economy slowed in the fourth quarter - falling short of the Trump administration's 3 percent target - but less than economists polled by Reuters had forecast. Recent signs of cooling economic growth have rocked financial markets and led the Federal Reserve to pause its monetary tightening.The euro was down 0.01 percent at $1.1377, euro had earlier gained on bets economy may have turned a corner. An index that tracks the dollar versus a basket of six major currencies was up 0.07 at 96.18 . Immediate resistance can be seen at 1.1440 (Higher Bollinger Band), an upside break can trigger rise towards 1.1460 (Feb 1st High).On the downside, immediate support is seen at 1.1356 (50% retracement level), a break below could take the pair towards 1.1300 (Psychological level).
GBP/USD: British pound edged lower against the dollar on Thursday, as investors booked profits and assessed the continued uncertainty about when Britain will exit the European Union and on what terms. Sterling has surged to multi-month highs this week after Prime Minister Theresa May said lawmakers would get the chance to vote on a delay to Brexit if they choose not to back her Brexit withdrawal agreement.That has encouraged traders to slash their forecasts for a no-deal Brexit and instead expect a delay beyond the official March 29 departure date. The British currency slipped 0.33 percent to $1.3263 by 2042 GMT. The losses were of a similar magnitude versus the euro, with sterling 0.2 percent lower at 85.595 pence. Immediate resistance can be seen at 1.3350 (38.2% retracement level), an upside break can trigger rise towards 1.3442 (June 10th 2018 High).On the downside, immediate support is seen at 1.3215(50% retracement level), a break below could take the pair towards 1.3084 (61.8 % retracement level).
USD/CAD: The Canadian dollar edged higher against U.S. counterpart on Thursday, as weak Chinese economic data and mixed messages on the progress of trade talks between China and the United States dampened sentiment. Data showed that Chinese factory activity contracted to a three-year low and China's export orders fell at their fastest pace since the global financial crisis a decade ago, adding to ongoing worries about a slowdown in the Chinese economy and its impact on global markets. The Canadian dollar was trading 0.05 percent higher at 1.3162 to the greenback. Immediate resistance can be seen at 1.3277 (50% retracement level), an upside break can trigger rise towards 1.3355 (38.2% retracement level).On the downside, immediate support is seen at 1.3204 ( 61.8% retracement level A), a break below could take the pair towards 1.3085 (Feb 26 low).
USD/JPY: The dollar jumped higher against the Japanese yen on Thursday, after U.S. data showed that growth in the world's largest economy was stronger than expected in the fourth quarter. According to the Commerce Department report, U.S. gross domestic product increased at a 2.6 percent annualized rate in the fourth quarter after expanding at a 3.4 percent pace in the July-September period. Economists had been expecting growth of just 2.3 percent. The economy overall grew 2.9 percent in 2018, the best performance since 2015, and better than the 2.2 percent in 2017.Against the yen, the dollar rose 0.4 percent to 111.41 yen , turning positive after the U.S. GDP data, and hitting 111.43 yen, the highest in roughly 10 weeks. Strong resistance can be seen at 111.47 (100 DMA), an upside break can trigger rise towards 112.36 (23.6% retracement level).On the downside, immediate support is seen at 110.43 (21 DMA), a break below could take the pair towards 109.41 (Lower Bollinger Band).
Equities Recap
European shares scored a second straight month of gains in February after a choppy session on Thursday when optimism about European banks offset caution over U.S.-China trade.
UK's benchmark FTSE 100 closed down by 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.16 percent, Germany's Dax ended up by 0.2percent, France’s CAC finished the day up by 0.4 percent.
Wall Street's main indexes fell slightly on Thursday as support from better-than-feared U.S. GDP data was countered by concerns about earnings and U.S.-China trade relations.
Dow Jones closed down by 0.28 percent, S&P 500 ended down by 0.27 percent, Nasdaq finished the day down by 0.29 percent.
Treasuries Recap
U.S. Treasury yields rose on Thursday after stronger-than-expected gross domestic product data suggested fears of an impending recession may be overblown.
Yields across maturities ticked up, with the biggest gains recorded in the middle of the yield curve.
The benchmark 10-year government yield , a proxy for market sentiment about the overall health of the economy, was up 3.1 basis points, last at 2.724 percent.
Commodities Recap
Gold retreated to a two-week low on Thursday as the dollar recouped losses on stronger-than-expected U.S. economic data, setting bullion on course for its first monthly decline in the last five.
As of 0 (2110 GMT), spot gold fell 0.5 percent to $1,313 per ounce, after hitting a low of $1,312.43, its weakest since Feb. 15.U.S. gold futures settled down 0.4 percent at $1,316.1
Brent oil fell while U.S. crude futures steadied on Thursday as U.S.-China trade tensions persisted, both Chinese and Indian economies showed signs of slowing and news of surging U.S. production undermined OPEC-led output curbs.
Global benchmark Brent crude futures for April LCOc1 ended the session down 36 cents, or 0.5 percent, at $66.03 a barrel. The more active May Brent contract fell 27 cents, or 0.4 percent, to settled at $66.31.
U.S. West Texas Intermediate (WTI) crude for April delivery rose 28 cents, or 0.5 percent, to settle at $57.22.
