Market Roundup
• Trump says he could let China trade deal deadline slip, 'not inclined to'
• Trump dislikes congressional deal but does not expect shutdown
• Fed's Powell: Bank consolidation weighing on rural communities
• Red flags emerge as Americans' debt load hits another record
• Bank of England's Carney spells out no-deal Brexit hit to UK
• UK's May seeks more time to find Brexit deal, tells lawmakers: Hold your nerve
• US Dec JOLTS Job Openings, 7.335 mln, 6.900 mln forecast, 6.888 mln previous, 7.166 mln revised
• US Jan NFIB Business Optimism Index, 101.20, 104.40 previous
Looking Ahead - Economic Data (GMT)
• 12 Feb 23:50 Japan Jan Corp Goods Price YY, 1.1% forecast, 1.5% previous
• 12 Feb 23:50 Japan Jan Corp Goods Price MM, -0.2% forecast, -0.6% previous
• 12 Feb 23:30 Australia Feb Consumer Sentiment, -4.7% previous
• 12 Feb 01:00 New Zealand 13 Feb Cash Rate, 1.75% forecast, 1.75% previous
Looking Ahead - Events, Other Releases (GMT)
• N/A Reserve Bank of New Zealand to announce official cash rate (OCR) and monetary policy statement. Media conference after the OCR announcement in Wellington.
• 00:30 Kansas Fed's Esther George to speak on "Charting America's Economic Course" at a public conversation hosted by the Kansas City Public Library in Kansas.
• 08:30 Swedish Central Bank to announce interest rate decision. Monetary policy report will also be published in Stockholm.
• 10:00 The Riksbank will hold a press conference on its interest rate decision. Stefan Ingves, governor of the Riksbank, and Jesper Hansson, head of the Monetary Policy Department, will participate in the press conference in Stockholm.
• 13:50 Atlanta Fed's Raphael Bostic participates in moderated discussion on the economic outlook and monetary policy before the European Financial Forum in Dublin.
• 13:50 Cleveland Fed's Loretta Mester to speak at the 2019 Economic Conference hosted by the University of Kentucky Gatton College of Business and Economics in Lexington, United States.
• 17:00 Federal Reserve Bank of Philadelphia President Patrick Harker to speak on the economic outlook before the Jewish Business Network Power Lunch in Philadelphia.
Currency Summaries
EUR/USD: The euro strengthened against dollar on Tuesday , as dollar weakened on rising hopes of a breakthrough in U.S-China trade talks. Top U.S. officials arrived in the Chinese capital on Tuesday ahead of high-level trade talks as the world's two largest economies attempt to hammer out a deal ahead of a March 1 deadline to avoid another escalation of tariffs.The euro was up 0.16 percent at $1.1294. The dollar index, which measures the currency against a basket of six rivals, was 0.13 percent lower on Tuesday at 96.935. Immediate resistance can be seen at 1.1388 (50 DMA), an upside break can trigger rise towards 1.1443 (100 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 currency rose off three-week lows against the dollar on Tuesday, as Prime Minister Theresa May said the government would seek to speed up ratification of its Brexit withdrawal deal with the European Union if time gets too tight. The deadlock and delays over the terms of Brexit have heightened fears among financial investors of a no-deal and disorderly, economically disruptive departure even if the majority of British lawmakers want to avoid one. May told lawmakers on Tuesday to hold their nerve over Brexit and give her more time to negotiate a deal acceptable to both the European Union and the British parliament. Immediate resistance can be seen at 1.2909 (5 DMA), an upside break can trigger rise towards 1.2991 (11 DMA).On the downside, immediate support is seen at 1.2813 (50 DMA), a break below could take the pair towards 1.2800 (Lower Bollinger Band).
USD/CAD: The Canadian dollar strengthened against the greenback on Tuesday, adding to this year's gains as oil prices climbed and as risk appetite was boosted by the potential de-escalation of the trade dispute between the United States and China. U.S. crude oil futures settled 1.3 percent higher, boosted by steep OPEC production cuts after its de-facto leader, Saudi Arabia, said it planned to drop March crude output by more than a half a million barrels per day below its initial pledge. At (2031 GMT), the Canadian dollar was trading 0.5 percent higher at 1.3236 to the greenback. The currency traded in a range of 1.3233 to 1.3312. Immediate resistance can be seen at 1.3337 (50 DMA), an upside break can trigger rise towards 1.3374 (Jan 24th high).On the downside, immediate support is seen at 1.3200 (9 DMA), a break below could take the pair towards 1.3069 (Feb 1st low).
USD/JPY: The dollar edged higher against the Japanese yen on Tuesday, as signs that the United States and China might reach an agreement in trade talks and news of a tentative deal to avoid another government shutdown in Washington, helped push greenback higher against yen . U.S. and Chinese officials expressed hopes that the new round of talks, which began in Beijing on Monday, would bring them closer to easing their nearly year-long trade war.The dollar was 0.10 higher versus the Japanese yen at 110.47. Strong resistance can be seen at 110.69 (23.6% fib), an upside break can trigger rise towards 111.00 (Psychological level).On the downside, immediate support is seen at 110.13 (38.2% fib), a break below could take the pair towards 109.92 (50% fib).
Equities Recap
European shares closed higher on Tuesday as investors cheered positivity around U.S.-China trade talks and signs of a compromise to avoid another U.S. government shutdown, while Michelin's results pumped up automotive stocks.
UK's benchmark FTSE 100 closed up by 0.1 percent, the pan-European FTSEurofirst 300 ended the day up by 0.56 percent, Germany's Dax ended up by 1.1 percent, France’s CAC finished the day up by 1 percent.
Wall Street rallied on Tuesday as investors were heartened by a tentative congressional spending deal to avoid another partial federal government shutdown and by optimism surrounding U.S.-China trade negotiations.
Dow Jones closed up by 1.46 percent, S&P 500 ended up 1.28 percent, Nasdaq finished the day up by 1.43 percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday after lawmakers reached a tentative pact to avert another government shutdown, and as investors focused on inflation data expected on Wednesday for further signals about interest rate policy.
Benchmark 10-year yields have fallen from 2.799 percent on Jan. 18 and are down from a seven-year high of 3.261 percent in October as investors price in a far more dovish Federal Reserve.
Commodities Recap
Gold prices edged higher on Tuesday, buoyed by a slight retreat in the U.S. dollar amid optimism about a potential resolution of the U.S.-China trade conflict.
Spot gold was up 0.2 percent at $1,310.75 an ounce at (2055 GMT), having declined 0.4 percent in the previous session.U.S. gold futures settled 0.2 percent higher at $1,314.00.
