Market Roundup
- U.S.-China trade talks move to higher level as deadline looms
- Trump considers 60-day extension for China tariffs deadline -Bloomberg
- U.S. Congress negotiators finish drafting border security bill-aide
- "Border buster" shows why Brexit frontier checks in N.Ireland would matter
- Venezuela opposition takes steps to seize oil revenue as Maduro issues threat
- UK house price outlook darkest since 2011 – RICS
- China Jan Exports YY, 9.1%, -3.2% f'cast, -4.4% prev
- China Jan Imports YY, -1.5%, -10.0% f'cast, -7.6% prev
- China Jan Trade Balance (USD), 39.16 bln, 33.50 bln f'cast, 57.06 bln prev
- Japan Q4 GDP QQ Annualized, 1.4%, 1.4% f'cast, -2.5% prev, -2.6% rvsd
- Japan Q4 GDP QQ Capital Expenditure, 2.4%, 1.8% f'cast, -2.8% prev, -2.7% rvsd
Economic Data Ahead
- (0130 ET/0630 GMT) France Q4 ILO Unemployment Rate, 9.1% f'cast, 9.1% prev
- (0200 ET/0700 GMT) Germany Q4 GDP Flash YY NSA, 0.9% f'cast, 1.1% prev
- (0200 ET/0700 GMT) Germany Q4 GDP Flash QQ SA, 0.1% f'cast, -0.2% prev
- (0500 ET/1000 GMT) EZ Q4 GDP Flash Estimate YY, 1.2% f'cast, 1.2% prev
- (0500 ET/1000 GMT) EZ Q4 GDP Flash Estimate MM, 0.2% f'cast, 0.2% prev
- (0500 ET/1000 GMT) EZ Q4 Employment Flash YY, 1.2% f'cast, 1.3% prev
Key Events Ahead
- (0300 ET/0800 GMT) Riksbank executive board meeting - Stockholm
- (0430 ET/0930 GMT) BoE's Jan Vlieghe speaks on outlook for the economy in Britain and globally – London
- (0605 ET/1105 GMT) BoJ's Masazumi Wakatabe speaks on "The Financial System 10 years On" - Dublin
- (1100 ET/1600 GMT) FRB Philadelphia's Patrick Harker speaks on "Approaches to Leadership" at Third Annual Lerner MBA Student Association Conference - Newark
- (1200 ET/1700 GMT) Norway Central Bank Governor Oeystein Olsen delivers annual address - Oslo
FX Beat
DXY: The dollar index eased, hovering away from a multi-week peak after data released on Wednesday showed 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 and supporting the Fed's recent stance on interest rate hikes. The greenback against a basket of currencies trades 0.2 percent down at 97.05, having touched a high of 97.26 the day before, its highest since December 17. FxWirePro's Hourly Dollar Strength Index stood at -34.41 (Neutral) by 0400 GMT.
EUR/USD: The euro plunged to a 3-month low as weaker-than-expected economic data out of the eurozone and expectations the European Central Bank will remain highly accommodative this year undermined the bid tone around the major. However, the greenback's retreat from multi-week peaks helped the pair to bounce back. The European currency traded 0.2 percent up at 1.1278, having touched a low of 1.1248, its lowest since Nov. 13. FxWirePro's Hourly Euro Strength Index stood at 36.02 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone prelim gross domestic product, ahead of the U.S. retail sales, producer price index, unemployment claim benefits and business inventories. Immediate resistance is located at 1.1304 (5-DMA), a break above targets 1.1368 (Feb.7 High).. On the downside, support is seen at 1.1216 (Nov. 13 Low), a break below could drag it till 1.1180.
USD/JPY: The dollar surged to a 1-1/2 month peak against the Japanese yen, supported by sustained strength in core U.S. inflation and as China's trade figures including crude imports beat forecasts. The major was trading 0.05 percent up at 111.02, having hit a high of 111.12 earlier, its highest since December 27. FxWirePro's Hourly Yen Strength Index stood at -175.16 (Highly Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. retail sales, producer price index, unemployment claim benefits and business inventories. Immediate resistance is located at 111.40 (Dec. 26 Low), a break above targets 111.82 (Aug. 29 Low). On the downside, support is seen at 110.27 (5-DMA), a break below could take it lower at 109.60 (Feb. 7 Low).
GBP/USD: Sterling consolidated near a 3-week low, as investors remain wary of taking big bets before a firm resolution on the terms of Brexit. The major traded 0.2 percent up at 1.2868, having hit a low of 1.2832 on Tuesday; it’s lowest since January 21. FxWirePro's Hourly Sterling Strength Index stood at -36.94 (Neutral) 0400 GMT. Investors’ attention will remain on developments surrounding Brexit deal and BoE Vlieghe's speech, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2957 (10-DMA), a break above could take it near 1.3080 (January 23 High). On the downside, support is seen at 1.2819 (January 14Low), a break below targets 1.2766 (Nov 22 Low). Against the euro, the pound was trading flat at 87.83 pence, having hit a low of 88.21 last week, it’s lowest since Jan. 22.
AUD/USD: The Australian dollar rallied above the 0.7100 handle after data showed China's January dollar-denominated exports rose 9.1 percent from a year earlier, while imports dropped 1.5 percent, both beating expectations. The Aussie trades 0.4 percent up at 0.7119, having hit a high of 0.7135 on Wednesday; it’s highest since February 6. FxWirePro's Hourly Aussie Strength Index stood at 167.12 (Highly Bullish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7044 (Dec. 26 Low), a break below targets 0.7016 (Dec. 27 Low). On the upside, resistance is located at 0.7166 (January 24 High), a break above could take it near 0.7203 (January 28 High).
NZD/USD: The New Zealand dollar advanced, extending gains for the third straight session, following the release of better-than-expected trade data from China. Moreover, a smaller probability of any rate cuts after the Reserve Bank of New Zealand slashed expectations for a future easing at its Wednesday meeting boosted investor sentiment. The Kiwi trades 0.5 percent up at 0.6829, having touched a high of 0.6851 on Wednesday, its highest level Feb. 6. FxWirePro's Hourly Kiwi Strength Index was at 157.50 (Highly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6862 (Jan. 29 High), a break above could take it near 0.6911 (Dec. 11 High). On the downside, support is seen at 0.6766 (Feb. 6 Low), a break below could drag it below 0.6706 (Jan. 22 Low).
Equities Recap
Asian shares tumbled, amid cautious trading sentiment as investors wait for any hint of progress in the latest U.S.-China tariff talks amid reports the White House could extend the deadline for a deal.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.2 percent.
Tokyo's Nikkei gained 0.1 percent to 21,159.78 points, Australia's S&P/ASX 200 index eased 0.1 percent to 6,059.40 points and South Korea's KOSPI fell 0.05 percent to 2,201.16 points.
Shanghai composite index eased 0.2 percent to 2,716.50 points, while CSI300 index traded 0.05 percent down at 3,395.65 points.
Hong Kong’s Hang Seng traded 0.5 percent lower at 28,368.48 points. Taiwan shares shed 0.05 percent to 10,089.01 points.
Commodities Recap
Crude oil prices rallied to a 2-1/2 month peak, boosted by hopes that potential progress in the latest U.S.-China tariff talks would improve the global economic outlook. International benchmark Brent crude was trading 0.5 percent up at $63.96 per barrel by 0438 GMT, having hit a high of $64.02 earlier, its highest since November 21. U.S. West Texas Intermediate was trading 0.5 percent higher at $54.16 a barrel, after rising as high as $54.58 on Wednesday, its highest since the February 5.
Gold prices edged higher as soft U.S. inflation data raised expectations that the Federal Reserve will pause rate hikes this year, while investors’ attention remained on the developments in trade talks between Washington and Beijing. Spot gold was 0.2 percent up at $1,308.40 per ounce by 0442 GMT, having touched a high of $1,318.02 on Wednesday, its highest level since February 4. U.S. gold futures were down 0.3 percent at $1,311.
Treasuries Recap
The Japanese government bond prices edged higher, with the five-year JGB yield easing 1 basis point to minus 0.165 percent and the 10-year yield dipping half a basis point to minus 0.015 percent.
The Australian government bond futures were slightly firmer, with the three-year bond contract up half a tick at 98.325. The 10-year contract rose 1.5 ticks to 97.865.
The New Zealand government bonds fell, sending yields about 4 basis points higher across the curve.
The Canadian government bond prices were lower across the yield curve in sympathy with Treasuries. The two-year fell 3.7 Canadian cents to yield 1.818 percent and the 10-year declined 14 Canadian cents to yield 1.935 percent.
