Market Roundup
- Asia stocks back from the brink as Wall St rallies
- U.S. House passes stopgap spending bill to avert shutdown
- U.S. Fed seen staying on rate-hike path after stock market plunge
- Pence views Japan's missile defence with North Korea on agenda for talks
- Japan ChiefCabSec Suga – Closely monitoring markets, world/Japan economies
- Japan Dec real wages -0.5% y/y, total cash earnings +0.7%, overtime +0.9%
- Japan End-Jan foreign reserves $1.2685 trln, end-Dec $1.2643 trln
- New Zealand Q4 HLFS Unemployment rate, 4.5% vs 4.6%, f'cast 4.6%
- New Zealand Q4 Job growth qq, 0.5% vs 2.2%, f'cast 0.2%
- Merkel ready for "painful compromises" with coalition deal in sight
- South Africa's Zuma to quit if conditions met in deal with Ramaphosa
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Dec Industrial Output m/m, -0.5% f'cast, 3.4% prev
- (0400 ET/0900 GMT) Great Britain Jan Hallifax House prices m/m, 0.2% f'cast, -0.6% prev
- (0400 ET/0900 GMT) Great Britain Jan Hallifax House prices 3m/yy, 2.4% f'cast, 2.7% prev
- NA More benchmark issues in pipeline today
- NA EFSF EUR 10-year benchmark, Sweden USD 3-year benchmark
Key Events Ahead
- (0400 ET/0900 GMT) ECB's Daniele Nouy and board member Sabine Lautenschlager speak in Frankfurt
- (0535 ET/1035 GMT) Germany E3.0 bln for 10 year auction
- (0600 ET/1100 GMT) Dallas Fed President Robert Kaplan speaks in Frankfurt
- (0830 ET/1330 GMT) New York Fed President William Dudley speaks in New York
- (1115 ET/1615 GMT) Chicago Fed President Charles Evans speaks in Iowa
FX Beat
DXY: The dollar index consolidated near 2-week peak as investors returned to global financial markets from previous days sell-off. The greenback against a basket of currencies traded flat at 89.62, having touched a high of 90.03 the day before, its highest since Jan. 24. FxWirePro's Hourly Dollar Strength Index stood at 43.57 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, extending previous session's rebound from 2-week lows, as investors awaited the European Central Bank's Non-Monetary Policy Meeting in Frankfurt, where the governing council of the ECB will be talking with Michel Barnier, the Chief Brexit Negotiator for the UK's Article 50 withdrawal from the EU. The European currency traded 0.1 percent up at 1.2389, having touched a low of 1.2314 the day before, its lowest since Jan. 30. FxWirePro's Hourly Euro Strength Index stood at -35.96 (Neutral) by 0500 GMT. Investors’ attention will remain on ECB Non-Monetary Policy Meeting, ahead of Fed William and Evan's speeches. Immediate resistance is located at 1.2424 (5-DMA), a break above targets 1.2500. On the downside, support is seen at 1.2351 (50.0% retracement of 1.2264 and 1.2537), a break below could drag it lower 1.2307 (38.2% retracement).
USD/JPY: The dollar eased, reversing previous session gains, despite the U.S. House of Representatives on Tuesday approving another stopgap bill to keep the federal government from shutting down. The major was trading 0.3 percent down at 109.22, having hit a high of 110.48 on Friday, its highest since Jan. 23. FxWirePro's Hourly Yen Strength Index stood at 145.84 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Fed William and Evan's speeches for further momentum. Immediate resistance is located at 110.18 (21-DMA), a break above targets 110.74. On the downside, support is seen at 108.99, a break below could take it lower 108.41.
GBP/USD: Sterling steadied below the 1.4000 handle after falling to a 2-week low in the previous session, as investors remained wary ahead of this week's Bank of England policy meeting. The major traded 0.1 percent up at 1.3964, having hit a low of 1.3836 on Tuesday, it’s lowest since Jan 18. FxWirePro's Hourly Sterling Strength Index stood at 145.84 (Highly Bullish) by 0500 GMT. Immediate resistance is located at 1.4094 (5-DMA), a break above could take it near 1.4150. On the downside, support is seen at 1.3918, a break below targets 1.3900. Against the euro, the pound was trading 0.1 percent down at 88.72 pence, having hit a low of 89.10 pence on Tuesday, it’s lowest since Jan. 17.
AUD/USD: The Australian dollar declined below 0.7900 as the spread between the 10-year Australian government bond yield and the 10-year US Treasury yield stood at 5 basis points. The Aussie trades 0.4 percent down at 0.7866, having hit a low of 0.7835 on Tuesday; it’s lowest since Jan. 10. FxWirePro's Hourly Aussie Strength Index stood at -48.04 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7835 (Previous Session Low), a break below targets 0.7805. On the upside, resistance is located at 0.7977 (21-DMA), a break above could take it near 0.8016 (10-DMA).
NZD/USD: The New Zealand dollar slumped towards the 0.7300 handle despite the Global Dairy Trade Price Index rising 5.9 percent, the largest increase since November 2016, with an average selling price of $3,553 per tonne in an auction. The Kiwi trades 0.4 percent up at 0.7309, having touched a low of 0.7256 the day before, its lowest level since Jan. 17. FxWirePro's Hourly Kiwi Strength Index was at 52.55 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7350, a break above could take it near 0.7403. On the downside, support is seen at 0.7245 (Jan 18 Low), a break below could drag it lower 0.7200.
Equities Recap
Asian shares steadied after falling to multi-week lows in the previous session, while the greenback consolidated near 2-week peak as the investor sentiment improved on Wall Street.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.7 percent.
Tokyo's Nikkei rose 0.2 percent to 21,645.37 points, Australia's S&P/ASX 200 index gained 0.8 percent to 5,876.80 points and South Korea's KOSPI tumbled 1.6 percent to 2,414.65 points.
Shanghai composite index fell 1.6 percent to 3,316.56 points, while CSI300 index was trading 1.9 percent down at 4,068.53 points.
Hong Kong’s Hang Seng was trading 0.3 percent lower at 30,510.86 points. Taiwan shares added 1.4 percent to 10,551.54 points.
Commodities Recap
Crude oil prices rose amid a share market recovery and supported by a report that showed U.S. crude inventories fell last week. International benchmark Brent crude was trading 0.2 percent up at $67.35 per barrel by 0505 GMT, having hit a low of $66.52 the day before, its lowest since Jan. 3. U.S. West Texas Intermediate was trading 0.1 percent up at $63.92 a barrel, after falling as low as $63.10 on Tuesday, its weakest since Jan. 22.
Gold prices edged up as investors resorted to bargain hunting after the safe-haven metal declined over 1 percent to its lowest in more than three weeks in the previous session. Spot gold was 0.4 percent up at $1,329.16 an ounce by 0515 GMT, having hit a low of 1,320.03 on Tuesday, lowest since Jan 11. U.S. gold futures were up 0.1 percent at $1,330.70 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.773 percent higher by 0.007 bps, while 5-year yield was 0.003 bps up at 2.511 percent.
The Japanese government bonds slumped as stocks prices rebounded after witnessing three straight days of heavy sell-off. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis point to 0.078 percent, the yield on the long-term 30-year note traded ½ basis point higher at 0.815 percent and the yield on short-term 3-year also climbed 1/2 basis point to -0.097 percent.
The Australian bonds snapped gains during early Asian session as investors cashed-in profits amid recovery in risk sentiments. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 5-1/2 basis points to 2.85 percent, the yield on the long-term 30-year note surged 3-1/2 basis points to 3.47 percent and the yield on short-term 2-year hovered around 2.02 percent.
The New Zealand government bonds ended Wednesday’s session on a higher note as investors have largely shrugged-off the better-than-expected Q4 employment market data, released overnight. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1/2 basis point to 2.97 percent, the yield on 20-year also slid 1/2 basis point to 3.49 percent while the yield on short-term 2-year slumped 5 basis points to 1.90 percent.
The Canadian government bond prices were lower across the yield curve, with the two-year down 9 Canadian cents to yield 1.839 percent and the 10-year falling 57 Canadian cents to yield 2.365 percent. On Monday, the 10-year yield touched its highest intraday level since May 2014 at 2.393 percent.
