Market Roundup
- Trump says his "friend" Kim has great opportunity at second summit
- U.S. House passes bill rejecting Trump's border wall emergency
- Fed's Powell says 'no rush' to hike rates in 'solid' but slowing economy
- Brexit deal, no-deal or delay? British PM offers lawmakers a choice
- UK employers' confidence in economy slides before Brexit - REC
- Kuroda says inflation to miss BOJ's target in fiscal 2020
- BOJ's Kataoka calls for more stimulus to hit price goal early
- Australian construction work digs a hole for the economy in Q4
Economic Data Ahead
- (0400 ET/0900 GMT) EZ Jan Money-M3 Annual Grwth, 4.0% f’cast, 4.1% prev
- (0400 ET/0900 GMT) EZ Feb Business Climate, 0.60 f’cast, 0.69 prev
- (0400 ET/0900 GMT) EZ Feb Economic Sentiment, 106.0 f’cast, 106.2 prev
- (0400 ET/0900 GMT) EZ Feb Industrial Sentiment, 0.1 f’cast, 0.5 prev
- (0400 ET/0900 GMT) EZ Feb Services Sentiment, 11.0 f’cast, 11.0 prev
- (0400 ET/0900 GMT) EZ Feb Consumer Confid. Final, -7.4 f’cast, -7.4 prev
Key Events Ahead
- (0330 ET/0830 GMT) ECB board member Benoit Coeure speaks at a conference in Frankfurt
- (0500 ET/1000 GMT) Bundesbank President Jens Weidmann to speak and hold a news conference in Frankfurt
- (1000 ET/1500 GMT) Fed Chairman Jerome Powell testifies before the House Financial Services Committee in Washington
FX Beat
DXY: The dollar index rebounded from a 3-week low hit in the previous session after Federal Reserve Chairman Jerome Powell said that rising risks and recent soft data were unlikely to prevent solid growth for the U.S. economy this year. The greenback against a basket of currencies trades 0.1 percent up at 96.14, having touched a low of 95.95 on Tuesday, its lowest since February 5. FxWirePro's Hourly Dollar Strength Index stood at -56.67 (Bearish) by 0500 GMT.
EUR/USD: The euro eased, after rising to a near 3-week peak in the previous session on European Central Bank's future chief economist Philip Lane's views that a series on weak figures implied only modest revision in projections, all within the limits of the current policy strategy. The European currency traded 0.1 percent down at 1.1379, having touched a high of 1.1402 on Tuesday, its highest since Feb. 6. FxWirePro's Hourly Euro Strength Index stood at -1.39 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone economic sentiment indicator, ahead of U.S. wholesale inventories goods trade balance, durable goods, pending home sales, factory orders and Fed Chair Powel's testimony. Immediate resistance is located at 1.1417 (Jan. 25 High), a break above targets 1.1443 (Jan. 28 High). On the downside, support is seen at 1.1349 (5-DMA), a break below could drag it till 1.1289 (Feb. 18 Low).
USD/JPY: The dollar traded near a 1-1/2 week low touched in the previous session after U.S. Federal Reserve Chairman Jerome Powell reiterated the central bank's patient stance in further rate hikes. The major was trading flat at 110.58, having hit a low of 110.42 the day before, its highest since February 15. FxWirePro's Hourly Yen Strength Index stood at 14.16 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. wholesale inventories goods trade balance, durable goods, pending home sales, factory orders and Fed Chair Powel's testimony. Immediate resistance is located at 111.19 (Dec. 24 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 110.25 (Feb.15 Low), a break below could take it lower at 109.60 (Feb. 7 Low).
GBP/USD: Sterling consolidated near a 5-month peak touched in the prior session after British Prime Minister Theresa May offered lawmakers the chance to vote on delaying Brexit that could possibly avoid a chaotic no-deal departure from the European Union. The major traded flat at 1.3243, having hit a high of 1.3288 on Tuesday; it’s highest since September 20. FxWirePro's Hourly Sterling Strength Index stood at 126.63 (Highly Bullish) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3298 (Sept. 28 High), a break above could take it near 1.3362 (July 9 High). On the downside, support is seen at 1.3200, a break below targets 1.3138 (Oct. 16 Low). Against the euro, the pound was trading 0.05 percent down at 86.91 pence, having hit a high of 85.62 on Tuesday, it’s highest since May 2017
AUD/USD: The Australian dollar surged, extending gains for the third straight session, despite data showing fourth-quarter construction spending unexpectedly eased. The Aussie trades 0.1 percent up at 0.7187, having hit a high of 0.7198; it’s highest since February 21. FxWirePro's Hourly Aussie Strength Index stood at 65.06 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7103 (Feb.19 Low), a break below targets 0.7060 (Feb.8 Low). On the upside, resistance is located at 0.7206 (Feb. 21 High), a break above could take it near 0.7245 (Feb. 6 High).
NZD/USD: The New Zealand dollar rallied, hovering towards a 3-week peak hit in the prior session on signs of progress in the protracted U.S.-China trade dispute. The Kiwi trades 0.1 percent up at 0.6894, having touched a high of 0.6903 on Tuesday, its highest level Feb. 6. FxWirePro's Hourly Kiwi Strength Index was at 47.07 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6941 (Feb. 1 High), a break above could take it near 0.6969 (Dec. 4 High). On the downside, support is seen at 0.6854 (5-DMA), a break below could drag it below 0.6809 (Feb. 15 Low).
Equities Recap
Asian shares hovered towards a 5-month high after Federal Reserve Chairman Jerome Powell reinforced the U.S. central bank's stance to a more patient approach on policy due to a slowing economy.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2 percent.
Tokyo's Nikkei rose 0.5 percent to 21,556.51 points, Australia's S&P/ASX 200 index gained 0.4 percent to 6,150.30 points and South Korea's KOSPI rallied 0.4 percent to 2,235.28 points.
Shanghai composite index fell 0.2 percent to 2,936.64 points, while CSI300 index traded 0.8 percent down at 3,656.53 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 28,812.10 points. Taiwan shares shed 0.05 percent to 10,389.17 points.
Commodities Recap
Crude oil prices gained after a report showed a decline in crude inventories and as producer cartel OPEC held to its supply cuts despite pressure from U.S. President Donald Trump. International benchmark Brent crude was trading 0.05 percent up at $65.65 per barrel by 0522 GMT, having hit a low of $64.29 on Tuesday, its lowest since February 14. U.S. West Texas Intermediate was trading 0.1 percent higher at $56.04 a barrel, after falling as low as $55.00 on Tuesday, its lowest since the February 15.
Gold prices declined, as the greenback rebounded despite U.S. Federal Reserve Chairman Jerome Powell reiterated the central bank's patient stance in further rate hikes. Spot gold was 0.1 percent down at $1,327.91 per ounce at 0458 GMT, having touched a high of $1,346.61 per ounce last week, its highest level since April 20. U.S. gold futures settled down about 0.1 percent at $1,328.50 per ounce.
Treasuries Recap
The Japanese government bond yields plunged towards the end of Asian session, following a fall in the U.S. Treasury yields after Jerome Powell, Chair of the Federal Reserve stood by a patient stance to hike rates in the future despite his hopes of a sturdy economic growth through this year. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped nearly 2-1/2 basis points to -0.023 percent, the yield on the long-term 30-year hovered around 0.606 percent and the yield on short-term 2-year plunged 16 basis points to -0.160 percent.
The Australian government bond yields slumped during Asian trading session tracking a similar movement in the United States’ counterpart after Federal Reserve Chair Jerome Powell stressed on a 'patient' monetary policy stance despite expectations of a solid economic growth this year.The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2-1/2 basis points to 2.068 percent, the yield on the long-term 30-year bond suffered nearly 2 basis points to trade at 2.628 percent and the yield on short-term 2-year plunged over 2-1/2 basis points to 1.711 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 4.5 Canadian cents to yield 1.759 percent and the 10-year climbed 23 Canadian cents to yield 1.868 percent.
