Market Roundup
- Amid trade talks, China urges U.S. to respect its right to develop, prosper
- Fed's Williams says new economic outlook necessary for rate hikes
- U.S. Fed says minutes to be released on time as offices close
- Trump confident he will prevail against lawsuits over emergency declaration
- Trump plans to nominate Jeffrey Rosen as Justice Dept. No. 2 -senior official
- May in Brussels again, seeking Brexit movement
- UK's Hammond says EU won't consider alternatives to backstop for now
- Japanese firms see flat business spending amid trade frictions, tax hike jitters
- Japan Jan Exports YY, -8.4%, -5.5% f’cast, -3.8% prev, -3.9% rvsd
- Japan Jan Imports YY, -0.6%, -2.8% f’cast, 1.9% prev
- Japan Jan Trade Balance Total Yen, -1,415.2 bln, -1,011.0 bln f'cast, -55.3 bln prev, -56.7 bln rvsd
- Australia Q4 Wage Price Index QQ, 0.5%, 0.6% f’cast, 0.6% prev
- Australia Q4 Wage Price Index YY, 2.3%, 2.3% f’cast, 2.3% prev
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Jan Producer Prices MM, -0.2% f’cast, -0.4% prev
- (0200 ET/0700 GMT) Germany Jan Producer Prices YY, 2.2% f’cast, 2.7% prev
- (1000 ET/1500 GMT) EZ Feb Consumer Confid. Flash, -7.8 f’cast, -7.9 prev
Key Events Ahead
- (0200 ET/0700 GMT) ECB chief economist Peter Praet delivers a speech in Frankfurt
- (0600 ET/1100 GMT) Riksbank Deputy Governor Martin Flodén discusses the economic situation and monetary policy in Stockholm
- (1310 ET/1810 GMT) Dallas Fed President Robert Kaplan participates in a moderated question-and-answer session in Houston
- (1400ET/1900 GMT) FOMC will release the minutes from its January 29-30, 2019 policy meeting in Washington
FX Beat
DXY: The dollar index rebounded from near 2-week lows after New York Fed President John Williams stated that he was comfortable with the current U.S. interest rates levels and there is no need to raise them again unless economic growth or inflation shifts to an unexpectedly higher gear. The greenback against a basket of currencies trades 0.05 percent up at 96.56, having touched a low of 96.43 on Tuesday, its lowest since February 8. FxWirePro's Hourly Dollar Strength Index stood at -70.31 (Bearish) by 0500 GMT.
EUR/USD: The euro rose, hovering towards a near 2-week peak hit in the previous session after data released on Tuesday showed Germany recorded the world's largest current account surplus for the third year running in 2018 due to strong exports. The European currency traded 0.1 percent up at 1.1343, having touched a high of 1.1357 on Tuesday, its highest since Feb. 7. FxWirePro's Hourly Euro Strength Index stood at 25.29 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone prelim consumer confidence and ECB Praet's speech ahead of the Fed's latest policy meeting minutes release. Immediate resistance is located at 1.1368 (Feb.7 High), a break above targets 1.1394 (Jan. 23 High). On the downside, support is seen at 1.1299 (5-DMA), a break below could drag it till 1.1216 (Nov. 13 Low).
USD/JPY: The dollar rallied to a 6-day peak, amid optimism that a fresh round of talks between China and the United States would help resolve their trade conflict. The major was trading 0.2 percent up at 110.82, having hit a high of 111.12 on Thursday, its highest since December 27. FxWirePro's Hourly Yen Strength Index stood at 127.76 (Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the Fed's latest policy meeting minutes release. Immediate resistance is located at 111.05 (Feb. 13 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 slightly edged lower after rising to an over 2-week peak earlier in the session on hopes that British Prime Minister Theresa May will make progress in seeking changes to her Brexit deal with the European Union. The major traded 0.05 percent down at 1.3054, having hit a high of 1.3076 earlier; it’s highest since February 14. FxWirePro's Hourly Sterling Strength Index stood at 105.49 (Highly Bullish) 0500 GMT. Investors’ attention will remain on PM May and EU Juncker's meeting, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3103 (Feb. 4 High), a break above could take it near 1.3160 (January 31 High). On the downside, support is seen at 1.2993 (5-DMA), a break below targets 1.2903 (5-DMA). Against the euro, the pound was trading 0.1 percent down at 86.86 pence, having hit a high of 86.72 on Tuesday, it’s highest since Jan. 29.
AUD/USD: The Australian dollar surged to a 2-week peak on mixed domestic data, with wages missing forecasts in the December quarter but annual growth in the private sector rising at the fastest pace in five years. The Aussie trades flat at 0.7160, having hit a high of 0.7176 earlier; it’s highest since February 6. FxWirePro's Hourly Aussie Strength Index stood at 96.20 (Slightly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7125 (5-DMA), a break below targets 0.7089 (Feb. 7 Low). On the upside, resistance is located at 0.7203 (January 28 High), a break above could take it near 0.7235 (January 11 High).
NZD/USD: The New Zealand dollar declined, as the greenback gained ahead of the release of minutes from the Federal Reserve's January policy-setting meeting. The Kiwi trades 0.2 percent down at 0.6865, having touched a high of 0.6893 on Monday, its highest level Feb. 6. FxWirePro's Hourly Kiwi Strength Index was at -43.69 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6911 (Dec. 11 High), a break above could take it near 0.6941 (Feb. 1 High). On the downside, support is seen at 0.6795 (10-DMA), a break below could drag it below 0.6766 (Feb. 6 Low).
Equities Recap
Asian shares consolidated near 4-month highs, supported by hopes that U.S.-China trade talks were making progress.
MSCI's broadest index of Asia-Pacific shares outside Japan nudged higher.
Tokyo's Nikkei gained 0.1 percent to 21,308.70 points, Australia's S&P/ASX 200 index surged 0.3 percent to 6,106.90 points and South Korea's KOSPI fell 0.2 percent to 2,207.68 points.
Shanghai composite index declined 0.3 percent to 2,746.08 points, while CSI300 index traded 0.4 percent down at 3,432.25 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 28,282.16 points. Taiwan shares added 0.1 percent to 10,152.26 points.
Commodities Recap
Crude oil prices eased after rising to 2019 highs in the previous session on supply cuts led by producer club OPEC and by U.S. sanctions on Iran and Venezuela. International benchmark Brent crude was trading 0.2 percent down at $66.31 per barrel by 0523 GMT, having hit a high of $66.81 on Monday, its highest since November 20. U.S. West Texas Intermediate was trading 0.8 percent higher at $56.49 a barrel, after rising as high as $56.75 earlier, its highest since the November 20.
Gold prices rallied to fresh 10-month highs, boosted by global slowdown concerns and a weaker dollar, with markets eyeing the release of the U.S. Federal Reserve's policy meeting minutes later in the day. Spot gold was trading 0.1perecnt up at $1,342.71 per ounce by 0527 GMT, having touched a high of $1,346.78 per ounce earlier, its highest level since April 20. U.S. gold futures dipped 0.2 percent to $1,342.6 an ounce.
Treasuries Recap
The Japanese government bond prices rose modestly, the two-year JGB yield declined half a basis point to minus 0.185 percent, its lowest since November 2017. The 10-year yield fell half a basis point to a 1-1/2-month low of 0.040 percent. The 30-year yield slipped as much to 0.580 percent.
The Australian bond futures surged, with the three-year bond contract up 3.5 ticks at 98.355. The 10-year contract rose 3 ticks to 97.8950.
The New Zealand government bonds firmed, sending yields 1 to 2 basis points lower.
The Canadian government bond prices edged lower across much of the yield curve, with the two-year down 0.5 Canadian cent to yield 1.779 percent and the 10-year falling 5 Canadian cents to yield 1.901 percent.
