Market Roundup
- Trump says he could let China trade deal deadline slip, 'not inclined to'
- Trump dislikes border security deal but Republicans urge support
- Mnuchin hopes for 'productive' trade meetings in China
- Fed to finalize plans to end balance sheet runoff 'at coming meetings' -Mester
- Australia's central bank surprised by weakness in consumption
- Australia Feb Consumer Sentiment Westpac-MI, 4.3%, -4.7% prev
- New Zealand central bank hold rates, signals accommodative policy through 2020
- New Zealand Cash Rate, 1.75%, 1.75% f'cast, 1.75% prev
- Japan Jan Corp Goods Price YY, 0.6%, 1.1% f'cast, 1.5% prev
Economic Data Ahead
- (0430 ET/0930 GMT) Great Britain Jan CPI YY, 1.9% f'cast, 2.1% prev
- (0430 ET/0930 GMT) Great Britain Jan RPI YY, 2.6% f'cast, 2.7% prev
- (0430 ET/0930 GMT) Great Britain Jan PPI Input Prices YY NSA, 3.8% f'cast, 3.7% prev
- (0430 ET/0930 GMT) Great Britain Jan PPI Output Prices YY NSA, 2.2% f'cast, 2.5% prev
- (0430 ET/0930 GMT) Great Britain Jan PPI Core Output YY NSA, 2.3% f'cast, 2.5% prev
- (0500 ET/1000 GMT) EZ Dec Industrial Production YY, -3.2% f'cast, -3.3% prev
- (0500 ET/1000 GMT) EZ Dec Industrial Production MM, -0.4% f'cast, -1.7% prev
Key Events Ahead
- (0330 ET/0830 GMT) Swedish Central Bank announces interest rate decision - Stockholm
- (0500 ET/1000 GMT) Riksbank's Stefan Ingves and Jesper Hansson hold press conference after interest rate decision – Stockholm
- (0850 ET/1350 GMT) FRB Atlanta's Raphael Bostic participates in discussion on economic outlook and monetary policy before European Financial Forum - Dublin
- (0850 ET/1350 GMT) FRB Cleveland's Loretta Mester speaks on "A View From the Federal Reserve" before "What's Next for Kentucky in the Global Economy" 2019 Economic Conference - Lexington
- (1200 ET/1700 GMT) FRB Philadelphia's Patrick Harker speaks on economic outlook before Jewish Business Network Power Lunch - Philadelphia
FX Beat
DXY: The dollar index eased from recent peaks after U.S. President Donald Trump stated that he was disappointed with a deal struck by congressional negotiators on border security that denied him funds for his promised U.S.-Mexican border wall. The greenback against a basket of currencies trades 0.05 percent down at 96.67, having touched a high of 97.20 the day before, its highest since December 17. FxWirePro's Hourly Dollar Strength Index stood at -14.79 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, extending previous session's rebound despite Dutch central bank chief Klaas Knot, one of the hawks on the rate-setting Governing Council, stating that the European Central Bank should take its time in raising interest rates as eurozone growth slowed sharply. The European currency traded 0.1 percent up at 1.1336, having touched a low of 1.1257 on Tuesday, its lowest since Nov. 13. FxWirePro's Hourly Euro Strength Index stood at -66.50 (Bearish) by 0500 GMT. Investors’ attention will remain on Eurozone industrial production data, ahead of the U.S. consumer price index and Fed officials' speeches. Immediate resistance is located at 1.1368 (Feb.7 High), a break above targets 1.1417 (Jan. 25 High). On the downside, support is seen at 1.1289 (Jan. 24 Low), a break below could drag it till 1.1216 (Nov. 13 Low).
USD/JPY: The dollar rallied to a near 7-week peak, amid rising hopes of a breakthrough in U.S.-China trade talks. The major was trading 0.2 percent up at 110.62, having hit a high of 110.70 earlier, its highest since December 28. FxWirePro's Hourly Yen Strength Index stood at -47.26 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. consumer price index and Fed officials' speeches. Immediate resistance is located at 110.94 (Aug. 13 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 109.75 (10-DMA), a break below could take it lower at 109.16 (Jan. 28 Low).
GBP/USD: Sterling steadied above the 1.2900 handle, after Prime Minister Theresa May stated that the government would seek to speed up ratification of its Brexit withdrawal deal with the European Union if time gets too tight. However, the deadlock and delays over the terms of Brexit heightened fears among financial investors. The major traded 0.1 percent up at 1.2906, having hit a low of 1.2832 on Tuesday; it’s lowest since January 21. FxWirePro's Hourly Sterling Strength Index stood at -24.16 (Neutral) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2984 (10-DMA), a break above could take it near 1.3080 (January 23 High). On the downside, support is seen at 1.2827 (November 12 Low), a break below targets 1.2800. 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 to a 1-week peak, after a survey of consumer confidence showed a surprisingly strong comeback in February. The Melbourne Institute and Westpac Bank index of consumer sentiment advanced 4.3 percent in February after plunging 4.7 percent in January. The Aussie trades 0.5 percent up at 0.7132, having hit a high of 0.7135 earlier; it’s highest since February 6. FxWirePro's Hourly Aussie Strength Index stood at 113.55 (Highly Bullish) by 0500 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 by more than 1-percent to hit a 1-week peak after the Reserve Bank of New Zealand sounded less dovish on policy than speculators had wagered on. The central bank left rates on hold at a record low of 1.75 percent at its first monetary policy decision of the year and reiterated that it is likely to keep the official cash rate (OCR) at 1.75 percent through 2019 and 2020. The Kiwi trades 1.6 percent up at 0.6729, having touched a high of 0.6851, its highest level Feb. 6. FxWirePro's Hourly Kiwi Strength Index was at 141.38 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6862 (Jan. 29 High), a break above could take it near 0.6911 (Dec. 11 High). On the downside, support is seen at 0.6706 (Jan. 22 Low), a break below could drag it below 0.6671 (Jan. 4 Low).
Equities Recap
Asian shares jumped to a more than 4-month high, boosted by optimism that the United States and China might be able to agree on a deal to resolve their nearly year-long trade dispute.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei gained 1.3 percent to 21,144.48 points, Australia's S&P/ASX 200 index eased 0.3 percent to 6,063.60 points and South Korea's KOSPI surged 0.5 percent to 2,200.38 points.
Shanghai composite index rose 1.6 percent to 2,713.38 points, while CSI300 index traded 1.7 percent up at 3,387.73 points.
Hong Kong’s Hang Seng traded 0.8 percent higher at 28,397.24 points. Taiwan shares shed 0.1 percent to 10,090.58 points.
Commodities Recap
Crude oil prices surged as producer cartel OPEC said it had cut supply deeply in January and as U.S. sanctions hit Venezuela's oil exports. International benchmark Brent crude was trading 0.7 percent up at $63.00 per barrel by 0450 GMT, having hit a low of $60.58 on Thursday, its lowest since February 1. U.S. West Texas Intermediate was trading 0.5 percent higher at $53.58 a barrel, after falling as low as $51.22 on Monday, its lowest since the January 17.
Gold prices rose, extending previous session gains as investors held onto the safe-haven assets while seeking more clarity on U.S.-China trade talks. Spot gold was 0.2 percent up at $1,312.96 per ounce by 0456 GMT, having touched a low of $1,302.71 on Thursday, its lowest level since Jan. 29. U.S. gold futures gained 0.2 percent to $1,316.2 an ounce.
Treasuries Recap
The Japanese government bonds continued to trade mixed towards the end of Asian session Wednesday, as investors await the country’s gross domestic product (GDP) for the fourth quarter of this year, scheduled to be released today 13 by 23:50GMT amid a surge in global risk sentiments following hopes of a trade deal between the U.S. and China. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped nearly 1 basis point to -0.008 percent, the yield on the long-term 30-year jumped 2 basis points to 0.625 percent while the yield on short-term 2-year plunged 16-1/2 basis points to -0.164 percent.
The Australian government bonds slumped across the curve during Asian trading session after U.S. President Donald Trump softened his stance on trade negotiations overnight, along with tentative progress to avoid another government shutdown. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose about 4 basis points to 2.15 percent, the yield on the long-term 30-year bond also climbed 4 basis points to 2.70 percent and the yield on short-term 2-year jumped over 2-1/2 basis points to 1.77 percent.
The Canadian government bond prices were lower across a steeper yield curve. The two-year fell 2 Canadian cents to yield 1.800 percent and the 10-year declined 14.5 Canadian cents to yield 1.920 percent.
