Market Roundup
- Japan Jan trade deficit Y943.4 bln, Y1.0022 trln eyed
- Japan Jan Exports YY, 12.2% vs 9.3%, 10.3% forecast
- Japan Jan Imports YY, 7.9% vs 14.9%, 8.3% forecast
- Japan Feb Reuters Tankan mfg index +29, non-mfg +33, Jan +35/+33, May +30/+30 eyed
- Two-thirds of Australians want deputy PM to resign over sex scandal-poll
- Australia, U.S., India and Japan in talks to establish Belt and Road alternative
- New Zealand pushes for text of reinvigorated Trans-Pacific trade pact to go public this week
- Leading SPD mayors back coalition with Merkel, poll shows
- Gearing up for rate hike, UK households turn gloomier on finances - survey
Economic Data Ahead
- (0400 ET/0900 GMT) Euro Zone Current Account NSA,EUR
- (0400 ET/0900 GMT) Euro Zone Current Account SA, EUR
Key Events Ahead
- (0540 ET/1040 GMT) Netherland E1.0-2.0/E1.0-2.0 bln for 3/6 month auction
- (0855 ET/1355 GMT) France E2.9-3.3/E1.2-1.6/E1.1-1.5 bln for 3/6/12 month auction
- FX Beat
DXY: The dollar index retreated from 3-year lows hit in the previous session as the two-year U.S. yield hit its highest level since 2008 last week. The greenback against a basket of currencies traded 0.1 percent up at 89.12, having touched a low of 88.25, its lowest since Dec. 2014. FxWirePro's Hourly Dollar Strength Index stood at 2.07 (Neutral) by 0500 GMT.
EUR/USD: The euro steadied after easing from a 3-year peak in the previous session, as the greenback rebounded from its lowest levels since December 2014. The European currency traded 0.1 percent up at 1.2414, having touched a high of 1.2555 on Friday, its highest since Dec 2014. FxWirePro's Hourly Euro Strength Index stood at -95.15 (Slightly Bearish) by 0500 GMT. Investors’ attention will remain on Eurozone current account, with the US markets closed for Presidents Day today. Immediate resistance is located at 1.2450, a break above targets 1.2500. On the downside, support is seen at 1.2365 (21-DMA), a break below could drag it lower 1.2245 (Feb 7 Low).
USD/JPY: The dollar extended its previous session rebound as investors bet the Federal Reserve will raise interest rates at its next policy meeting in March. The major was trading 0.3 percent up at 106.57, having hit a low of 105.55 on Friday, its lowest since Nov. 2016. FxWirePro's Hourly Yen Strength Index stood at 61.88 (Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, as the U.S. remains closed on account of Presidents Day. Immediate resistance is located at 107.45 (61.8% retracement of 110.48 and 105.74), a break above targets 108.02 (0.5% retracement). On the downside, support is seen at 105.40, a break below could take it lower 105.05.
GBP/USD: Sterling continued to slump after the UK Telegraph reported comments from European Parliament’s Chief Brexit coordinator Guy Verhofstadt, citing that Britain will be heading into Brexit day without a finalized trade agreement in place with the EU. The major traded 0.1 percent down at 1.4022, having hit a high of 1.4144 on Friday, it’s highest since Feb 5. FxWirePro's Hourly Sterling Strength Index stood at 21.58 (Neutral) by 0500 GMT. Immediate resistance is located at 1.4150 (Feb 5 High), a break above could take it near 1.4278 (Feb 2 High). On the downside, support is seen at 1.3971 (5-DMA), a break below targets 1.3937 (10-DMA). Against the euro, the pound was trading 0.1 percent down at 88.50 pence, having hit a low of 89.19 pence on Wednesday, it’s lowest since Jan. 12.
AUD/USD: The Australia dollar held firm above the 0.7900 handle as the Reserve Bank of Australia last week said it expected wage growth to accelerate only very gradually, suggesting it would take a substantially higher outcome to alter the outlook for steady rates. The Aussie trades 0.1 percent up at 0.7918, having hit a high of 0.7988 on Friday; it’s highest since Feb 2. FxWirePro's Hourly Aussie Strength Index stood at -4.08 (Neutral) by 0500 GMT. Immediate support is seen at 0.7900, a break below targets 0.7869 (10-DMA). On the upside, resistance is located at 0.7988, a break above could take it near 0.8044.
NZD/USD: The New Zealand dollar steadied after rising to a 7-month high in the previous session, as the U.S. market stayed closed in observance of President's Day. The Kiwi trades 0.1 percent up at 0.7395, having touched a high of 0.7437 on Friday, its highest level since August 2017. FxWirePro's Hourly Kiwi Strength Index was at 83.51 (Slightly Bullish) by 0500 GMT. Immediate resistance is located at 0.7450, a break above could take it near 0.7520. On the downside, support is seen at 0.7340 a break below could drag it near 0.7319 (21-DMA).
Equities Recap
Asian shares rose as investors sentiment improved gradually, while the greenback rebounded from recent lows on speculation that Federal Reserve will raise interest rates at its next policy meeting in March.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.5 percent.
Tokyo's Nikkei gained 1.9 percent to 22,149.21 points, Australia's S&P/ASX 200 index rose 0.7 percent to 5,941.60 points and South Korea's KOSPI advanced 0.9 percent to 2,442.82 points.
Commodities Recap
Crude oil prices rose to a near 2-week peak amid worries over tensions in the Middle East. International benchmark Brent crude was trading 0.8 percent up at $65.41 per barrel by 0500 GMT, having hit a high of $65.42 on earlier, its highest since Feb. 8. U.S. West Texas Intermediate was trading 1.3 percent up at $62.44 a barrel, after rising as high as $62.52 earlier, its strongest since Feb. 8.
Gold prices consolidated within a narrow range on a softer U.S. dollar and as investors bought the safe-haven metal as a hedge against inflation. Spot gold traded flat at $1,347.70 an ounce at 0504 GMT, after touching its highest level since Jan. 25 at $1,361.62 on Friday. U.S. gold futures slipped 0.2 percent to $1,353.10 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.873 percent, while 5-year yield was at 2.627 percent.
The Japanese government bonds traded tad lower, following better-than-expected trade balance data for the month of January, released overnight, in contrast to the Reuters Tankan manufacturers’ survey for this month, which showed a decline in the figures. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.06 percent, the yield on the long-term 30-year note remained flat at 0.79 percent and the yield on short-term 2-year traded tad lower at -0.15 percent.
The Australian bonds gained on the first day of the trading week after the U.S. 10-year Treasury yield retreats from 4-year high. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 2 basis points to 2.879 percent, the yield on the long-term 30-year note also declined 2 basis points to 3.510 percent and the yield on short-term 3-year down 1/2 basis point to 2.131 percent.
The New Zealand 10-year government bonds closed narrowly mixed Monday as investors wait to watch the country’s GlobalDairyTrade price auction, scheduled to be held on February 20 and the retail sales for the fourth quarter of 2017, due on February 22 by 21:45GMT. 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 2.99 percent, the yield on 20-year hovered around 3.50 percent and the yield on short-term 2-year closed steady at 1.88 percent.
