Market Roundup
- China Jan CPI +0.5% m/m, +1.8% y/y, +0.5% and +1.9% eyed; PPI -0.5%, -5.3%.
- New Zealand Feb ANZ/RM consumer confidence index 119.7, Jan 121.4, well above 100.
- New Zealand Q4 PPI outputs -0.8% q/q, inputs -1.2%, Q3 +1.3%, +1.6%.
- New Zealand Jan job adverts -3.2% m/m, +2.0% y/y however.
- Australia Jan employment -7.9k, unemployment 6.0%, participation 65.2%, +15k, 5.8% and 65.2% eyed, full-time employment -40.6k.
- BoJ Gov Kuroda - NIRP serving to lower Japan rates, boost economy, QQE/NIRP to continue, could ease again, BoJ ETF buys not meant to up stocks, at Y7.8 trln held as of September, economy/prices to rise, recent market turbulence due to China concerns, policies not targeting currency levels.
- BoJ Policy Board Ishida - Nothing on opposition to NIRP, initial comments focused on economy, prices, accommodative BoJ stance to continue, price expectations hard to measure, energy should be stripped, notes global market turbulence, could hurt Japan's economy - Reuters.
- Japan PM Abe - Amid signs of trouble, rules out stimulus spending - Nikkei.
- Japan Jan trade deficit Y645.9 bln, exports -12.9% y/y, imports -18.0%, Y680.2 bln/-11.3%/-16.0% eyed, exports to US -5.3%/China -17.5%/Asia -17.8%, exports down most on y/y basis since Oct '09.
- MoF flow data week-ended Feb 13 - Japanese buy net Y81.8 bln foreign stocks, sell trln bonds, buy Y149.6 bln bills; foreign investors sell net Y562.9 bln Japanese stocks, buy trln bonds, sell Y330.8 bln bills.
- Japan Jan crude import volume -3.4% y/y, LNG -14.1%, biggest drop since '09, thermal coal -13.2%, most other commodity imports down too.
- China DRC Wang Yiming - Downward pressure still on economy, CNY could rise over time if reforms progress, market perceptions change - Reuters.
- Sources - PBOC asks banks about need for MLF loans, lower rates - Reuters.
- St Louis Fed Bullard - Unwise to continue hiking rates amid falling inflation expectations, asset bubble likelihood off, core assumptions behind December rate hike undercut, rate path projections counterproductive? - Reuters.
- Minny Fed Kashkari - Curbing big US banks is not political - Reuters.
- RBA AsstGov Edey - Too much focus on recent market turmoil not good, media unjustifiably gloomy, current low rates supporting growth - Reuters.
Economic Data Ahead
- (0215 ET/0715 GMT) Switzerland Jan trade balance; last bln surplus.
- (0245 ET/0745 GMT) France Jan HICP - final, -1.0% m/m, +0.4% y/y eyed; flash +0.2%, +0.3%.
- (0330 ET/0830 GMT) Sweden Jan CPI, -0.6% m/m, +0.5% y/y eyed; last +0.1%, +0.1%.
- (0330 ET/0830 GMT) Sweden Jan CPIF, -0.5% m/m, +1.3% y/y eyed; last +0.2%, +0.9%.
- (0400 ET/0900 GMT) Eurozone Dec current account bal; last E29.8 bln nsa, E26.4 bln sa surpluses.
- (0400 ET/0900 GMT) Eurozone Dec net investment flow; last E45.2 bln inflow.
- (0830 ET/1330 GMT) United States Feb Philly Fed business sentiment index, -3.0 eyed; last -3.5.
- (0830 ET/1330 GMT) United States w/e initial jobless claims, 275k eyed; last 269k.
- (1000 ET/1500 GMT) United States Jan leading indicators index, -0.2% m/m eyed; last -0.2%.
Key Events Ahead
- N/A European Council meeting in Brussels, other events (till Friday).
- N/A OECD Economic Outlook interim report presentation in Paris.
- (0200 ET/0700 GMT) Riksbank DepGov Jansson presentation in Orebro, Sweden.
- (0355 ET/0855 GMT) BoE DepGov in Brussels panel discussion.
- (0430 ET/0930 GMT) Spain E3-4 bln 0.25/1.15/1.95% 2019/20/26 Bono auctions.
- (0450 ET/0950 GMT) France E6.5-7.5 bln zero and 0.25% 2019 and 2020 BTan auctions.
- (0500 ET/1000 GMT) Riksbank DepGov Ohlsson speech in Malmo, Sweden.
- (0550 ET/1050 GMT) France E0.5-1.0 bln 1.85% and 1.80% 2027 and 2040 OATei auctions.
- (0730 ET/1230 GMT) ECB January meeting minutes.
- (1200 ET/1700 GMT) Norges Bank Gov Olsen annual address.
- (1530 ET/2030 GMT) SF Fed Williams speech at Los Angeles event.
EUR/USD: The euro trades 0.10 percent higher at 1.1138 levels, after going as low as 1.1106 in the previous session. The January FOMC meeting minutes impact is fading away as the pair continues to rise. The downside risks to the U.S. growth outlook were highlighted in the January FOMC meeting minutes. The rebound in oil prices combined with strong U.S. industrial production data aided the greenback to extend its gains in the previous session. The pair trades between a thin range of 1.1118-1.1145. Resistance is seen at 1.1162 (5-DMA), while resistance is located at 1.1086 (Feb 8 Low).
USD/JPY: The dollar trades 0.08 percent lower at 113.97 yen against it Japanese counterpart, as yen was strengthened on BoJ's Ishida's speech, as he sounded optimistic on the Japanese economic outlook. The demand for safe-haven yen was slightly boosted as China's January CPI rose 1.8% y/y, slightly weaker than markets expectation of 1.9% increase, however, was better than Decembers post of 1.6%. Markets now await U.S. unemployment data and Japan's Industry Activity Index release for further cues on the pair. The pair continues to hover towards sessions low of 113.79. Immediate support is located at 113.37 (Previous Session Low), while resistance is seen at 114.87 (Feb 16 High).
USD/CAD: The Canadian dollar touched a two-week high early on Thursday, having benefited hugely from a surge in crude oil prices and a stock market rally. The pair trades at 1.3656 levels, drifting near to a low of 1.3639 hit on Feb. 4. Crude oil rose 7.0 percent after Iran voiced support for a Russia-Saudi-led move to freeze production to deal with a market glut, while Canada's main stock index jumped to its highest since early January. Traders are seen bearish on the U.S. dollar as the pair continues to make fresh session lows. Immediate support is located at 1.3639 (Feb 4 Low), while the pair faces resistance at 1.3773 (5-DMA).
AUD/USD: The Australian dollar initially dropped half a U.S. cent on Thursday after data showed a net 7,900 jobs were lost in January against forecasts of a rise of 15,000. However, the Aussie recovered briefly, after declining to sessions low 0.7134. The pair touched one-week peak of 0.7186 on Wednesday after a jump in oil prices underpinned the commodity currency block. Currently its trades at 0.7159, drifting away from sessions low. Resistance is located at 0.7186 (Previous Session High), while support is seen at 0.7134 (Sessions Low).
NZD/USD: The New Zealand dollar rose to 0.6667, benefiting from improving oil prices and risk appetite. The kiwi extended gains, pulling well away from a two-week trough of 0.6545 struck on Tuesday. Markets remain focused on the sentiment around oil market and global equities ahead of the US weekly jobless claims due for release later in the day. On the upside, resistance is located at 0.6675 (Feb 16 High) , while on the downside, support is seen at 0.6615 (Feb 12 Low).
USD/CNY: The yuan edged up against the dollar on Thursday after the central bank set the midpoint rate at 6.5152 per dollar prior to market open, firmer than the previous fix of 6.5237. The spot market opened at 6.5227 per dollar and was trading at 6.5174 at midday, strengthening 0.18 percent from the previous close, while the offshore yuan was trading 0.05 percent weaker than the onshore spot at 6.5206 per dollar. China's consumer price index rose 1.8 percent in January from a year earlier, slightly weaker than market expectations of 1.9 percent, but was up from a 1.6 percent increase in December.
Equities Recap
Asian stocks rose across the board on Thursday as crude oil extended gains on hopes that big producers will cap production, improving investor sentiment for riskier assets.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.4 percent, pulling further away from a three-week low hit last week. Shanghai stocks rose 0.3 percent, in muted reaction to data showing China's January consumer inflation increasing to 1.8 percent from the previous year.
Australia's S&P/ASX 200 Index advanced 2.17 pct at 4,987.80 points, while Nikkei climbed 2.28 pct at 16,196.80, with Seoul Shares edged up 1.09 pct.
Commodities Recap
Gold on Thursday held on to overnight gains that helped the metal snap a three-day losing streak on bets the Federal Reserve could slow the pace of U.S. interest rate hikes. Spot gold was little changed at $1,208.20 an ounce by 0212 GMT, after gaining 0.7 percent on Wednesday.
Oil crude futures rose in early Asian trade on Thursday after Iran welcomed plans by Russia and Saudi Arabia to cap crude oil production at January levels, extending steep gains in the previous session. Brent futures added 32 cents to $34.82 a barrel by 0144 GMT, after surging 7.2 percent in the previous session to close up $2.32, while U.S. crude rose 50 cents to $31.16 a barrel, having surged 5.6 percent in the previous session.
Treasuries Recap
U.S. 10-Year Treasuries Yield stood at 1.809 percent versus previous close of 1.817 percent.
Australian government bond futures declined, with the 3-year bond contract off 1 tick at 98.170. The 10-year contract dropped 4.5 ticks to 97.4650 in a bearish steepening of the curve, while the 20-year contract decreased 7.5 ticks to 96.9200.
New Zealand government bonds eased sending yields 4 basis points higher at the long end.
Canadian government bond prices were lower across the maturity curve, with the benchmark 10-year declining 22 Canadian cents to yield 1.179 percent, with the 2-year price down 4.5 Canadian cents to yield 0.484 percent.
