Market Roundup
- EU Dijsselbloem: EZ extended Greek bail-out by four months, end-April deadline for agreement on planned Greek reforms.
- Greece expects EU and IMF partners to accept reform promises.
- BoJ Gov Kuroda: Sticks to script, CPI to accelerate, likely achieve target in fiscal year centering next year, hinge on crude oil prices.
- South Korea central bank considering use of forex reserves to protect against any financial crisis.
- Aussie hovered near a one-month high against the yen at 93.25, having gained 0.7 percent on Friday.
- Euro was little changed at $1.1381 after rising to as high as $1.1430 from a low of $1.1277 on Friday.
- Oil prices dropped after Lunar New Year as US inventories hit record highs.
Economic Data Ahead
- (0400 ET/0900 GMT) Germany Feb Ifo business climate index, 107.7 consensus; previous 106.7.
- (0400 ET/0900 GMT) Germany Feb Ifo current conditions index, 112.7 consensus; previous 111.7.
- (0400 ET/0900 GMT) Germany Feb Ifo expectations index, 103.0 consensus; previous 102.0.
- (0600 ET/1100 GMT) UK Feb CBI distributive trades survey index, 34.0 consensus; previous 39.0.
- (0830 ET/1330 GMT) US Jan Chicago Fed national activity index; previous -0.05.
- (1000 ET/1500 GMT) US Jan exist. home sales, 4.97 mln AR consensus; previous 5.04 mln.
- (1030 ET/1530 GMT) US Feb Dallas Fed mfg business index; previous -4.4.
Key Events Ahead
- N/A Swiss FinMin Widmer-Schlumpf, Italy FinMin Padoan to sign tax agreement.
- N/A Germany E1.5 bln 12-mo Bubill, France 3/6/12-mo BTF auctions.
- (0845 ET/1345 GMT) ECB Mersch in LSE/Goldman Sachs-organized panel discussion in London.
- (0930 ET/1430 GMT) UK ChancExch Osborne, German FinMin Scaheuble in London panel discussion.
FX Recap
EUR/USD rose to 1.1411 at Asia's open from 1.1380 (NY close on Friday). However, its reaction to the EU-Greece deal was short-lived and was seen in a holding pattern in 1.1370-90 range. The markets still remain wary about Greece's future despite a conditional loan extension decision made last week. If Greece satisfies the troika with fresh reforms promises, the pair might get a boost.
USD/JPY traded in the red at 118.91, the day's low, with day's high at 119.16. The pair continues trading in a thin range as BOJ minutes did not have significant impact on the pair. On the topside, immediate resistance is seen at 119.20 levels, a break above could push the pair to 119.44 levels. On the flipside, the pair might find support at 118.60 levels.
AUD/USD was seen on a firmer footing on Monday and rose to 0.7847, from Friday's low of 0.7789. The pair remains vulnerable to falling interest rates in Australia and sees a rise in bearish positions. Key resistance is located at 0.7875-85 and it is expected to stay weak except for a break above this level.
NZD/USD traded at 0.7515, down 0.2 percent and continued its choppy trade 0.7525 levels, as selling of the NZD against its counterpart AUD weighed in a quiet start to the week. It hit a four-week high of 0.7574 last week, and is now looking for new boost which might come from Yellen. The pair is likely to find support at 0.7485 and resistance at 0.7500.
