Market Roundup
• Fed: holds interest rates steady, remains upbeat on economy; job gains still solid, inflation rising.
• Fed: repeats will reinvest principal pmts until rate normalization well under way, near-term risks roughly balanced.
• US private sector adds 246k jobs in Jan v 165k forecast -ADP.
• US Markit Jan Mfg PMI final 55 v 55.1 previous.
• US dips unexpectedly in Dec, -0.2% v 0.2% forecast, 0.9% previous.
• US ISM Mfg PMI 56 v 55 forecast, 54.6 previous; Mfg employment index 56.1 v 53.1 forecast, 52.8 previous.
• Atlanta Fed’s GDPNow forecast Q1 GDP at 3.4% vs 2.3% Jan 31.
• Euro Zone factories started ‘17 with the fastest growth in nearly 6-yrs, PMI 55.2 v 55.1 previous, Mfg growth strongest since Apr. ’11.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Foreign Bond Investment w/e -539.0b-previous
• 23:50 Japan Foreign Invest JP Stock w/e -376.1b- previous
• 05:00 Japan Consumer Conf. Index* Jan 43.1- previous
• 22:30 Australia AIG Manufacturing Index Jan 55.4- previous
• 00:30 Australia Building Approvals* Dec forecast-2%, 7.00%- previous
• 00:30 Australia Private House Approvals* Dec -0.20%- previous
• 00:30 Australia Trade Balance G&S (A$)* Dec forecast 2200m, 1243m- previous
• 00:30 Australia Goods/Services Imports* Dec 0.00%- previous
• 00:30 Australia Goods/Services Exports* Dec 8.00%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0681 levels and currently trading at 1.0766 levels. The pair has made session high at 1.0791 and hit lows at 1.0729 levels. Euro declined against the dollar on Wednesday as the greenback was buoyed by strong readings on U.S. employment and the Federal Reserve released an upbeat statement on the health of the U.S. economy. The Fed left rates unchanged in its first meeting since President Donald Trump took office, but its relatively upbeat outlook suggested it was on track to tighten monetary policy this year. The dollar index, which measures the greenback against a basket of six major rivals, rose as much as 0.6 percent to a session high of 100.040 after tumbling to a more than seven-week low of 99.430 on Tuesday and finishing its worst January in three decades. The greenback remained positive on the day in the wake of the ADP National Employment Report, which showed U.S. private employers added 246,000 jobs in January and the Institute for Supply Management's survey showing its index of national factory activity rose to 56 last month. The euro sank more than 0.4 percent to a session low of $1.0768 after touching a more than seven-week high of $1.0811 on Tuesday.
GBP/USD is supported in the range of 1.2540 levels and currently trading at 1.2660levels. It reached session high at 1.2680 and dropped to session low at 1.2613 levels. Sterling rose against the dollar on Wednesday as pound was driven by a combination of solid data and greater political certainty over the Brexit process which has encouraged a trimming of big financial bets against the pound. UK manufacturing started 2017 with strong growth. The Market/CIPS UK Manufacturing Purchasing Managers' Index (PMI) edged down to 55.9 from December's 2-1/2 year peak of 56.1, matching the consensus forecast. The survey out on Wednesday suggested Britain's economy continues to expand at a solid rate after outpacing its rivals last year, with the PMI's gauge of factory output pointing to the fastest growth since May 2014.Meanwhile, Members of parliament conclude a two-day debate on Brexit with a vote at 1900 GMT that so far looks set to proceed with the government's plan to launch talks on leaving the European Union by the end of March.
AUD/USD is supported around 0.7540 levels and currently trading at 0.7581 levels. It hit session high at 0.7594 and made session lows at 0.7550 levels. The Australian dollar strengthened against the dollar on Wednesday after U.S. dollar trimmed gains as Federal Reserve did not take a more hawkish stance on interest rate increases, though stronger-than-expected U.S. economic data buoyed the greenback. U.S. private employers added 246,000 jobs in January, above the 165,000 median forecast, according to the ADP National Employment Report. In a statement following its two-day meeting, the Fed painted a relatively upbeat picture of the U.S. economy that suggested it was on track to tighten monetary policy this year, though it gave no firm signal on the timing of its next rate move.The Australian dollar was last trading at $0.7585. It faces stiff chart resistance at 76 U.S. cents, a level it has breached twice in the past month but failed to stay above that level for an entire session. The currency has remained in a tight trading range between 75-76 U.S. cents over the past 12 sessions. Analysts say a break above $0.7610/20 would open the way for a jump to $0.7720/40.
USD/CAD is supported at 1.3000 levels and is trading at 1.3053 levels. It has made session high at 1.3101 and lows at 1.3033 levels. The Canadian dollar strengthened against its U.S. counterpart on Wednesday after oil prices surged on geopolitical concerns after Iran confirmed a ballistic missile test and bulls found support in reports on production cuts. The loonie rose 3.2 percent in January after climbing 3.1 percent in 2016. On Tuesday, it touched its strongest level since Sept. 9 at C$1.2969, helped by data that showed the economy expanded at a faster-than-expected pace in November. On the data front, The Canadian manufacturing sector grew at its fastest pace in over two years in January. The Canada Manufacturing Purchasing Managers' index (PMI), a measure of manufacturing business conditions, rose to a seasonally adjusted 53.5 last month from 51.8 in December, its highest level since December 2014. A reading above 50 shows growth in the sector. The Canadian dollar was last trading at C$1.3045 to the greenback, or 76.48 U.S. cents, weaker than Tuesday's official close of C$1.3012, or 76.85 U.S. cents.
Equities Recap
European shares snapped a three-day losing streak on Wednesday, led higher by miners and industrial stocks following solid corporate results and strong data from China and Europe.
UK's benchmark FTSE 100 closed flat, the pan-European FTSEurofirst 300 ended the day up by 0.80 percent, Germany's Dax ended up by 1 percent, France’s CAC finished the day up by 0.9 percent.
The S&P 500 edged higher on Wednesday to cap a four-day losing streak, buoyed by gains in Apple shares and after the Federal Reserve kept U.S. interest rates unchanged, as expected.
Dow Jones closed up by 0.13 percent, S&P 500 ended up 0.02 percent, Nasdaq finished the day up by 0.49 percent.
Treasuries Recap
U.S. Treasury prices pared losses on Wednesday after the Federal Reserve kept interest rates unchanged and painted a relatively upbeat picture of the U.S. economy, without adopting a very hawkish tone.
Benchmark 10-year notes were down 6/32 in price to yield 2.47 percent, down from around 2.49 percent before the Fed statement, and up from 2.45 percent late on Tuesday.
Commodities Recap
Gold gave up some of its losses on Wednesday as the dollar pared gains after the U.S. Federal Reserve held interest rates unchanged at its first meeting since President Donald Trump's inauguration.
Spot gold was down 0.08 percent at $1,209.58 an ounce by 2:39 p.m. EST (1939 GMT), after touching a session low of $1,197.73.U.S. gold futures settled down 0.3 percent at $1,208.30 prior to the statement.
Crude futures rallied late Wednesday, jumping more than $1 a barrel after briefly trading lower on a bearish U.S. government report early in the day.
Brent crude settled up $1.22 a barrel at $56.80. U.S. crude settled up $1.07 a barrel at $53.88.
