Market Roundup
- Singapore Nov Industrial Production Revised to -6.4 Pct Y/Y Vs -5.5 pct previously
- Singapore Dec Industrial Production -7.9 Pct Y/Y (Reuters Poll -7.0 Pct)
- Singapore Dec Industrial Production +2.0 Pct M/M Seasonally Adjusted (Reuters Poll +1.2 Pct)
- Thai 2015 Exports -5.78 Pct - Commerce Ministry
- Thai Dec Customs-Cleared Trade Balance +1.49 Bln Dlrs (Vs +1.01 Bln Dlrs in Reuters Poll) - Commerce Ministry
- Thai Dec Customs-Cleared Imports -9.23 Pct Yr/Yr (Vs -5.05 Pct in Reuters Poll) - Commerce Ministry
- Thai Dec Customs-Cleared Exports -8.73 Pct Yr/Yr (Vs -7.20 Pct in Reuters Poll) - Commerce Ministry
- Philippines says November Trade Balance -976.9 Million Dollars
- Philippines says November Imports +10.1 Pct from A Year Earlier
- Japan EconMin Amari - BoJ doesn't signal monetary easing in advance, BoJ won't be as bold as ECB, BoJ will take appropriate steps when needed - RTRS.
- FinMin Aso - Hopes BoJ continues efforts to achieve 2% CPI target, BoJ will do whatever it takes if needed, Japan fundamentals not bad at all - Reuters.
- Japan Dec corp service price index +0.1% m/m, +0.4% y/y to 103.1.
- China PBOC injects Yuan 440 bln via reverse report, biggest daily injection in three years - Reuters.
Economic Data Ahead
- (0200 ET/0700 GMT) Switzerland Dec trade balance, CHF2.9 bln surplus forecast; last bln surplus.
- (0330 ET/0830 GMT) Sweden Dec PPI; last -0.1% m/m, -1.5% y/y.
- (0900 ET/1400 GMT) United States Nov CS 20, +0.1/0.8% nsa/sa m/m, +5.7% y/y forecast; last +0.1/+0.8/+5.5%.
- (0900 ET/1400 GMT) United States Nov FHFA monthly home price; last +0.5% m/m, +6.1% y/y, index 227.5.
- (0945 ET/1445 GMT) United States Jan Markit PMI services - flash, 54.0 forecast; last 54.3.
- (0945 ET/1445 GMT) United States Jan Markit PMI composite - flash; last 54.0.
- (1000 ET/1500 GMT) United States Jan consumer confidence index, 96.5 forecast; last 96.5.
- (1000 ET/1500 GMT) United States Jan Richmond Fed mfg shipments/services/comp indices; last 0, 0, 6.0.
- (1030 ET/1530 GMT) United States Jan Dallas Fed services rev, Texas outlook indices; last 15.2, 3.3.
Key Events Ahead
- Australia markets closed for Australia Day.
- N/A EU Vestager, Italy FinMin Padoan meeting in Brussels.
- N/A Spain 3/9-month treasury bill auctions.
- (0430 ET/0930 GMT) ECB 0.05% 7-day refi, E68 bln allotment forecast, last bln.
- (0500 ET/1000 GMT) BoE Gov Carney, Brazier, Furse, Taylor parliamentary testimony.
- (0500 ET/1000 GMT) Italy E1-1.5 bln '17 CTZ, E0.5-1 bln 2.35/3.1% 2024/26 BTPei auctions.
- (0700 ET/1200 GMT) Finland FinMin Stubb Helsinki press conference on economy.
- (0700 ET/1200 GMT) Slovakia CB quarterly macroeconomic forecasts.
- (0800 ET/1300 GMT) BoE MPC Forbes speech at London event.
- N/A FOMC begins two-day policy meeting.
FX Beat
USD: The dollar held close to its recent trading ranges early in Asian trade on Tuesday, with investors cautiously awaiting the outcome of the Federal Reserve's two-day policy meeting amid the backdrop of stressed financial markets and slow global growth. Against a basket of currencies, the dollar index was up 0.02 percent at 99.29.
EUR/USD: The euro trades flat at 1.0848 against the dollar, having touched sessions low of 1.0841. However, the pair continues to trade above last week's 2-week low of 1.0776 but still undermined by growing expectations that the European Central Bank will take more easing steps. On Monday Draghi assured to increase inflation, rejecting criticism of the central bank's loose monetary policy and arguing that sluggish growth in prices was damaging the euro zone economy. Markets now price in a 10-basis-point cut in the ECB's -0.3 percent deposit rate in March, while investors also expect the central bank to increase its monthly asset purchases. The pair faces immediate resistance at 1.0869 (10 - DMA), while support is seen at 1.0834 (Jan 14 Low).
USD/JPY: The dollar edged down slightly against the yen at 117.94, but remained above a 1-year low of 115.97 hit last week, while investors focus upon the Bank of Japan's two-day meet that will end on Friday. Markets remain wary over the BOJ easing prospects, while Wednesday's FOMC decision also keeps investors concerned whether the Fed will pursue further rate hikes. U.S. consumer confidence and flash services PMI data will be watched for fresh cues. The yen is seen benefiting amid declining equities and oil prices, further putting downward pressure on the pair. Immediate support is seen at 117.72 (15 - DMA), while on the upside, resistance is located at 118.35 (Session's High).
AUD/USD: The Australian Dollar trades 0.26 percent lower at 0.6935 as crude oil futures dropped 6 percent after Iraq announced record-high oil production, pumping into a heavily oversupplied market, while the officials of the Organization of the Petroleum Exporting Countries signaled that they were unlikely to reduce crude production unless non-OPEC countries did likewise. Amid declining commodity prices and growing concerns over Chinese economy, markets will shift their attention towards Fed's Monetary Policy Statements. Light trading likely to prevail in this session as the Australian traders are away on a public holiday. The Aussie moves within a thin range of 0.6932 - 0.6967. Immediate support is seen at 0.6910 (Jan 14 Low), while resistance is located at 0.6983 (17 - DMA). Against the yen, it trades at 81.72 levels, hovering towards session low of 81.68.
NZD/USD: The New Zealand dollar was slightly lower in the early trade on Tuesday, after riskier assets retreated amid renewed selling in oil markets. The kiwi trades flat at 0.6441 level after going as low as 0.6424. New Zealand's central bank is widely expected to keep rates unchanged on Thursday but economists are expecting the statement to point towards more rate cuts. The collapse in oil prices and slow global growth have stoked deflationary pressures across emerging and developed economies, and have raised the chances of more monetary easing. Support is seen at 0.6418 (Jan 14 Low) on the downside, while on the upside, resistance is located at 0.6491 (Jan 15 High). The kiwi trades at 75.90 levels, against its Japanese counterpart.
USD/CNY: China's yuan was flat against the dollar on Tuesday as the central bank set the midpoint rate at 6.5548 per dollar prior to market open, only 0.01 percent firmer than the previous fix 6.5557, while traders expected the stability of the yuan to last until the Chinese Lunar New Year. The spot market opened at 6.5791 per dollar and was trading at 6.5794 at midday, while the offshore yuan was trading 0.54 percent softer than the onshore spot at 6.615 per dollar. The onshore market will be closed for one week for the Chinese Lunar New Year, which falls on Feb. 8, while the offshore market will keep trading. In order to stabilise the yuan, China and Japan are working to create a new framework to bring together the government and central bank officials to discuss over economic policy coordination.
Equities Recap
Asian shares retreated and oil prices resumed their descent on Tuesday as investors took profits on rebounds over the last two days as fears of a global economic slowdown showed no signs recovery. Australia markets closed for Australia Day.
MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.9 percent after two days of gains since late last week, while Taiwan stocks close down 0.8 pct at 7,828.67 points.
Tokyo's Nikkei dropped 2.35 pct at 16,708.90 points, while Seoul Shares edged down 1.19 pct.
Commodities Recap
Gold advanced to a 2-week high on Tuesday as falling equities burnished bullion's safe-haven draw, and the dollar came under pressure as the Federal Reserve meets against a backdrop of a slowing global economy. Gold demand strengthened as risk appetite soured again due to equities and crude oil resumed their decline. Spot gold touched a session peak of $1,111.26 an ounce, and was up 0.3 percent at $1,110.86 by 0313 GMT, while U.S. gold for February delivery edged up 0.6 percent to $1,111.50 an ounce. Spot platinum was down 0.3 percent at $855.74 an ounce, while spot palladium dropped 0.3 percent to $488.50 an ounce, with silver gaining 0.2 percent to $14.27.
Crude futures extended losses on Tuesday to retest the $30 a barrel level, as fresh worries about oversupply from top producers Saudi Arabia and Iraq concerned the market. Global benchmark Brent crude lost 44 cents to $30.06 a barrel by 0332 GMT after hitting a session low of $30. It settled down $1.68 at $30.50 in the previous session. U.S. crude dropped 52 cents to $29.82 a barrel, after hitting a session low at $29.61.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 1.9977 down by 0.024.
New Zealand government bonds eased, sending yields 1.5 basis points higher across the curve.
Canadian government bond prices were higher across the maturity curve, with the benchmark 10-year rising 61 Canadian cents to yield 1.251 percent, while the 2-year priced up 8 Canadian cents to yield 0.416 percent. The Canada-U.S. 10-year bond spread was 2.7 basis points more negative at -75.7 basis points, trimming underperformance last week by Canadian government bonds.
