Market Roundup
- BOJ keeps monetary policy steady – Reuters
- BOJ maintains short-term interest rate target at -0.1 pct
- BOJ maintains 10-year JGB yield target around zero pct
- BOJ revises up its estimate on potential growth to around 0.5% from 0-0.5%
- BOJ leaves unchanged pledge to buy JGB’s more or less at current pace so its holdings increase at annual pace of around 80 trillion yen
- BOJ extends deadline for loan programme aimed at boosting lending, supporting industries with growth potential
- BOJ: debt buying for loan programme extended by 1 year
- BOJ quarterly report: Japan economy continues moderate recovery trend
- BOJ quarterly report: risks to economy, prices tilted to downside
- BOJ quarterly report: BOJ to maintain QQE with yield curve control until needed to stably achieve 2 pct inflation
- Japan Dec industrial output rises 0.5 pct mth/mt – Reuters
- Japan manufacturers see Jan output +3.0 pct m/m – Reuters
- Japan manufacturers see Feb output +0.8% - Reuters
- Japan Finmin Aso: G7/G20 make it rule that FX issues should be discussed by currency authorities - Reuters
- Japan Finmin Aso: important to keep close communication on currencies with US –Reuters
- Japan Finmin Aso: agree with general view that weak yen/strong dollar will continue for a while Reuters
- Australia business conditions index in Dec at 11 from 5 previous - NAB
- Australia business confidence at 6 from 5 – NAB
- Australia Dec private sector credit +0.7% from +0.5% - RBA
- Australia Dec housing credit +0.5% from +0.5 – RBA
- New Zealand migration +11.1% from +11.0% prior- Stats NZ
- New Zealand permanent/long term migration +6.1k after +6.2k prior-Stats NZ
- Trump fires acting U.S. attorney general after she refuses to enforce immigration order – Reuters
Economic Data Ahead
- (0130 ET/0630 GMT) France GDP Preliminary QQ Q4 last 0.20%
- (0300 ET/0700 GMT) Norway Credit Indicator YY* Dec last 4.80%
- (0245 ET/0745 GMT) France Consumer Spending MM last 0.4%
- (0245 ET/0745 GMT) France Producer Prices MM Dec last 0.80%
- (0245 ET/0745 GMT) France CPI (EU Norm) Prelim YY Jan last 0.80%
- (0300 ET/0800 GMT) Spain HICP Flash YY Jan last 1.4%
- (0400 ET/0900 GMT) Germany Unemployment Rate SA last 6%
- (0400 ET/0900 GMT) Italy Unemployment Rate Dec last 11.9%
- (0400 ET/0900 GMT) Germany Unemployment Chg SA last -17k
- (0400 ET/0900 GMT) Germany Unemployment Total NSA last 2.57mil
- (0400 ET/0900 GMT) Norway CB Currency Purchase last -1000mil
- (0400 ET/0900 GMT) Germany Unemployment Total SA last 2.64mil
- (0400 ET/0900 GMT) Spain Current Account Balance last 2.0bil
- (0430 ET/0930 GMT) Great Britain M4 Money Supply last 0.4%
- (0430 ET/0930 GMT) Great Britain Mortgage Approvals last 67.51k
- (0430 ET/0930 GMT) Great Britain BOE Consumer Credit last 1.93bil
- (0430 ET/0930 GMT) Great Britain Mortgage Lending last 3.16bil
- (0500 ET/1000 GMT) Eurozone GDP Flash Prelim YY last 1.7%
- (0500 ET/1000 GMT) Eurozone Inflation, Flash % last 1.1%
- (0500 ET/1000 GMT) Italy Producer Prices MM Dec last -0.1%
- (0500 ET/1000 GMT) Eurozone Unemployment Rate Dec last 9.8%
- (0500 ET/1000 GMT) Eurozone Inflation Ex Food & Enr Flash last 0.9%
- (0500 ET/1000 GMT) Italy Producer Prices YY*Dec last -0.3%
- (0500 ET/1000 GMT) Eurozone GDP Flash Prelim QQ Q4 last 0.3%
- (0830 ET/1330 GMT) Slovakia C/A Balance EUR mln EU Nov last 114mil
Key Events Ahead
- (0530 ET/1030 GMT) UK 9Y 2.25Bil 1.500% 22/07/26 TAP
FX Beat
DXY: The dollar eased across the board as the U.S. President Donald Trump's tough stance on immigration continued to benefit safe-haven assets. The greenback against a basket of currencies traded 0.05 percent down at 100.33, having hit a high of 101.02 in the previous session, its highest since Jan. 20. FxWirePro's Hourly Dollar Strength Index stood at -27.87 (Neutral) by 0500 GMT.
EUR/USD: The euro edged up after declining to a near 2-week low in the previous session, as the U.S. President Donald Trump's stance on immigration continued to weigh on the greenback. Markets attention now shifts on Eurozone preliminary CPI release, which is likely to show the cost of living rose 1.5 percent in January from 1.1 percent in December. The European currency traded 0.1 percent up at 1.0698, after falling as low as 1.0620 on Monday, it’s lowest since Jan 19. FxWirePro's Hourly Euro Strength Index stood at -88.67 (Slightly Bearish) by 0400 GMT. Investors’ focus remains on series of economic data from the Eurozone economies, ahead of the continent's gross domestic product, unemployment and consumer price index figures for further momentum on the major. Immediate resistance is located at 1.0750, a break above targets 1.0800. On the downside, support is seen at 1.0657 (Jan 26 Low), a break below could drag it lower 1.0650.
USD/JPY; The Japanese yen rose, extending gains for the second straight day, after the Bank of Japan kept monetary policy unchanged and maintained its optimistic price forecasts, indicating that a steady economic recovery will boost inflation to its 2 percent target. The major trades 0.15 percent down at 113.56, after rising as high as 115.03 last week, it’s strongest since Jan. 20. FxWirePro's Hourly Yen Strength Index stood at 126.25 (Highly Bullish) by 0400 GMT. Investors will continue to digest the BoJ's policy decision, ahead of BoJ Governor Kuroda’s presser and the U.S. macroeconomic fundamental drivers. Immediate resistance is located at 114.00, a break above targets 114.81 (21-DMA). On the downside, support is seen at 113.00, a break below could take it near 112.50.
GBP/USD: Sterling rose after declining in the previous three sessions, as the dollar fell across the board amid risk-off market sentiment. Sterling trades 0.2 percent higher at 1.2507, after slumping to a low of 1.2465 on Monday, it’s weakest since Dec. 24. FxWirePro's Hourly Sterling Strength Index stood at -127.48 (Highly Bearish) by 0400 GMT. Investors’ now await the UK mortgage approvals and consumer credit figures, ahead of the U.S. Chicago PMI and consumer confidence data. Immediate resistance is located at 1.2551 (5-DMA), a break above could take it near 1.2600. On the downside, support is seen at 1.2420, a break below targets 1.2400. Against the euro, the pound trades 0.1 percent up at 85.51 pence, having hit a low of 85.78 the day before, it’s weakest since Jan. 25.
AUD/USD: The Australian dollar attempted a minor recovery above the 0.7550 handle after data showed the economy's business conditions improved in the month of December. According to National Australia Bank, the business conditions rose to 11 versus previous 5, while business confidence edged up to 6 from 5. The Aussie trades 0.14 percent up at 0.7564, drifting closer to a high of 0.7609 hit last week, it’s strongest since Nov. 11. FxWirePro's Hourly Aussie Strength Index stood at 55.05 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of the U.S. economic data. Immediate support is seen at 0.7521, a break below could drag it lower 0.7500. On the upside, resistance is located at 0.7600, a break above targets 0.7650.
NZD/USD: The New Zealand dollar rose towards the 0.7300 handle, extending gains for the third consecutive session, as the U.S. dollar weakened on concerns over Trump’s economic policies. Moreover, the major was also supported by upbeat visitor arrivals report, which edged up 11.1 percent in December from 11.0 percent in November. The Kiwi trades 0.1 percent up at 0.7293, hovering towards a peak of 0.7312 touched on Thursday, it’s strongest since Nov. 9. FxWirePro's Hourly Kiwi Strength Index was at 121.77 (Highly Bullish) by 0500 GMT. Immediate resistance is located at 0.7300, a break above could take it near 0.7340. On the downside, support is seen at 0.7256 (7-EMA), a break below could drag it near 0.7200.
Equities Recap
Asian shares declined, while world shares posted biggest fall in 1 1/2 months as immigration restrictions on travel to the U.S. ordered by President Donald Trump triggered risk-off market profile.
MSCI's gauge of the world's 46 stock markets tumbled 0.6 percent, its biggest fall in one and a half month, while MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.4 percent.
Markets in China, Hong Kong, and Taiwan were shut for the Lunar New Year holiday.
Tokyo's Nikkei slumped 1.45 percent to 19,087.84 points, Australia's S&P/ASX 200 index fell 0.55 percent to 5,630.50 points and South Korea's KOSPI was trading 0.47 percent down at 2,074.44 points.
Commodities Recap
Crude oil prices declined, extending losses for the third consecutive session as an increase in the U.S. drilling activity offset efforts by OPEC and other producers to cut output in order to drain rising oversupply. International benchmark Brent crude was trading 0.1 percent lower at $55.24 per barrel by 0408 GMT, having hit a low of $54.85 on Friday, its lowest since Jan. 25. U.S. West Texas Intermediate crude fell 0.2 percent at $52.42 a barrel, after rising to $54.05 last week, its highest since Jan. 6.
Gold prices rose, retreating from a 1-week low hit last week, as U.S. President Donald Trump's tough stance on immigration increased safe-haven demand. Spot gold rose 0.6 percent to $1,202.67 per ounce by 0412 GMT, drifting further away from a low of $1,180.78 hit on Friday, its lowest since Jan. 11. U.S. gold futures edged up to 0.5 percent to $1,199.6.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.4568 percent lower by 0.026 bps, while 5-year yield was down by 0.021 bps at 1.9145 percent.
The Australian bonds rallied following weak risk sentiments that prevailed among investors, tracking U.S. debt market, as protests continue in response to President Donald Trump’s stricter travel ban policy. The yield on the benchmark 10-year Treasury note moved lower by 1-1/2 basis points to 2.72 percent, the yield on the 15-year note fell 1 basis point to 3.18 percent and the yield on short-term 2-year plunged nearly 2 basis points to 1.80 percent.
The New Zealand government bonds closed flat as investors remained barely active amid a subdued trading session, following lack of significant economic data. The yield on the benchmark 10-year bond hovered around 3.38 percent at the time of closing, the yield on 7-year note also traded around 3.01 percent and the yield on short-term 2-year note remained flat at 2.34 percent.
Canadian government bond prices were mixed across the yield curve, with the 2-year up 2 Canadian cents to yield 0.795 percent and the 10-year declining 9 Canadian cents to yield 1.787 percent.
