Market Roundup
- Australia December trade surplus A$3.511 bln, A$2.2 bln eyed, exports +5% m/m at A$31.114 bln, imports +1% at A$28.630 bln, record surplus in December.
- Australia December building approvals -1.2% m/m, -2.0% eyed, private-sector houses -1.6%, fall less than eyed but trend negative for seven months now.
- Japan pension mega-fund GPIF to invest in US infrastructure - Nikkei.
- ChiefCabSec Suga – Denies GPIF considering investing in US infrastructure bonds, GPIF decides own investment policy, Abe-Trump talk agenda not yet decided – Reuters.
- Japan PM Abe calls FX intervention an emergency option – Nikkei.
- Japan PM Abe – No change in view FX restrictions should not be part of trade negotiations, no intervention during PM tenure, govt not in position to tell firms what to do (on meeting with Toyota’s Toyoda) - Reuters.
- IMF Furusawa – Uncertainty over US growth projections due to new US administration, protectionism could affect Asia prosperity, markets increasingly volatile, China reliance on stimulus also a risk – Reuters.
- MoF flow data week-ended Jan 28 – Japanese buy net Y124.9 bln foreign stocks, sell Y1.3593 trln bonds, buy Y7.9 bln bills; foreign investors sell net Y143.9 bln Japanese stocks, buy Y446.2 bln bonds, sell Y585.8 bln bills.
- EU document – Clearing, M&A face Brexit challenges – Reuters.
- New Zealand January job adverts -0.2% m/m, +19.6% y/y, y/y rise highest in six years.
Economic Data Ahead
- (0315 ET/0815 GMT) Switzerland December retail sales, -0.7% y/y eyed; last +0.9%.
- (0430 ET/0930 GMT) UK January PMI construction, 53.8 eyed; last 54.2.
- (0500 ET/1000 GMT) Euro Zone December producer prices, +0.4% m/m, +1.3% y/y eyed; last +0.3%, +0.1%.
- (0730 ET/1230 GMT) US January Challenger layoffs; last 33.63k.
- (0830 ET/1330 GMT) US weekly initial jobless claims, 250k eyed; last 259k.
- (0830 ET/1330 GMT) US Q4 productivity/ULC–prelim, +1.0%, +1.9% AR eyed; last +3.1%, +0.7%.
- (0945 ET/1445 GMT) US January ISM-New York index; last 727.4.
Key Events Ahead
- Lunar New Year – China markets closed.
- N/A ECB Governing Council meeting.
- (0300 ET/0800 GMT) Riksbank Executive Board meeting.
- (0400 ET/0900 GMT) ECB economic bulletin.
- (0430 ET/0930 GMT) Spain E3-4 bln 0.25/1.95/4.20% 2019/30/37 Bono auctions.
- (0430 ET/0930 GMT) Spain E0.5-1.0 bln 1.8% 2024 index-linked Bono auction.
- (0450 ET/0950 GMT) France E6-7 bln 0.25% and 1.5% 2026 and 2031 OAT auctions.
- (0500 ET/1000 GMT) Sweden4.25% 2019, 3.5% 2022 government bond auctions.
- (0700 ET/1200 GMT) BoE MPC policy announcement, no changes/9-0 vote eyed, inflation report.
- (0715 ET/1215 GMT) ECB Pres Draghi speaks at Ljubljana ECB/Slovenia CB conference.
- (0730 ET/1230 GMT) BoE Gov Carney press conference on quarterly inflation report.
- (1100 ET/1600 GMT) ECB Angeloni speaks at Halle, Germany LIW event.
- (1200 ET/1700 GMT) ECB ChiefEcon Praet, Buba Dombret speak at Berlin banking conference.
- (1345 ET/1845 GMT) ECB Coeure speaks at Paris AEF dinner.
FX Recap
USD: The dollar index, which tracks the U.S. currency against a basket of six major rivals, edged slightly lower to 99.607, back toward a more than seven-week low of 99.430 plumbed on Tuesday.
EUR/USD: The euro edged up 0.1 percent to $1.07820. The dollar slipped on Thursday, edging back toward recent lows after the Federal Reserve disappointed investors hoping for a more hawkish policy stance. Pair made intraday high at 1.0793 and low at 1.0761 marks. Immediate resistance was seen at $1.0812 level. A daily close below 1.0767 will drag the parity down towards 1.0684 levels.
USD/JPY: The yen was marginally higher against the U.S. dollar in early hours of Asia and trading around 112.62 mark. A sustained close above 113.22 is required to take the parity higher towards 115.37 and 117.42 marks. Alternatively, a daily close below 113.22 will drag the parity down towards 110.00 levels.
GBP/USD: The Sterling rose to $1.2679 against U.S. dollar. Sterling soared by more than 1 percent against the euro on Wednesday, 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. Short term bias remains bullish till the time pair holds key support at 1.2542 levels. On the other side, current upside movement will take the parity higher towards key resistance around 1.2774, 1.2928 levels respectively.
AUD/USD: The Aussie gained 0.6 percent to $0.7620, after earlier scaling $0.730, its loftiest peak since November 2016. Data from the Australian Bureau of Statistics showed a trade surplus of A$3.51 billion ($2.68 billion) in December, handily outpacing forecasts of A$2.2 billion, as surging commodity prices showered the resource-rich nation in cash. The Australian dollar went as far as $0.7631, the highest since Nov.10. It also broke above key chart resistance of $0.7610/20, paving the way for $0.7720/40.
NZD/USD: The New Zealand dollar edged 0.2 percent higher to $0.7295, but still short of a 2-1/2 month high touched earlier this week.
Equities Recap
Japan’s Nikkei was trading around 0.81 percent lower at 18,981 points.
Hong Kong’s Hang seng was trading 0.68 percent lower at 23,181 points.
India’s NSE Nifty was trading around 0.02 percent lower at 8,714.70 points and BSE Sensex was trading at 0.11 percent higher at 28,172 points.
Australia's S&P ASX200 index closes down 0.14 pct at 5,645.00 points.
Taiwan stocks open up 0.6 pct at 9,502.25 points.
Seoul shares open down 0.01 pct at 2080.23.
Commodities Recap
Oil prices fell on Thursday after official data showed U.S. crude and gasoline stockpiles rose sharply, although signs that OPEC and other producers are holding the line on output cuts are helping support prices. Brent crude futures fell 28 cents, or 0.5 percent, to $56.52 a barrel as of 0410 GMT after settling up $1.22 in the previous session. Front month futures for West Texas Intermediate were down 33 cents, or 0.6 percent, at $53.55 after climbing $1.07 at the day before.
Gold edged up on Thursday, as the dollar weakened after the U.S. Federal Reserve kept interest rates unchanged at its first meeting since President Donald Trump's inauguration. Spot gold rose 0.44 percent, to $1,214.45 per ounce at 0321 GMT, while U.S. gold futures were up 0.7 percent, to $1,216.7.
Treasuries Recap
New Zealand government bonds eased, sending yields up about 2.5 basis points at the long end of the curve.
Australian government bond futures fell, with the three-year bond contract down 3 ticks at 98.020. The 10-year contract was off 5 ticks to 97.185.
10-year U.S. treasury yield was at 2.455 percent vs U.S. close of 2.474 percent on Wednesday.
Benchmark 10-year JGB yield rises above 0.090 percent to highest level since mid-December.
20-year JGB yield rises above 0.665 percent to highest level since February 2016.
