Market Roundup
- Asia stocks at 19-mth peak, dollar up as Yellen puts March rate hike in play - Reuters News
- RBA's Heath says higher terms of trade mean upside risk to RBA forecasts for Australian economy
- Australia Feb Westpac-MI Consumer Confidence Index +2.3 Pct TO 99.6
- Japan PM Abe: Gained US President Trump's understanding that monetary policy not currency manipulation
- BOJ Gov Kuroda no plan to raise BOJ's yield targets just because global interest rates are rising - Reuters
- BOJ Gov Kuroda: inflation is still distant from 2 pct so will maintain powerful monetary easing under current framework - Reuters
- USD bid in early Asia before spending rest of the day consolidating
- China completes $1.15 trillion investment in major projects by end-2016 -State planner – Reuters
- China approved 153.9 bln yuan fixed asset investments in Jan- State planner - Reuters
Economic Data Ahead
- (0300 ET/0800 GMT) Slovakia Headline Inflation MM* % Jan last 0.1
- (0300 ET/0800 GMT) Slovakia Core Inflation MM* % Jan last 0.1
- (0300 ET/0800 GMT) Spain CPI MM % Jan last 0.6
- (0300 ET/0800 GMT) Spain CPI YY % Jan last 1.6
- (0300 ET/0800 GMT) Spain HICP MM % Jan last 0.5
- (0300 ET/0800 GMT) Spain HICP YY % Jan last 3.0
- (0300 ET/0800 GMT) Slovakia Core Inflation YY* % Jan last 0.90
- (0300 ET/0800 GMT) Slovakia Headline Inflation YY* % Jan last 0.2
- (0430 ET/0930 GMT) Great Britain Claimant Count Unem Chng k Jan last -10.10
- (0430 ET/0930 GMT) Great Britain ILO Unemployment Rate % Dec last 4.80
- (0430 ET/0930 GMT) Great Britain GB Avg Earnings (Ex-Bonus) % Dec last 2.70
- (0430 ET/0930 GMT) Great Britain GB Avg Wk Earnings 3M YY % Dec last 2.80
- (0500 ET/1000 GMT) Eurozone Eurostat Trade NSA, Eur billion EU Dec last 22.80
Key Events Ahead
- (0530 ET/1030 GMT) UK 9YI 1.250B 0.125% 22/03/26 IL TAP
FX Beat
DXY: The dollar rallied to multi-week highs versus its major peers, as hawkish comments from Federal Reserve Chair Janet Yellen pushed the treasury yields higher. The greenback against a basket of currencies traded at 101.23, having hit a high of 101.38 in the previous session, it’s strongest since Jan. 20. FxWirePro's Hourly Dollar Strength Index stood at 114.82 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after declining to a 1-month low in the previous session as the dollar strengthened following hawkish comments from Federal Reserve Chair Janet Yellen. However, concerns about France's presidential election and Greek bailout talks continued to weigh on the major. The European currency edged up 0.10 percent to 1.0583, having hit a low of 1.0561 on Tuesday, it’s lowest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at -24.76 (Neutral) by 0400 GMT. Investors’ will closely watch Eurozone Trade balance figures, which is expected to show a seasonally adjusted surplus of EUR 2.5 billion in December. However, markets focus will remain on Yellen's second round of testimony and U.S. economic data. Immediate resistance is located at 1.0603 (support turned resistance trendline), a break above targets 1.0662 (38.2 % retracement of 1.0828 and 1.0561). On the downside, support is seen at 1.0550 (Jan 10 Low), a break below could drag it near 1.0500.
USD/JPY: The dollar rose to a fresh 2-week high after hawkish comments from Federal Reserve Chair Janet Yellen pushed the treasury yields higher. Yellen hinted a faster pace of U.S. interest rate increases at her two-day testimony before Congress, however, she expressed caution amid considerable uncertainty over economic policy under the Trump administration. The major trades higher at 114.29, having hit a high of 114.50 earlier, it’s highest since Jan 30. FxWirePro's Hourly Yen Strength Index stood at -116.79 (Highly Bearish) by 0400 GMT. Investors’ attention shifts towards the U.S. CPI data, retail sales, industrial production and housing market index ahead of Fed Chair Yellen’s second round of testimony. Immediate resistance is located at 114.85 (Jan 26 High), a break above targets 115.00. On the downside, support is seen at 114.00, a break below could take it near 113.40 (21-DMA).
GBP/USD: Sterling eased, extending previous session losses, as the dollar continued to rise following hawkish Fed Yellen’s testimony before the Senate Banking Committee. Investors will closely watch Britain's employment data for fresh clues on the strength of the labor market after inflation figures missed forecast on Tuesday. Sterling trades lower at 1.2465, having hit a high of 1.2582 last week, it’s strongest since Feb. 2. FxWirePro's Hourly Sterling Strength Index stood at 29.85 (Neutral) by 0400 GMT. Immediate resistance is located at 1.2501 (5-DMA), a break above could take it over 1.2582 (Previous Week High). On the downside, support is seen at 1.2427 (Feb 6-Low), a break below targets 1.2400. Against the euro, the pound trades down at 84.87 pence, having hit a low of 85.29 in the previous session.
AUD/USD: The Australian dollar held gains near a 3-month high amid risk-on market profile seen in the Asian equities, underpinning the bid tone around the major. The pair was also supported by upbeat Australian new motor vehicle sales figures, which rose 0.6 percent in January from previous 0.3 percent. The Aussie rallied 0.2 percent to 0.7673, having hit a high of 0.7696 in the previous session, its highest since Feb. 3. FxWirePro's Hourly Aussie Strength Index stood at 82.98 (Slightly Bullish) by 0400 GMT. Markets now await the U.S. CPI and retail sales figures ahead of Fed Chair Yellen’s testimony for fresh clues on the major. Immediate support is seen at 0.7644 (10-DMA), a break below could drag it near 0.7597 (21-DMA). On the upside, resistance is located at 0.7700, a break above targets 0.7730.
NZD/USD: The New Zealand dollar declined, extending losses for the third consecutive session, as the U.S. dollar rose across the board following upbeat comments from Fed chair Yellen on U.S. interest rate hikes. The major fell to 3-1/2 week low in the previous session as Reserve Bank of New Zealand's dovish stance continued to weaken market sentiment. The Kiwi trades down at 0.7164, having hit a low of 0.7134 on Tuesday, it’s weakest since Jan. 20. FxWirePro's Hourly Kiwi Strength Index was at -8.10 (Neutral) by 0400 GMT. Immediate resistance is located at 0.7192 (23.6 % retracement of 0.7375 and 0.7134), a break above could take it near 0.7218 (Feb 13 High). On the downside, support is seen at 0.7150, a break below could drag it till 0.7100.
Equities Recap
Asian shared rallied to a 19-month peak, following a record-setting night on Wall Street after Federal Reserve Chair Janet Yellen signaled a possible interest rate hike at an upcoming meeting of the central bank.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.8 percent.
Tokyo's Nikkei advanced 1.10 percent to 19,451.21 points, Australia's S&P/ASX 200 index rose 0.90 percent to 5,807.30 points and South Korea's KOSPI was trading 0.38 percent up at 2,082.74 points.
Shanghai composite index climbed 0.48 percent to 3,233.53 points, while CSI300 index was trading 0.32 percent up at 3,446.66 points.
Hong Kong’s Hang Seng was trading 1.5 percent higher at 24,060.51 points. Taiwan shares added 0.8 percent at 9,800.88 points.
Commodities Recap
Crude oil prices declined, halting its 4-day winning streak, as concerns that OPEC would not be able to maintain its high compliance with output cuts weighed on market sentiment. International benchmark Brent crude was trading 0.25 percent lower at $55.65 per barrel by 0355 GMT, pulling away from a high of $56.85 hit on Friday, its strongest since Feb. 6. U.S. West Texas Intermediate crude fell 0.36 percent at $52.82 a barrel, after rising as high as $54.10 last week, its highest since Feb. 6.
Gold prices edged lower, reversing some of its previous session gains, as the dollar strengthened after U.S. Federal Reserve Chair Janet Yellen hinted at a hike in interest rates in an upcoming meeting of the central bank. Spot gold fell 0.24 percent to $1,225.82 per ounce at 0358 GMT, having hit its lowest since Feb. 6 at $1,219.19 on Monday. U.S. gold futures were up 0.11 percent, to $1,226.7.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.4771 percent higher by 0.007 bps, while 5-year yield was up by 0.008 bps at 1.9680 percent.
The Australian government bonds plunged, tracking softness in U.S. Treasuries after the Federal Reserve Chair Janet Yellen presented a hawkish testimony before the Senate Banking Committee. The yield on the benchmark 10-year Treasury note jumped 5 basis points to 2.80 percent, the yield on 15-year note also surged 5 basis points to 3.24 percent and the yield on short-term 2-year rose 3 basis points to 1.87 percent.
The New Zealand government bonds closed High as investors remain cautious ahead of the Q4 retail sales, scheduled to be released on February 17. The yield on the benchmark 10-year bond fell 1 basis point to 3.32 percent at the time of closing, the yield on 7-year note also slid nearly 1 basis point to 2.89 percent and the yield on short-term 2-year note traded 1 basis point lower at 2.24 percent.
Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries on Yellen's more hawkish-than-expected tone. The 2-year dipped 2.5 Canadian cents to yield 0.799 percent and the 10-year declined 28 Canadian cents to yield 1.765 percent. The 10-year yield touched its highest intraday since Feb. 3 at 1.793 percent.
