Market Roundup
- Japan FinMin Aso - Global financial market turmoil on risk aversion, China structural problems, US monetary policy, oil price declines G20 topics, won't rule out more fiscal stimulus - Reuters, Nikkei.
- BoJ Gov Kuroda - Base money expansion alone won't push prices up, admits true inflation expectations weak now, sticks to long-run rise view - Reuters.
- EconMin Ishihara - Recent market moves volatile, G20 to talk cooperation, competitive currency devaluation not desirable - Reuters.
- Japanese Inc earnings: offshore earnings increasingly staying offshore - NEN.
- Japan, China other CBs dump cash at US Fed to stabilize ccys - Reuters.
- China CommMin - Consumption growth to remain fast in '16, recent CNY moves will not impact trade performance - Reuters.
- US Treasury official(s) - US will urge greater fiscal spending at G20, important G20 abides by FX commitments - Reuters, MNI.
- ECB/Finland CB Liikanen - ECB ready to do more - YLE TV.
Economic Data Ahead
- (0245 ET/0745 GMT) France Feb business climate index, 102.0 forecast; last 102.0.
- (0400 ET/0900 GMT) Germany Feb Ifo business climate index, 106.7 forecast; last 107.3.
- (0400 ET/0900 GMT) Germany Feb Ifo current conditions index, 112.0 forecast; last 112.5.
- (0400 ET/0900 GMT) Germany Feb Ifo expectations index, 101.6 forecast; last 102.4.
- (0900 ET/1400 GMT) Belgium Feb leading indicator, -3.6 forecast; last -3.0.
- (0900 ET/1400 GMT) United States Dec CaseShiller 20, +0.1% m/m nsa, +0.9% sa forecast; last +0.1%, +0.9%.
- (0900 ET/1400 GMT) United States Dec CaseShiller 20, +5.8% y/y forecast; last +5.8%.
- (1000 ET/1500 GMT) United States Feb CB consumer confidence index, 97.0 forecast; last 98.1.
- (1000 ET/1500 GMT) United States Jan exist home sales, 5.32 mln AR, -2.9% forecast; last 5.46 mln, +14.7%.
- (1000 ET/1500 GMT) United States Feb Richmond Fed mfg shipments/services/comp indices; last -6/+10/+2.
Key Events Ahead
- N/A IMF Lagarde, others speak at Dubai Global Women's Forum (till tomorrow).
- N/A Spain 3//9-month treasury bill auctions, UK 0.125% 2065 IL syndication.
- (0400 ET/0900 GMT) Riksbank Gov Ingves, DepGov Floden at Stockholm open hearing.
- (0400 ET/0900 GMT) Buba Dombret speech in Vienna/18:35 speech at Linz forum.
- (0430 ET/0930 GMT) ECB 005% 7-day refi, E60 bln allotment forecast, last E61.8 bln.
- (0500 ET/1000 GMT) BoE Gov Carney parliamentary testimony.
- (0615 ET/1115 GMT) SNB Chair Jordan speech in Frankfurt.
- (0830 ET/1330 GMT) ECB Nouy speech at London Deutsche Bank Capital Forum.
- (0830 ET/1330 GMT) Minny Fed Kashkari speech in Minneapolis.
- (1100 ET/1600 GMT) Canada FinMin Morneau parliamentary testimony on budget.
- (1200 ET/1700 GMT) BoE ChiefEcon Haldane lecture at University of Nottingham.
- (1200 ET/1700 GMT) Belgium CB Gov Smets presents annual report in Berchem.
USD: The dollar gave up its earlier gains against the yen as shares retreated. It slumped to 111.96 yen, after opening at 112.85. The dollar index against a basket of six major currencies hit a 3-week high of 97.60 on Monday but dropped back to 97.248.
EUR/USD: The euro trades 0.15 percent higher at 1.1043 levels, having touched sessions high of 1.1048. The demand for safe-haven currencies were strengthened as decline in Asian shares accelerated the risk-off trades across the financial markets. Investors continue to be wary as renewed bout of risk-aversion was caused by fresh selling in the oil prices. Markets now await German economic data, ahead of the U.S. consumer confidence and housing data due later in the day. Traders are seen bullish as the pair continues to hover towards session's high. Immediate resistance is located at 1.1085 (5-DMA), while support is seen at 1.1003 (Previous Session Low).
USD/JPY: The dollar was 0.48 percent lower at 112.31 yen, reversing overnight gains made on a bounce in equities and commodities, touching an 11-day trough of 111.96. The yen gained broadly on Tuesday as risky assets lost traction and revived demand for the safe-haven currency. In absence of major data release in the Asian Session, markets will closely watch U.S. data due in the NY session. Earlier in the session, the pair rose to 113.05, before falling down to its current level. On the upside, immediate support is seen at 111.65 (Feb 12 Low), while on the downside, resistance is located at 113.25 (10-DMA).
AUD/USD: The Australian dollar trades 0.05 percent higher at 0.7230, hovering near a 7-week high of 0.7246 touched on Monday. The Aussie was boosted by improving risk appetite aided by a sustained rally in iron ore prices, a major export for Australia. The price of iron ore has risen 17 percent so far this year. Its bounce from a multi-year low hit in December strengthening market sentiments that the worst may be over. Attention now remains on the U.S data due later today ahead Australia's Wages and Private Capital Expenditure data due later this week. Earlier in the session, the pair made a high of 0.7243 and a low of 0.7212. Immediate resistance is located at 0.7246 (Previous Session High), while support is seen at 0.7188 (5-DMA).
NZD/USD: The New Zealand dollar edged down after touching sessions high of 0.6714. It held near multi-week highs against the pound on Tuesday on worries Britain could exit the European Union. The kiwi rallied to 0.6725 in the previous session on positive sentiment. Ahead in the week, markets await New Zealand's trade data for further cues on the pair. Currently, the pair trades at 0.6693 levels, hovering towards sessions low of 0.6687. Immediate support is located at 0.6657 (5-DMA), while resistance is seen at 0.6725 (Previous Session High).
USD/CNY: The yuan softened against the dollar on Tuesday after the central bank set the midpoint rate at 6.5273 per dollar prior to the market open, 0.17 percent softer than the previous fix 6.5165. The spot market opened at 6.5289 per dollar and was trading at the same rate by midday, easing 0.09 percent from the previous close, while the offshore yuan was trading at 6.5332 per dollar, within 50 pips from the onshore spot. Since last August, the PBoC's surprise devaluation of the currency has put immense deprecation pressure on the yuan, amid growing concerns about China's slowing economy growth and increasing capital outflows.
Equities Recap
Asian shares retreated from a 7-week high on Tuesday as the oil price rally that strengthened global equity markets reversed.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 percent, after earlier rising 0.4 percent to its highest level since Jan. 8.
Australia's S&P/ASX 200 Index declined 0.62 pct at 4,970.30 points, while Nikkei dropped 0.37 pct at 16,052.05, with Seoul Shares edged down 0.17 pct.
Commodities Recap
Gold edged up on Tuesday as Asian shares reversed gains and the dollar declined, with the metal also supported by big inflows into bullion funds. Spot gold had risen 0.7 percent to $1,217.20 an ounce by 0324 GMT. Silver edged up after touching a 2-week low of $14.90 an ounce on Monday. Platinum declined, falling towards a 2-week low hit in the previous session, while palladium steady.
Oil futures declined more than 1 percent on Tuesday amid worries rising Iranian output would deepen a global crude oversupply, offsetting expectations of a drop in U.S. production. U.S. front-month West Texas Intermediate crude futures were trading at $32.89 per barrel at 0356 GMT, down 50 cents from Monday's settlement, while International benchmark Brent was down 50 cents at $34.19 a barrel.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 1.726 down by 0.04.
Australian government bond futures edged up, with the 3-year bond contract adding 1 tick to 98.220. The 10-year contract added 2 ticks to 97.5650, while the 20-year contract was steady at 97.0100. The spread between 10- and 3-year government bonds contracted to 64 basis points, the smallest in 10 months.
New Zealand government bonds were firmer, with yields down a basis point along the curve.
Canadian government bond prices were lower across the maturity curve, with the benchmark 10-year off 6 Canadian cents to yield 1.126 percent, while the 2-year price down 1.5 Canadian cents to yield 0.456 percent.
