Market Roundup
- Cleveland Fed Mester sees June rate hike viable option.
- US Treasury Sec Lew acknowledges China progress on FX.
- Japan EconMin Amari: Excessive JPY strength-weakness undesirable, current yen level positive for Japan not hurting consumer sentiment, FX must reflect fundamentals.
- Japan FinMin Aso: Weak JPY good for exporters, budget items to ease importer pain.
- Greek FinMin says willing to sign different finance deal, EU Dijsselbloem says Greece has till Friday to request bailout extension.
- China sells net CNY108.3 bln in FX in January, Dec net CNY118.4 bln sales.
- South Korea central bank sells 2-year monetary stabilisation bonds at yield of 2.05 pct.
- China January home prices -5.1% y/y, December -4.3%.
Economic Data Ahead
- (0330 ET/0830 GMT) Sweden Jan CPI, -1.1% m/m, -0.3% y/y consensus; previous +0.2%, -0.3%.
- (0330 ET/0830 GMT) Sweden Jan CPIF, -1.1% m/m, +0.5% y/y consensus; previous +0.2%, +0.5%.
- (0400 ET/0900 GMT) Italy Dec trade balance global/EU; previous bln, E820 mln surpluses.
- (0430 ET/0930 GMT) UK Jan CPI, -0.8% m/m, +0.3% y/y consensus; previous unchanged, +0.5%.
- (0430 ET/0930 GMT) UK Jan RPI, -0.7% m/m, +1.3% y/y consensus; previous +0.2%, +1.6%.
- (0430 ET/0930 GMT) UK Jan RPIX, -0.7% m/m, +1.3% y/y consensus; previous +0.2%, +1.7%.
- (0430 ET/0930 GMT) UK Jan PPI output, -0.3% m/m, -1.4% y/y consensus; previous -0.3%, -0.8%.
- (0430 ET/0930 GMT) UK Jan - core output, +0.1% m/m, +0.4% y/y consensus; previous unchanged, +0.8%.
- (0430 ET/0930 GMT) UK Jan PPI input, -2.5% m/m, -12.2% y/y consensus; previous -2.4%, -10.7%.
- (0500 ET/1000 GMT) Germany Feb ZEW economic sentiment index, 56.0 consensus; previous 48.4.
- (0500 ET/1000 GMT) Germany Feb ZEW current conditions index, 30.0 consensus; previous 22.4.
- (0830 ET/1330 GMT) US Feb Empire State mfg index, 9.0 consensus; previous 9.95.
- (1000 ET/1500 GMT) US Feb NAHB housing market index, 58.0 consensus; previous 57.0.
Key Events Ahead
- N/A BoJ begins two-day policy meeting, EZ EcoFin meeting in Brussels.
- N/A Spain 6/12-month, ESM 6-month Treasury bill auctions.
- (0830 ET/1330 GMT) Canada international securities transactions, previous net C$4.29 foreign buys.
- (1200 ET/1700 GMT) SNB Chair Jordan speech at Brussels conference.
- (1245 ET/1745 GMT) Philly Fed Plosser speech in Philadelphia.
FX Recap
EUR/USD recovered from day's lows and traded flat in the mid-Asian session, after the Eurozone Finance Ministers meeting ended in an impasse as both sides refused to accept the terms of the Greece bail-out. The pair now holds steady above the 1.13 handle and trades around fresh session highs of 1.1356. It is likely to stay under pressure on uncertainties surrounding a possible Grexit. Pair's next resistance is seen at 1.1369 (Jan 29 High) levels, above which it could extend gains to 1.1400 levels. On the downside, support is located at 1.1300 (Feb 12 Low) levels, and further below at 1.1278 (Feb 11 Low) levels.
AUD/USD inched higher in the mid-Asian trading hours, rising above 0.7800 handle for the first time in five days, as the pair was boosted by a neutral RBA monetary policy meeting minutes and a subdued US dollar across the board. It trades 0.41% higher on the day, nearing the fresh session highs of 0.7809 levels. On the topside, immediate resistance is located at 0.7831 (Feb 2 High) levels, above which it could extend gains to 0.7852 (Feb 4 High) levels. On the downside, pair is likely to find support at 0.7721 (Feb 13 Low) and below it at 0.7691 (Feb 11 Low) levels.
NZD/USD traded in 0.7482/0.7528 range in the Asian session. Early NZD slide towards 0.7480 resembled that seen in AUD as investors awaited the release of RBA monetary policy meeting minutes. Higher Aussie after the release of the minutes, as traders lowered expectations of a rate cut in March led to NZD/USD recovery.
USD/JPY came close to retest 118.00 levels, but managed to recover some losses to trade at 118.47. It formed temporary top around 119.18 and is declining from that level. Overall trend is bearish as long as resistance 119.20 holds. Short term trend is weak so reach till 116.80 cannot be ruled out. On the upside break of 119.20 will take the pair to 119.95/120.51 in short term. The pair's major intraday support around 118 and break below will target 116.80.
USD/CAD reversed its gains from the previous session and was seen trading lower in the mid-Asian morning as the CAD continued getting boost from stabilising oil prices. It trades near fresh session lows of 1.2453, down -0.11 percent. It is likely to stay under pressure until it breaks strong resistance at 1.2478 levels. On the topside, immediate resistance is seen at 1.2478 levels and above which gains could be extended to 1.2506 levels. On the flipside, next support is seen at 1.2418 levels, below which losses could be extended to 1.2390 levels.
USD/CNY: China's yuan weakened on Tuesday, staying pressurized after almost touching its lower trading limit in the previous session, subsequent to the hike in trading volume in the late Monday afternoon. It continued trading just above its lower bound on Tuesday. Prior to market open, the PBOC set the midpoint rate at 6.133 per dollar, weaker than the previous fix of 6.1273. Spot yuan opened at 6.2549 per dollar and was trading at 6.2531 at midday.
