Market Roundup
- EUR/USD rises to 1.14185 from 1.1322 (Asia), 1.1320 (NY low Monday).
- EUR/JPY lifted up to 135.74, EUR/GBP to 0.7428.
- UK'S Osborne: Urges all sides to reach Greek accord, consequences of not having agreement would be severe for economic stability.
- Greek debt talks with EZ failed, way forward uncertain.
- EU's Dijsselbloem: We stand ready to work with Greece over next couple of days.
- Greek Finance Minister: Europe will continue to deliberate to achieve good outcome for average European.
- Austrian Chancellor Faymann says no one can calculate possible contagion effect from Greece situation.
- BOJ Board Member: Households may continue to hold off on spending unless wages rise significantly.
- BOJ is set to maintain its QQE stimulus that aims to hit 2 pct inflation by printing money at an annual pace of 80 trillion yen ($672 billion).
- Sterling falls after UK CPI data, touches day's low of $1.5332 around inflation release, quickly recovers ground.
- United Kingdom Jan CPI mm decreases to -0.9 % (consensus -0.8 %) vs previous 0.0 %.
- United Kingdom Jan CPI yy decreases to +0.3 % (consensus 0.3 %) vs previous 0.5 %.
- United Kingdom Jan PPI Input Prices mm NSA decreases to -3.7 % (consensus -2.5 %) vs previous -2.4 %.
- United Kingdom Jan PPI Output Prices mm NSA decreases to -0.5 % (consensus -0.3 %) vs previous -0.3%.
- Italy Dec Trade Balance decreases to 0.506 bln eur vs previous 0.815 bln eur.
- Germany Feb ZEW Current Conditions increases to 45.5 (consensus 30.0 ) vs previous 22.4.
- Germany Feb ZEW Economic Sentiment increases to 53.0 (consensus 55.0 ) vs previous 48.4.
Economic Data Ahead
- (0830 ET/1330 GMT) U.S. Empire State Manufacturing Survey (Feb) consensus 9.00, previous 9.95
- (0855 ET/1355 GMT) U.S. Redbook Same Store Sales Index (Feb 14 week)
- (1000 ET/1500 GMT) U.S. NAHB Housing Market Index (Feb) consensus 58, previous 57
- (1600 ET/2100 GMT) U.S. Treasury International Capital Statistics (TIC Data) (Dec)
Key Events Ahead
- (1145 ET/1645 GMT) Fed Trade operation 30-yr Fannie Mae/Freddie Mac (max $1.800 bln)
- (1245 ET/1745 GMT) FRB Philadelphia's Plosser on the economy and monetary policy
FX Recap
EUR/USD moved down on Tuesday after the failure of Eurozone Finance Ministers to reach a solution for Greece. The common currency dropped to from Monday's high of , nearing the bottom of its current -1.1534 range. It stayed in the positive territory after the release of mixed results by the ZEW Survey for the German economy. On the top side, immediate resistance is seen at 1.1400, and further at 1.1443 (high ) and then 1.1499 (high Feb.5). On the downside, a breach of 1.1303 (low ) would extend losses to 1.1300 and then at 1.1270 (low Feb.9). Option expiries at 1.1335 (292m), 1.1350 (311m), 1.1450 (1bln).
USD/JPY continued trading flat in 118.24-118.65 range in the European session, furthering its whippy trend from the previous session, as investors stay cautious ahead of the BOJ's monetary policy decision tomorrow. Moreover, the pair may be underpinned by rising safe-haven bets amidst soaring tensions over Greek situation as the second round of talks between euro zone finance ministers ended at an impasse. On the topside, resistance is seen at 118.72 levels and above which gains could be extended to 119 levels. On the flipside, pair may find support at 118.34 levels, and further below at 118 levels.
AUD/USD finally broke above the 0.7800 level and was seen trading around 0.7815. Daily charts suggest a move towards 0.7847 (21 DMA). On the downside, next support is located at 0.7691 (Feb 11 low) and on the flipside, resistance is seen at 0.7879 (Feb 6 high). Option expiries at 0.7715 (404m), 0.7750 (305m), 0.7800-05 (400m), 0.7890 (703m).
GBP/USD hit today's low at 1.5332 after the release of UK CPI figures and subsequently consolidated at 1.5349. Pair is likely to get support at 1.5206 (Feb 12 low) and resistance at 1.5444 (Monday's high).
USD/CHF: The USD continued edging higher, suggesting that the strong rebound from 0.8299 low is still ongoing. Topside target of 0.9350 already met and further move to 0.9400-10 and then to 0.9450 is expected. However, short-term overbought condition is likely to limit upside potential to 0.9500-10 and resistance at 0.9553 should hold. Option expiries at 0.9000 (900m).
