09 Feb 2015

Monday 9th February: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei up 0.30 %, Shanghai Composite gained 0.30 %, Hang Seng and ASX both declined 0.45 %
  • Commodities: Gold at $1237 (+0.20 %), Silver at $16.73 (+0.20 %), WTI Oil at $52.26 (+1.10 %), Brent Oil at $58.98 (+0.50 %)
  • Rates: US 10 year yield at 1.927, UK 10 year yield at 1.647, German 10 year yield at 0.373

News & Data:

  • Japan Current Account ¥0.19trln, Expected: ¥0.36trln, Previous: ¥0.43trln
  • Japan Adjusted Current Account ¥0.98trln, Expected: ¥0.95trln, Previous: ¥0.91trln
  • China Trade Balance CNY60bln, Expected: CNY48.9bln, Previous: CNY49.6bln
  • China Exports -3.3 %, Expected: +6.3 %, Previous: 9.7 %
  • China Imports -19.9 %, Expected: -3.0 %, Previous: -2.4 %
  • Bank of Japan's Morimoto: Stimulus effect of Oct 31 easing is limited
  • Morimoto: Watch output gap, wages to see price trend
  • Morimoto: Need to monitor total, core, core-core CPI
  • Morimoto: Somewhat worried about weak consumer sentiment
  • Greek PM Tsipras: Austerity will make Greece debt problem worse
  • Tsipras: Will present medium term plan in line with EU rules
  • Tsipras: Greece wants new bridge agreement until June

CFTC Positioning Data:

  • EUR net short 196K vs net short 185K prior
  • JPY net short 60K vs net short 64k prior
  • GBP net short 42K vs net short 45K prior
  • AUD net short 56K vs net short 49K prior
  • CAD net short 27K vs net short 24K prior
  • CHF net short 5K vs net short 7K prior
  • NZD net short 4k vs net short 4k prior

Markets Update:

EUR/USD opened slightly lower on Sunday, after comments from the Greece Prime Minister Tsipras. The market does not seem to be too much concerned about a possible Greece exit from the Eurozone as of now, but it will remain a key theme in the coming weeks. EUR/USD recovered after the Tokyo open and almost reached a high of 1.1340 earlier. Intraday resistance noted at 1.1360, while support now eyed at 1.1275 (Jan 30th low). Similar price action in GBP/USD, which rose to 1.5260 after opening around 1.5220 on Sunday. There has been decent upside momentum in the pair until the NFP release on Friday put a stop to it. 1.5150 is now the pivotal support area to keep an eye on. A break below would suggest that the downtrend is resuming, with 1.4950 the next target. On the other side, 1.5340/50 is the next major hurdle for GBP bulls. USD/JPY fell back below 119 overnight, amid profit-taking and selling from Japanese corporations. After the strong US employment data, the pair is a buy-on-dip and good support can be expected at 118.20 and towards the 118.00 level.

Upcoming Events:

  • 07:00 GMT – German Trade Balance (€18.3bln, -0.4 % m/m)
  • 09:30 GMT – Euro Zone Sentix Investor Confidence (3.0)
  • 13:15 GMT – Canada Housing Starts (178k)

The Week Ahead (Key Events & Data):

Tuesday, February 10

  • 01:30 GMT – China CPI
  • 08:15 GMT – Swiss CPI
  • 09:30 GMT – UK Industrial & Manufacturing Production

Wednesday, February 11

  • 00:30 GMT – Australian Home Loans
  • 09:00 GMT – Norway GDP

Thursday, February 12

  • 00:30 GMT – Australian Employment Change
  • 00:30 GMT – Australian Unemployment Rate
  • 07:00 GMT – German CPI
  • 10:30 GMT – Bank of England Inflation Report
  • 10:30 GMT – Bank of England Governor Carney speaks
  • 13:30 GMT – US Retail Sales
  • 13:30 GMT – US Initial Jobless Claims
  • 22:30 GMT – RBA Governor Stevens speaks

Friday, February 13

  • 07:00 GMT – German GDP
  • 10:00 GMT – Euro Zone GDP