Global Markets:
- Asian stock markets: Nikkei up 1.80 %, Shanghai Composite declined 0.15 %, Hang Seng gained 0.50 %, ASX fell 0.45 %
- Commodities: Gold at $1221 (+0.10 %), Silver at $16.67 (-0.55 %), WTI Oil at $49.45 (+1.20 %), Brent Oil at $56.40 (+0.10 %)
- Rates: US 10 year yield at 1.99, UK 10 year yield at 1.67, German 10 year yield at 0.353
News & Data:
- Australia MI Inflation Expectations 4.0 %, Previous: 3.2 %
- Australia Employment Change -12.2k, Expected: -5k, Previous: 37k
- Australia Unemployment Rate 6.4 %, Expected: 6.2 %, Previous: 6.1 %
- Australia Participation Rate 64.8 %, Expected: 64.8 %, Previous: 64.8 %
- Japan Core Machinery Orders 8.3 % m/m, Expected: 2.4 %, Previous: 1.3 %
- Japan Core Machinery Orders 11.4 % y/y, Expected: 5.9 %, Previous: -14.6 %
- Japan CGPI -1.3 % m/m, Expected: -0.6 %, Previous: -0.4 %
- Japan CGPI 0.3 % y/y, Expected: 1.1 %, Previous: 1.9 %
- New Zealand Business PMI 50.9, Previous: 57.7
Markets Update:
The Euro-area finance ministers met yesterday for 6 hours to talk about the future of Greece's bailout programme, but no common ground was found. The Greece bailout programme is expiring at the end of this month and the country must find a solution soon to avoid running out of cash and avert an exit from the European currency union. The finance ministers will meet again on February 16th in Brussels, but it is doubtful that this meeting will produce major results. Meanwhile, EUR/USD is back where it spent most of the past couple of trading sessions – consolidating around 1.13. The pair saw a brief spike up to 1.1350 in Asia on a false CNBC report on the FinMin meeting, but that was quickly retraced. 1.1260 and 1.14 remain the pivotal tech levels to watch on both sides.
GBP/USD rallied up to 1.53 yesterday, driven partly by GBP demand in the crosses (GBP/JPY most notable). It failed to sustain momentum up there though and is now approaching again the 1.52 support level. It will be a volatile session for the Pound as we have the BoE Inflation Report at 1030 GMT, as well as BoE Governor Carney speaking shortly afterwards. USD/JPY remains very well bid. The pair had a dip to 119.97 at the Tokyo open, but made it back to 120.25, where it stayed for a while. 119.70 now seen as intraday support and trailing stops are resting through 119.40. Pivotal short-term support at 119.20. To the topside, not much resistance until 120.80.
The Australian Dollar declined on awful employment data. The unemployment rate increased to 6.4 % (vs 6.2 % expected by most) and the economy lost 12.200 jobs (vs -5000 expected). AUD/USD quickly fell from 0.7720 to a low of 0.7645 and it remained offered throughout the session. The pair might find some immediate support at the current 2015 low at 0.7625, but it is very likely we'll see fresh lows being posted soon. NZD/USD was dragged lower by the Aussie and is currently testing 0.7330 support. A break lower would path the way for a 0.7215 test. The Canadian Dollar remains weak as the USD catched a bid & commodities are falling again. USD/CAD almost touched the 1.27 level yesterday and though it failed, dealers note that it has remained well bid in the past two sessions.
Upcoming Events:
- 07:00 GMT – German CPI (-1.0 % m/m, -0.3 % y/y)
- 07:00 GMT – German HICP (-1.3 % m/m, -0.5 % y/y)
- 08:30 GMT – Riksbank Interest Rate Decision
- 08:30 GMT – Swedish Unemployment Rate (7.1 %)
- 10:00 GMT – Euro Zone Industrial Production (0.2 % m/m, 0.3 % y/y)
- 10:30 GMT – Bank of England Inflation Report
- 10:30 GMT – Bank of England Governor Carney speaks
- 13:30 GMT – US Initial Jobless Claims (285k)
- 13:30 GMT – US Retail Sales (-0.5 % m/m)
- 13:30 GMT – US Core Retail Sales (-0.4 % m/m)
- 13:30 GMT – Canadian Housing Price Index (0.2 % m/m)
- 15:00 GMT – US Business Inventories (0.2 % m/m)
- 22:30 GMT – RBA Governor Stevens speaks