Market Roundup
• US Q4 GDP (2nd estimate) 1.9% v 2.1% forecast, 1.9% previous, Q4 GDP sales 0.9% v 1% forecast 0.9% previous.
• US Q4 consumer spending (prelim) 3% vs 2.5% previous.
• US Feb Chicago PMI 57.4 v 53 forecast, 50.3 previous.
• US Feb consumer confidence 114.8 v 111 forecast, 111.6 previous.
• Fed’s Kaplan: exact timing of rate move is not important, path of rate move is.
• JP Morgan’s Dimon: biggest impact of corporate tax cuts would be higher wages.
• Oil prices fall 1 percent, rising U.S. supplies offsets OPEC cuts.
• Dollar weakens before Trump speech to Congress.
• BOJ's bond operation plan fixes dates, leaves size uncertain; new way will curb 'excessive market volatility' - BOJ official.
• One out of four investors (25.2%) expects the euro zone to lose a member, greater risk than in 2012/13 - Sentix survey.
• More austerity beckons as Greece, lenders resume talks.
• European funds cut equities, French debt on election jitters, Equities cut to 43.9 pct from 46.5 pct in January.
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Terms of Trade QQ* Q4 -1.8%- previous
• 21:45 New Zealand Terms of Trade - Imports* Q4 -1%- previous
• 21:45 New Zealand Terms of Trade - Exports* Q4 -2.8%- previous
• 22:30 Australia AIG Manufacturing Index Feb 51.2- previous
• 23:50 Japan Business Capex (MOF) YY* Q4 -1.3%- previous
• 00:30 Australia GDP QQ* Q4 forecast 0.7%, -0.5%- previous
• 00:30 Australia GDP YY* Q4 forecast 1.9%, 1.8%- previous
• 00:30 Australia GDP Final Consumption* Q4 0.3%- previous
• 00:30 Australia GDP Capital Expenditure* Q4 -2.7%- previous
• 00:30 Japan Nikkei Mfg PMI Feb 53.5- previous
• 01:00 China NBS Non-Mfg PMI* Feb 54.6- previous
• 01:00 China NBS Manufacturing PMI* Feb forecast 51.1, 51.3- previous
• 01:45 China Caixin Mfg PMI Final Feb forecast 50.8, 51- previous
Looking Ahead - Events, Other Releases (GMT)
• --:-- Japan- Bank of Japan board member Takehiro Sato to meet with business leaders.
Currency Summaries
EUR/USD is likely to find support at 1.0560 levels and currently trading at 1.0584 levels. The pair has made session high at 1.0630 and hit lows at 1.0580 levels. Euro declined against dollar on Tuesday as investors awaited U.S. President Donald Trump's speech to Congress for fresh hints on his economic plans and as portfolios were rebalanced for month-end. Investors were wary that Trump may disappoint those who expect greater detail on how he will reform the tax code as he focuses on domestic issues. Price moves were muted as investors rebalanced portfolios for the end of the month and were hesitant to take new positions before Trump’s speech. On the data Front, the U.S. economy expanded at a slower pace in the fourth quarter. Gross domestic product rose at a 1.9 percent annual rate in the fourth quarter, the Commerce Department said in its second estimate, as downward revisions to business and government investment offset robust consumer spending. The estimate matched what was published last month. Output increased at a 3.5 percent rate in the third quarter. The economy grew 1.6 percent for all of 2016, its worst performance since 2011, after expanding 2.6 percent in 2015.The greenback was 0.10 percent lower against the euro at $1.0596.
GBP/USD is supported in the range of 1.2381 levels and currently trading at 1.2397 levels. It reached session high at 1.2470 and dropped to session low at 1.2397 levels. Sterling declined against the dollar on Tuesday as sterling was weighted down ahead of a speech by U.S. President Donald Trump and worries about Britain's future when it leaves the European Union. The pair currency stayed close to the low in choppy trade in the late US session, last trading 0.1 percent down at $1.2408. Investors turned their focus to the United States, where Trump was due to address a joint session of the U.S. Congress. Despite the dollar weakening against most currencies ahead of Trump's speech, which investors will watch closely for fresh details on his economic plans, sterling was kept under pressure by worries about the fallout from Brexit.
USD/CAD is supported at 1.3157 levels and is trading at 1.3301 levels. It has made session high at 1.3304 and lows at 1.3195 levels. The Canadian dollar declined against its U.S. counterpart on Tuesday as the dollar firmed, while investors awaited a speech from U.S. President Donald Trump and the Bank of Canada's interest rate decision on Wednesday. The Bank of Canada is widely expected to hold its policy rate at 0.5 percent. In January, the central bank said an interest rate cut was still possible depending on risks, including material consequences if Trump enacts protectionist policies. Prices of oil, one of Canada's major exports, retreated as increasing crude production from the United States offset the Organization of the Petroleum Exporting Countries-led output cuts. On the data front, Canadian producer prices rose for the fifth month in a row in January, increasing by 0.4 percent from December on higher prices for energy and petroleum products, Statistics Canada said on Tuesday. The Canadian dollar was last trading at C$1.3284 to the greenback, weaker than Monday's close of C$1.3163.
AUD/USD is supported around 0.7662 levels and currently trading at 0.7657 levels. It hit session high at 0.7694 and made session lows at 0.7655 levels. The Australian dollar dipped slightly against dollar on Tuesday in thin trading as investors awaited a speech by U.S. President Donald Trump. Investors shifted their focus to Trump's policy speech to a joint session of Congress on Tuesday night, when he is expected to provide clues on his tax-cutting plans. Markets have been longing for more detail on Trump's promised stimulus plans to judge if they really would lift inflation and economic growth, and thus add to the case for higher U.S. interest rates. Such an outcome would tend to boost the U.S. dollar across the board, including against the Australian dollar. The Currency pair initially jumped upto $0.7694 but declined slightly to trade at $0.7656. Traders were also awaiting Australia's gross domestic product data due on Wednesday, expected to show growth rebounded by around 0.7 percent in the fourth quarter following a shock contraction in the previous quarter.
Equities Recap
European shares edged higher on Tuesday as investors awaited U.S. President Donald Trump's first speech to Congress for more details on his tax cuts and infrastructure spending plans.
UK's benchmark FTSE 100 closed up by 0.4 percent, the pan-European FTSEurofirst 300 provisionally closed up by 0.28 percent, Germany's Dax ended up by 0.2 percent, France’s CAC finished the day up by 0.2 percent.
U.S. stocks slipped Tuesday afternoon as a disappointing profit outlook from Target dragged down retailers and as investors braced for President Donald Trump's address to Congress.
Dow Jones closed up by 0.57 percent, S&P 500 ended up by 0.65 percent, Nasdaq finished the day up by 0.95 percent.
Treasuries Recap
U.S. Treasury yields edged lower on Tuesday on month-end buying, while investors' wait-and-see approach ahead of an evening speech by U.S. President Donald Trump to the U.S. Congress limited the move.
Benchmark 10-year U.S. Treasury notes were last up 4/32 in price to yield 2.351 percent. Yields on the notes hit a session low of 2.345 percent in morning U.S. trading, down about two basis points from late Monday.
U.S. 30-year Treasury bonds were last up 8/32 in price to yield 2.972 percent, from a yield of 2.985 percent late Monday. The yields touched a session low of 2.966 percent.
U.S. two-year notes were last roughly flat in price to yield 1.193 percent, from a yield of 1.204 percent late Monday.
Commodities Recap
The price of gold turned downward on Tuesday as the dollar came off its lows and financial markets awaited U.S. President Donald Trump's speech to Congress later this evening regarding his policies on tax reforms and government spending.
Spot gold was down 0.1 percent at $1,250.93 an ounce by 3:10 p.m. EST (2010 GMT), below the previous session's 3-1/2-month high of $1,263.80. It was on track to finish February up around 3.3 percent, marking its second straight monthly rise. U.S. gold futures settled 0.4 percent lower at $1,253.90 an ounce.
