Market Roundup
- BoJ - Negative interest rates scope seen capped at Y30 trln.
- MoF flow data week-ended Jan 30 - Japanese buy net Y242.1 bln foreign stocks, sell Y85.4 bln bonds, buy Y49.9 bln bills; foreign investors sell net Y364.1 bln Japanese stocks, buy Y449.4 bln bonds, sell Y486.3 bln bills.
- Sharp set to accept Hon Hai Y700 bln+ offer, rejects state-backed rescue.
- PBOC Lu - Growth to remain weak, deflationary pressure up.
- Conservative investors get welcome boost from US Treasury yields.
- BoC Murchison - Weaker CAD means stronger non-resource sector, inflation to return to 2% by end-'17.
- Australia Q4 NAB business confidence index +4, Q3 +1, conditions +9 vs +10.
- RBNZ Assistant Gov McDermott - Forecasts not commitment to policy, price stability to remain focus, would be happy to see lower NZD.
Economic Data Ahead
- (0730 ET/1230 GMT) US January Challenger layoffs; last 23.62k.
- (0830 ET/1330 GMT) US Q4 production/labour costs - prelim, -1.8/+3.9% eyed; last +2.2/+1.8%.
- (0830 ET/1330 GMT) US weekly initial jobless claims, 280k eyed; last 278k.
- (1000 ET/1500 GMT) US December factory orders, -2.8% m/m eyed; last -0.2%.
Key Events Ahead
- N/A Buba Frankfurt conference, ECB Pres Draghi, others to speak (final day).
- (0400 ET/0900 GMT) ECB bulletin.
- (0430 ET/0930 GMT) Spain E2.5-3.5 bln 0.55/1.95/4.2% 2019/26/37 Bono/Bono-ei auctions.
- (0450 ET/0950 GMT) France E7.5-8.5 bln 1.0/3.5/4.0% 2025/26/38 OAT auctions.
- (0500 ET/1000 GMT) EC Moscovici Brussels press conference on latest economic forecasts.
- (0700 ET/1200 GMT) BoE MPC policy announcement, no changes to bank rate, QQE eyed, 8-1 vote.
- (0700 ET/1200 GMT) ECB Mersch speech at Zurich UBS conference.
- (0830 ET/1330 GMT) Dallas Fed Kaplan in Dallas panel discussion.
- (0900 ET/1400 GMT) US TsySec Lew at Washington, DC event.
- (1700 ET/2200 GMT) Cleveland Fed Mester speech at MNI New York event.
FX Recap
EUR/USD: The single currency gained over 1.5% on Wednesday and made fresh 3 month high at $1.1145 levels. Currently pair is trading around $1.1087 levels. Yesterday US data released with mixed note like US ADP data came with positive number at 205K vs 193K expected while ISM Non manufacturing PMI data released with negative numbers at 53.5 vs 55.1 expected. Today is data light calendar for the Euro zone. Pair made intraday high at $1.116 and low at $1.1074 levels. On the top side resistance level is seen around $1.1145 and support level is seen at $1.1044 levels.
USD/JPY: Pair is currently trading around 1.78% lower at ¥117.93 on Thursday, before easing off yesterday's low of ¥117.05, the weakest level since January 21. It made intraday high at ¥118.24 and low at ¥117.64 levels. Today is data free calendar for the Japan. Market shifts their focus on US economic data for the further direction. On the top side resistance level is seen at 118.41 and support level is at 117.05 levels.
GBP/USD: Yesterday the British pound climbed 1.46% against the greenback and made high at $1.4649 levels. During Asian hours, US dollar recovers somewhat against sterling and currently trading at $1.4568 levels. Traders will now shift their attention to the Bank of England's monetary policy decision, the Monetary Policy Committee meeting minutes and the Inflation Report all due on Thursday. Pair made intraday high at $1.4603 and low at $1.4567 levels. Initial resistance level is seen at $1.4725 levels and on the other side support levels is seen at $ 1.4432 levels.
NZD/USD: The New Zealand dollar slipped against the greenback on Thursday after central banker John McDermott said the RBNZ would be happier with a lower exchange rate. The pair was trading down 0.25% at $0.6641 after McDermott's comments on Thursday, from $0.6660 beforehand. Pair made intraday high at $0.6684 and low at $0.6641 levels. Major resistance level is seen at $0.6697 and support level falls at $0.6558 levels.
AUD/USD: The National Australia Bank Quarterly Business Confidence Index rose from a revised 1 in the third quarter to 4 in the December quarter, where a positive reading indicates improving business conditions in Australia. Pair made intraday high at 0.7191 levels and low at $0.7153 levels. On the top side resistance level is seen at $0.7327 and support level falls at $0.7002 levels.
Equities Recap
Asian stocks outside Japan are trading on higher note on early Asian hours. The main key driver behind the rally is rebound in Commodity prices.
Nikkei 225 index was trading 0.71% lower at 17,069.59 points. Apart from Japan, all other Asian markets are trading on higher note.
Kong's Hang Seng Index rallying 1.54% to 19,291.05 points and China's Shanghai Composite Index adding 0.84% to trade at 2,761.47 points.
South Korea's Kospi Composite Index gained 1.05% to trade at 1,910.87 points.
Australia's benchmark S&P/ASX 200 index was 1.93% higher to 4,970.80 points on Thursday while New Zealand's benchmark S&P/NZX50 adding just 0.09% to trade at 6,138.68 points.
Commodities Recap
Crude oil futures extended gains from the previous session on Thursday as a weaker dollar and unconfirmed talk of production cuts lifted the market. U.S. crude futures were trading at $32.46 per barrel at 0456 GMT on Thursday, up 18 cents from the previous session's close when they rallied 8 percent from below $30 per barrel.
Gold stayed near a three-month high on Thursday and remain well supported around $1140 levels. Gold has benefited from the uncertainty on the timing of the next U.S. rate hike, burnishing its safe-haven draw that has been on full display since the year began as investors shunned risky assets.
Spot gold was little changed at $1,140.90 an ounce by 0226 GMT, after rising as high as $1,145.60 on Wednesday.
Treasuries Recap
Japan 03-month treasury discount bill auction lowest price 100.0260, average price 100.0337, bids accepted at lowest price 7.1396 pct.
New Zealand government bonds eased across the curve, sending yields 4 basis points higher.
Australian government bond futures edged off multi-month peaks, with the three-year bond contract down 5 ticks at 98.160. The 10-year contract also lost 5 ticks to 97.4300, having surged to 97.5100, a level last touched last in August.
