Market Roundup
- British lawmakers instruct May to change Brexit deal; EU says 'No'
- Apple services business grows; CEO Cook says China tensions ease
- U.S., China face deep trade, IP differences in high-level talks
- China fast tracks new foreign investment law as U.S. talks loom
- White House to seek big domestic spending cuts; budget will be late
- Global oil industry braces for turmoil from U.S. crackdown on Venezuela
- Japan Dec Retail Sales YY, 1.3%, 0.8% f'cast, 1.4% prev
- Australia Q4 CPI QQ, 0.5%, 0.4% f'cast, 0.4% prev
- Australia Q4 CPI YY, 1.8%, 1.7% f'cast, 1.9% prev
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Feb GfK Consumer Sentiment, 10.3 f'cast, 10.4 prev
- (0200 ET/0700 GMT) Germany Dec Import Prices YY, 2.1% f'cast, 3.1% prev
- (0430 ET/0930 GMT) Great Britain Dec BoE Consumer Credit (GBP), 0.80 bln f'cast, 0.92 bln prev
- (0430 ET/0930 GMT) Great Britain Dec Mortgage Lending (GBP), 3.45 bln f'cast, 3.45 bln prev
- (0430 ET/0930 GMT) Great Britain Dec Mortgage Approvals, 63.0k f'cast, 63.72k prev
- (0500 ET/1000 GMT) EZ Jan Consumer Confidence Final, -7.9 f'cast, -7.9 prev
- (0500 ET/1000 GMT) EZ Jan Business Climate, 0.75 f'cast, 0.82 prev
- (0500 ET/1000 GMT) EZ Jan Economic Sentiment, 106.8 f'cast, 107.3 prev
- (0500 ET/1000 GMT) EZ Jan Industrial Sentiment, 0.5 f'cast, 1.1 prev
- (0500 ET/1000 GMT) EZ Jan Services Sentiment, 11.1 f'cast, 12.0 prev
- (0800 ET/1300 GMT) Germany Jan HICP Prelim YY, 1.7% f'cast, 1.7% prev
- (0800 ET/1300 GMT) Germany Jan CPI Prelim YY, 1.6% f'cast, 1.7% prev
Key Events Ahead
- N/A Bank of Lithuania's Marius Jurgilas participates in FinTech conference - Paris
- (1400 ET/1900 GMT) Fed's FOMC announces decision on interest rates followed by statement - Washington
- (1430 ET/1930 GMT) Fed Chairman Jerome Powell holds news conference - Washington
- (1850 ET/2350 GMT) BoJ releases summary of opinions from board members at its Jan. 22-23 policy meeting - Tokyo
FX Beat
DXY: The dollar index tumbled, as investors’ awaited Federal Reserve policy guidance and the outcome of the trade talks between the United States and China. The greenback against a basket of currencies trades 0.1 percent down at 95.73, having touched a low of 95.62 on Tuesday, its lowest since Jan. 15. FxWirePro's Hourly Dollar Strength Index stood at -70.32 (Bearish) by 0500 GMT.
EUR/USD: The euro rose, extending gains for the fourth straight session, despite a key gauge of the market's long-term expectations for inflation in the euro zone eased to its lowest level since late 2016. The European currency traded 0.1 percent up at 1.1438, having touched a high of 1.1450 on Tuesday, its highest since Jan. 15. FxWirePro's Hourly Euro Strength Index stood at 96.94 (Slightly Bullish) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone and Economic sentiment indicator, ahead of the U.S. pending home sales and the Fed's interest rate decision. Immediate resistance is located at 1.1466 (December 31 High), a break above targets 1.1496 (January 2 High). On the downside, support is seen at 1.1370 (Jan. 17 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar edged lower as investors cautiously awaited the Fed's policy outlook after recent comments from officials signalled a slower pace of rate increases this year amid mounting uncertainties over the health of the U.S. economy. The major was trading 0.05 percent down at 109.34, having hit a low of 109.13 on Tuesday, its lowest since January 18. FxWirePro's Hourly Yen Strength Index stood at -24.75 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. pending home sales and Fed's interest rate decision. Immediate resistance is located at 109.88 (Jan. 18 High), a break above targets 110.47 (Dec. 31 High). On the downside, support is seen at 108.70 (Jan. 2 Low), a break below could take it lower at 108.44 (Jan. 8 Low).
GBP/USD: Sterling gained, reversing some of its previous session losses after British lawmakers instructed Prime Minister Theresa May to reopen a Brexit treaty with the European Union to replace the Irish border arrangement. The major traded 0.2 percent up at 1.3086, having hit a high of 1.3217 on Friday; it’s highest since October 16. FxWirePro's Hourly Sterling Strength Index stood at -100.53 (Highly Bearish) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3170, a break above could take it near 1.3257 (October 12 High). On the downside, support is seen at 1.3021 (November 6 Low), a break below targets 1.3000. Against the euro, the pound was trading 0.1 percent down at 87.40 pence, having hit a high of 86.16 on Friday, it’s highest since May 2017.
AUD/USD: The Australian dollar rebounded, halting a 2-day losing streak after domestic data showed consumer prices rose 0.5 percent in the December quarter and 1.7 percent for the year, slightly above forecasts. The Aussie trades 0.6 percent up at 0.7196, having hit a high of 0.7203 on Monday; it’s highest since January 18. FxWirePro's Hourly Aussie Strength Index stood at 95.70 (Slightly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7115 (Jan. 22 Low), a break below targets 0.7085 (December 20 Low). On the upside, resistance is located at 0.7246 (December 13 High), a break above could take it near 0.7300 (November 20 High).
NZD/USD: The New Zealand dollar advanced, extending gains from the prior session, as the greenback declined ahead of the Federal Open Market Committee policy meeting. The Kiwi trades 0.3 percent up at 0.6851, having touched a high of 0.6872 on Monday, its highest level December 18. FxWirePro's Hourly Kiwi Strength Index was at 144.87 (Highly Bullish) by 0500 GMT. Immediate resistance is located at 0.6911 (Dec. 11 High), a break above could take it near 0.6944 (Dec. 5 High). On the downside, support is seen at 0.6799 (Jan. 15 Low), a break below could drag it below 0.6726 (Jan. 7 Low).
Equities Recap
Asian shares consolidated within narrow ranges, as investors remained on the sidelines ahead of the Federal Reserve's policy decision.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei declined 0.4 percent to 20,583.14 points, Australia's S&P/ASX 200 index rose 0.2 percent to 5,886.70 points and South Korea's KOSPI rallied 0.7 percent to 2,197.58 points.
Shanghai composite index declined 0.2 percent to 2,589.24 points, while CSI300 index traded 0.2 percent down at 3,188.34 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 27,560.76 points. Taiwan shares added 0.1 percent to 9,932.26 points.
Commodities Recap
Crude oil prices surged as concerns about supply disruptions following U.S. sanctions on Venezuela's oil industry offset downward pressure from a worsening outlook for the global economy. International benchmark Brent crude was trading 0.7 percent up at $61.66 per barrel by 0458 GMT, having hit a low of $59.47 on Monday, its lowest since January 15. U.S. West Texas Intermediate was trading 0.6 percent higher at $53.52 a barrel, after falling as low as $51.31 on Monday, its lowest since the January 17.
Gold prices rallied to a fresh 8-1/2 month peak earlier in the session, supported by uncertainty over U.S.-China trade relations and expectations the U.S. Federal Reserve will keep rates on hold later in the day. Spot gold was trading 0.2 percent up at $1,313.83 per ounce by 0501 GMT, having touched a high of $1,314.53 earlier, its highest level since May 15. U.S. gold futures rose 0.3 percent to $1,312.30 per ounce.
Treasuries Recap
The Australian government bonds slumped across the curve during Asian trading session following better-than-expected Q4 inflation data, where the Q4 core inflation came in in line with RBA’s expectations, while headline inflation was a little stronger than market consensus. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1basis point to 2.253 percent, the yield on the long-term 30-year bond also jumped 1-1/2 basis points to 2.771 percent and the yield on short-term 2-year also traded 4 basis points higher at 1.873 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 4 Canadian cents to yield 1.854 percent and the 10-year climbed 20 Canadian cents to yield 1.940 percent.
