Market Roundup
- Trump to propose 10 percent spike in defense spending to $54b bln, major cuts to all other agencies – Washington Post.
- BoJ Gov Kuroda reiterates policy to remain easy, inflation to rise.
- Japan fund managers up stock exposure some, trim bonds in February.
- Japan January industrial output -0.8% m/m, +0.3% eyed, largest decline since May ’16, unexpected fall in exports of cars to US, Feb output eyed at +3.5%, previous estimate +0.8%, March output eyed at -5.0%.
- Japan January retail sales +1.0% y/y, +0.9% eyed.
- Japan January housing starts +12.8% y/y, construction orders -7.0%, Dec +3.9%, +7.1%, Jan large construction orders +1.1%, still up into ’20 Olympics.
- PBOC – Foreign firms able to repatriate profits normally.
- China SAFE – Foreigners allowed to hedge CNY risks in onshore market – MNI.
- China funds to trim equity exposure, boost bonds in next 3 months.
- China eyes 12% broad money supply rise in ‘17 – Reuters exclusive.
- China Stats Bureau – China faces external uncertainties, overcapacity.
- Australia Q4 current account deficit A$3.9 bln, A$3.6 bln eyed, exports impact on GDP +0.2%, terms of trade up most since June ’10, deficit smallest in 15 years, GDP positive.
- Australia Q4 government consumption spending flat at A$77.99 bln.
- Australia January private-sector credit +0.2% m/m, +5.4% y/y, Dec +0.7%, +5.6%, housing credit +0.5% m/m as mortgage rates ease.
- Australia January HIA new home sales -2.2% m/m, Dec +0.2%, outlook still strong.
- New Zealand February ANZ business confidence 16.6%, own activity 37.2%, Jan 21.7%, 39.6%.
- New Zealand January trade deficit NZ$285 mln, FY to Jan deficit NZ$3.47 bln, Jan imports NZ$4.19 bln, exports NZ$3.91 bln.
Economic Data Ahead
- (0200 ET/0700 GMT) Norway Jan credit indicator, +4.7% y/y eyed; last +4.8%.
- (0245 ET/0745 GMT) France Q4 GDP – details, +0.4% q/q eyed; prelim +0.4%.
- (0245 ET/0745 GMT) France February HICP – prelim, +1.7% y/y eyed; last +1.6%.
- (0245 ET/0745 GMT) France January consumer spending, +0.6% m/m eyed; last -0.8%.
- (0245 ET/0745 GMT) France January producer prices; last +0.9% m/m.
- (0300 ET/0800 GMT) Switzerland Feb KOF indicator, 102.1 eyed; last 101.7.
- (0330 ET/0830 GMT) Sweden Q4 GDP, +0.9% q/q, +2.4% y/y eyed; last +0.5%, +2.8%.
- (0330 ET/0830 GMT) Sweden January retail sales, +1.2% m/m, +1.6% y/y eyed; last -2.9%, +0.6%.
- (0330 ET/0830 GMT) Sweden January PPI; last +2.1% m/m, +6.5% y/y.
- (0330 ET/0830 GMT) Sweden January trade balance, SEK1.7 bln surplus eyed; last SEK1.0 bln surplus.
- (0400 ET/0900 GMT) Spain December current account balance; last E3.3 bln surplus.
- (0500 ET/1000 GMT) Italy February HICP – flash, +1.3% y/y eyed; last +1.0%.
- (0830 ET/1330 GMT) US Q4 GDP - 2nd estimate, +2.1% AR eyed; prelim +1.9%.
- (0830 ET/1330 GMT) US Q4 GDP deflator, +2.1% AR eyed; prelim +2.1%.
- (0830 ET/1330 GMT) US Q4 PCE price index, +2.2% AR eyed; prelim +2.2%.
- (0830 ET/1330 GMT) US Q4 - core PCE, +1.3% AR eyed; prelim +1.3%.
- (0900 ET/1400 GMT) US December CaseShiller 20, +0.7% m/m sa, +5.3% y/y eyed; last +0.9%, +5.3%.
- (0900 ET/1400 GMT) Belgium Q4 GDP – revised; prelim +0.4% q/q.
- (0945 ET/1445 GMT) US February Chicago PMI, 53.0 eyed; last 50.3.
- (1000 ET/1500 GMT) US February consumer confidence index, 111.0 eyed; last 111.8.
- (1000 ET/1500 GMT) US February Richmond Fed mfg shipments/services/comp indices; last 13, 15, 12.
- (1030 ET/1530 GMT) US February Dallas Fed Texas service sector outlook/revenues; last 21.2, 16.2.
Key Events Ahead
- N/A Tokyo Third FinTech Forum.
- N/A Basel World Banknote Summit ’17, various speakers (till tomorrow).
- (0400 ET/0900 GMT) Norges Bank monthly currency operations, February net NOK1 bln sales.
- (0415 ET/0915 GMT) BoE MPC Hogg appointment hearing.
- (0430 ET/0930 GMT) ECB zero% 7-day refi, E30 bln allotment eyed, E30.8 bln maturing.
- (0500 ET/1000 GMT) Norges Bank DepGov Matsen at Oslo CME seminar.
- (0530 ET/1030 GMT) Germany E5 bln zero% 2019 Schatz auction.
- (0530 ET/1030 GMT) Belgium E1.0-1.4 bln 3 and 6-month treasury certificate auctions.
- (0600 ET/1100 GMT) ECB/Irish CB Lane parliamentary testimony.
- (0630 ET/1130 GMT) UK ChancExch Hammond, others House of Commons testimony.
- N/A US Pres Trump interview on Fox News, Atlanta Fed Lockhart retires.
- (1500 ET/2000 GMT) Philly Fed Harker (voter, hawkish) speaks at Temple University event.
- (1530 ET/2030 GMT) SF Fed Williams (non-voter, hawkish) speaks in Santa Cruz, CA.
- (1850 ET/2350 GMT) St Louis Fed Bullard (non-voter, dovish) speaks at GWU in Washington, DC.
- (2100 ET/0200 GMT) US Pres Trump addresses Congress.
FX Recap
USD: The dollar index was little changed at 101.150 against a basket of key currencies, after posting a modest gain the previous day, when it initially went as low as 100.690. The dollar index rallied to a 14-year high soon after Trump won the U.S. elections in November, boosted by hopes that he would introduce large fiscal stimulus and reflationary plans.
EUR/USD: The euro was flat at $1.0586, having come off from a one-week high of $1.0631 scaled the previous day. Pair made intraday high at 1.0592 and low at 1.0564 marks. Immediate resistance was seen at $1.0632 level. A daily close below 1.0632 will drag the parity down towards 1.0557 levels.
USD/JPY: The yen was marginally higher against the U.S. dollar in early hours of Asia and trading around 112.54 mark. A sustained close above 112.70 is required to take the parity higher towards 113.72, 115.37 and 117.42 marks. Alternatively, a daily close below 112.70 will drag the parity down towards 111.91/110.00 levels. Japan released industrial output data with negative numbers at -0.8 (previous 0.7 %) pct while retail sales data with positive numbers at 1.0 pct (previous 0.6 %).
GBP/USD: The pound fetched $1.2430 after sliding to a 12-day low of $1.2384 the previous day as talk of another possible Scottish independence vote added to fears about Britain's future as it prepares to leave the European Union. Short term bias remains bearish till the time pair holds key resistance at 1.2478 levels. On the other side, current upside movement will take the parity higher towards key resistance around 1.2569, 1.2706 and 1.2928 levels respectively.
AUD/USD: The Australian dollar edged up 0.1 percent to $0.7682, confined to a tight $0.7688-0.7668 range. Australia's private sector credit printed at 0.2% m/m in January compared to 0.5% expected and down prior 0.7%. While, Australia's Current Account deficit narrowed to AUD 3.9 bln from prior AUD 10.2 bln, better than forecasts for deficit to come in at AUD 4 bln. Initial support and resistance levels are seen at 0.7603 and 0.7725 marks respectively.
NZD/USD: The New Zealand dollar was unchanged at $0.7189, after two consecutive days of falls. In New Zealand, data out on Tuesday showed a larger-than-expected trade deficit while business confidence dipped. New Zealand’s business confidence falls to 16.6 pct in February vs 21.7 pct in previous survey. New Zealand’s January month trade balance stood at NZ$-285.00 million.
Equities Recap
Japan’s Nikkei was trading around 0.63 percent higher at 19,228 points.
Hong Kong’s Hang seng was trading 0.05 percent higher at 23,938 points.
Australia’s S&P ASX200 was trading around 0.18 percent higher at 5,733 marks.
South Korea’s Kospi was trading 0.40 percent higher at 2,093 points.
Shanghai composite index to open down 0.1 pct at 3,225.97 points and China's CSI300 index to open flat at 3,445.03 points.
India’s NSE Nifty was trading 0.06 pct higher at 8,901 while BSE Sensex was trading at 013 pct higher at 28,850 marks.
Commodities Recap
U.S. crude oil edged higher for a second day on Tuesday, underpinned by high compliance with OPEC's production cuts even as the market remains anchored by rising U.S. production. West Texas Intermediate crude oil added 11 cents, or 0.2 percent, to $54.16 a barrel by 0337 GMT, while benchmark Brent crude oil added 17 cents, or 0.3 percent, to $56.10 a barrel. For the month, U.S. crude oil is up 2.6 percent after falling in January, while Brent oil has risen marginally.
Gold was steady on Tuesday, after falling from a 3-1/2-month high in the previous session, as investors awaited a speech by U.S. President Donald Trump later in the day for more clarity on his economic policy. Spot gold was little changed at $1,252.90 per ounce at 0241 GMT. The metal hit its highest since Nov. 11 at $1,263.80 in the previous session on Monday. U.S. gold futures fell 0.4 percent to $1,253.80.
Treasuries Recap
New Zealand government bonds eased, sending yields 1.5 basis points higher at the long end of the curve.
Australian government bond futures slipped, with both the three-year bond contract and the 10-year contract down 1 tick at 98.01 and 97.25, respectively.
10-year U.S. treasury yield was at 2.368 percent vs U.S. close of 2.367 percent on Monday.
