Market Roundup
- BoJ Gov Kuroda: Achieving 2% CPI target possible, BoJ has many policy options, systemic trust important for JGB market, real interest rates negative, to stimulate investment and consumer spending.
- St Louis Fed Bullard: ZIRP not right given current US economy, jobless likely sub-5% by Q3, removing "patient" in March would allow June rate hike, low rates to remain despite hike(s), worried Fed falling behind curve.
- Foreign CB US debt holdings +$5.912 bln to $3.268 trln Feb 18 week, Treasury holdings +$5.922 bln to $2.939 trln, agencies -$768 mln to $285.927 bln.
- Japan Feb flash manufacturing PMI 51.5, Jan final 52.2, slowest expansion in 7-months.
- New Zealand govt net operating deficit to end-Dec +27.8% vs forecast, net debt 28.1% of GDP at NZ$66.46 bln, 27.8% expected.
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Jan producer prices, -0.4% m/m, -2.0% y/y consensus; previous -0.7%, -1.7%.
- (0300 ET/0800 GMT) France Feb PMI manufacturing flash, 49.5 consensus; previous 49.2.
- (0300 ET/0800 GMT) France Feb PMI services flash, 49.8 consensus; previous 49.4.
- (0300 ET/0800 GMT) France Feb PMI composite flash; previous 49.3.
- (0300 ET/0800 GMT) Sweden Feb consumer confidence index, 99.7 consensus; previous 98.6.
- (0300 ET/0800 GMT) Sweden Feb manufacturing confidence index, 106.8 consensus; previous 107.3.
- (0300 ET/0800 GMT) Germany Feb Feb PMI manufacturing flash, 51.5 consensus; previous 50.9.
- (0300 ET/0800 GMT) Germany Feb PMI services flash, 54.2 consensus; previous 54.0.
- (0300 ET/0800 GMT) Germany Feb PMI composite flash; previous 53.50.
- (0400 ET/0900 GMT) Eurozone Feb Feb PMI manufacturing flash, 51.5 consensus; previous 51.0.
- (0400 ET/0900 GMT) Eurozone Feb PMI services flash, 53.0 consensus; previous 52.7.
- (0400 ET/0900 GMT) Eurozone Feb PMI composite flash, 53.0 consensus; previous 52.6.
- (0400 ET/0900 GMT) Italy Dec industrial sales/orders; previous -0.6% m/m, -1.6% y/y, -1.1%, -4.1%.
- (0430 ET/0930 GMT) UK Jan retail sales, -0.2% m/m, +5.9% y/y consensus; previous +0.4%, +4.3%.
- (0430 ET/0930 GMT) UK Jan - ex-fuel, -0.1% m/m, +5.9% y/y consensus; previous +0.2%, +4.2%.
- (0430 ET/0930 GMT) UK Jan PSNB/ex-banks, -GBP7.8 and -9.0 bln consensus; previous , 13.12 bln.
- (0430 ET/0930 GMT) UK Jan PSNCR; previous bln.
- (0500 ET/1000 GMT) Italy Jan CPI final, -0.4% m/m, -0.6% y/y consensus; flash -0.4%, -0.6%.
- (0500 ET/1000 GMT) Italy Jan HICP final, -2.4% m/m, -0.4% y/y consensus; flash -2.4%, -0.4%.
- (0945 ET/1445 GMT) US Feb Markit mfg PMI flash, 53.6 consensus; previous 53.9.
Key Events Ahead
- N/A UK DMO GBP500 mln/1/2 bln 1/3/6-month treasury bill auction.
- (0900 ET/1400 GMT) Eurozone FinMin meeting on Greece request for 6-month bail-out extension.
- Sunday Italy Econ/FinMin Padoan speech in Bologna.
FX Recap
EUR/USD was seen trading in a narrow range in Asian session ahead of the EU's decision on Greece's request. It traded in 1.1357-72 range, consolidating losses after dropping from 1.1450 to 1.1355. The pair is likely to elicit support at 1.1342, and further at 1.1314 (50% Fib retracement level). On the topside, resistance is located at 1.1365 and 1.1429 levels.
USD/JPY stayed largely unchanged in holiday-thinned Asian session and traded in 118.85-119.10 range. The pair floats near session lows in absence of important economic releases in the day ahead. However, yen is likely to get some support against its US counterpart ahead of Greece-Euro group meeting later in the day. Pair's resistance is seen at 119.08 levels and further at 119.20 levels. On the flipside, next support is seen at 118.51 (20-DMA) levels, below which losses could be extended to 118 levels.
AUD/USD opened in Asia at 0.7794 and edged higher from 0.7789 to 0.7812, moving away from yesterday 0.7757 retracement low. The AUD continues its strengthening pattern after the S&P rating made it clear that there was no major near term risk to Australia's AAA credit rating. Bids are seen firm below 0.7750, while offers are also equally strong around 0.7850.
NZD/USD traded in a tight 0.7515-35 range in Asian session and closed in New York at 0.7517. On the upside, resistance is located at 0.7575 levels and on the downside, pair is likely to get support ahead of 0.7500.
