Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Gold and Silver Prices Climb in Asian Trade as Markets Eye Key U.S. Economic Data 
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices 
Nikkei 225 Hits Record High Above 56,000 After Japan Election Boosts Market Confidence 
Bank of Japan Signals Readiness for Near-Term Rate Hike as Inflation Nears Target 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
Jerome Powell Attends Supreme Court Hearing on Trump Effort to Fire Fed Governor, Calling It Historic 
India–U.S. Interim Trade Pact Cuts Auto Tariffs but Leaves Tesla Out 
South Africa Eyes ECB Repo Lines as Inflation Eases and Rate Cuts Loom 
Asian Stocks Slip as Tech Rout Deepens, Japan Steadies Ahead of Election 
The Federal Reserve is expected to maintain its dovish stance with the Fed Funds Futures market almost fully pricing in two 25 bp rate cuts by end2020. It will finally prop up EM Asian currencies as the 2019-nCoV outbreak is likely to show signs of stabilization in the next one to two weeks as Dr Zhong and Dr Zhang said earlier, according to the latest research report from Scotiabank.
US real consumer spending nudged up 0.1 percent m/m in December, down from a 0.3 percent m/m growth in the prior month. In the meantime, US consumer income increased 0.2 percent m/m in December compared to market estimate of 0.3 percent m/m, which casted a shadow on the outlook for consumption growth this year.
In addition, PCE inflation and core PCE inflation, the Fed’s favourite inflation gauges, both came in at 1.6 percent y/y in December. It indicated still-muted inflationary pressures, the report added.
While the FOMC last week judged the current stance of monetary policy is appropriate to support sustained expansion of economic activity, Fed Chairman Jerome Powell said at his post FOMC press conference that the Fed is "not comfortable with inflation running persistently below our 2 percent symmetric objective."
"We maintain our short USD/CNH and short USD/INR positions as China’s central bank is expected to defend the yuan exchange rate amid hovering concerns over the 2019-nCoV outbreak," Scotiabank further commented in the report.
Meanwhile, the PBoC said in a statement dated February 2 that it will conduct CNY 1.5tn of reverse repos on Monday when onshore markets reopen after the extended Chinese New Year holiday, injecting a net CNY150 billion of funds to the banking system for onshore financial market stability.
