Markets Roundup
- New Zealand S/Adj Median House Price Prices +1.3% in Jan on Pvs Month - Reinz
- New Zealand S/Adj Median House Price Prices +4.9% in Jan on Year Ago
- New Zealand Jan Month S/Adj PMI 57.9 - Business NZ/Bank NZ Survey
- Moody's Comfortable With NZ AAA Rating - Moody's Senior Vice President
- New Zealand economy very resilient to Global Environment - Moody's Senior V/President
- UK Rics Jan House Price Balance +49 vs Downwardly Rvsd Dec +49 (Reu Poll +52)
- UK Rics Says Demand for Houses up due to Buy-To-Let Investors Seeking to Avoid April Tax Rise
- Confederation of British Industry Cuts 2016 GDP Forecast to +2.3%, 2017 +2.1% (Nov: 2016 +2.6%, 2017 +2.4%)
Economic Data Ahead
- (0300 ET/0800 GMT) Slovakia Industrial Output
- (0315 ET/0815 GMT) Switzerland CPI
Key Events Ahead
- (0400 ET/0900 GMT) IRELAND 10Y 1.000B 1.000% 15/05/26
- (0500 ET/1000 GMT) ITALY 3Y B 0.300% 15/10/18 . EUR1.5-2.0
- (0500 ET/1000 GMT) ITALY 7Y B 1.450% 15/09/22 . EUR2.0-2.5
- (0500 ET/1000 GMT) ITALY 14Y B 3.500% 01/03/30 . EUR0.5-1.0
- (0530 ET/1030 GMT) UK 29Y 1.500B 3.500% 22/01/45 TAP
FX Beat
USD: The dollar index hit a 3-1/2-month low against a basket of six major currencies. It touched a low of 95.508, its lowest level since Oct. 22, and was last trading at 95.62.
EUR/USD: The euro trades flat at 1.1291 levels, away from previous session low of 1.1160. Earlier in the session, the pair edged up to 1.1319, nearing a 3-1/2-month high of 1.1337 hit on Feb. 9. On Wednesday, Fed Chair Janet Yellen congressional testimony stated that the Fed is unlikely to reverse its plan to raise interest rates further this year. Tighter credit markets, volatile financial markets, and uncertainty over Chinese economic growth have raised risks to the U.S. economy, she added further. In absence of relevant macro data, markets will now shift their focus towards Yellen's testimony and the weekly jobless claims scheduled later in the day . The pair moves between a thin range of 1.1273 - 1.1319. Immediate resistance is located at 1.1337 (Feb 9 High), while support is seen at 1.1243 (5-DMA).
USD/JPY: The dollar hit a 15-month low against the yen on Thursday, as the pair came under renewed selling pressure, after comments from Federal Reserve Chair Janet Yellen gave investors no reason to change their perspective that the next rate hike will be a long time coming. Following Yellen's comments, investors continued to buy safe-haven yen resulting the dollar to slide below 113.00 yen for the first time since November 2014 and hit a 15-month low of 112.53 yen. Markets now await Fed Chair Yellen's testimony and U.S. weekly jobless claims for fresh cues. Currently the pair trades at 112.70, hovering towards sessions low of 112.53. Immediate support is seen at 112.53 (Sessions Low), break below could drag the pair for further losses. On the upside resistance is located at 114.75 (5- DMA).
AUD/USD: The Australian dollar rose to a high of 0.7153 earlier in the session after the head of the Fed gave investors no reason to expect U.S. rates hike any time soon. The Aussie has bounced off this week's trough of 0.6973 and was holding up amid current risk averse environment. The pair is also strengthened by a rebound in iron ore and gold prices, Australia's key exports. Looking ahead, attention now shifts towards Yellen's testimony and Australia's central bank chief Glenn Steven's speech for fresh insights on the monetary policy outlook. Currently the pair trades at 0.7097 levels, hovering away from sessions low of 0.7083. Immediate support is located at 0.7050 (Feb 8 Low), while resistance is seen at 0.7153 (Sessions High).
NZD/USD: The New Zealand dollar rose to a weekly high of 0.6734 on Thursday as the greenback stayed on the defensive after the head of the Federal Reserve gave investors no reason to expect U.S. rates will be lifted any time soon. The main focus overnight was Fed Chair Janet Yellen's congressional testimony in which she stated that the Fed was on a gradual policy tightening path. The kiwi gained momentum as the Bank of New Zealand-Business NZ's PMI rose to 57.9 against previous 56.7, recording its highest since October 2014. The pair currently trades at 0.6676 levels, drifting way from this week's low of 0.6563. Resistance is located at 0.6734 (Sessions High), while support is seen at 0.6646 (5-DMA) on the downside.
Equities Recap
Asian shares were mixed on Thursday as investors sought the safety of Japanese yen, gold and top-rated bonds while dumping U.S. dollars on bets the Fed could be done raising interest rates.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 1.1 percent, while Australia's S&P/ASX 200 Index edged up 0.80 pct at 4,813.80 Points, with Seoul Shares re-opened with a 2.97 percent drop.
Commodities Recap
Gold surged to its highest in 8-1/2 months on Thursday as investors bet that the Fed could find it hard to hike U.S. interest rates this year, while safe-haven demand amid a tumble in equities and the dollar boosted the metal. Spot gold advanced to an intra-day high of $1,213 an ounce, its highest since May 22, while U.S. gold rose to an intra-day high of $1,215.30 an ounce, a near-nine-month peak. Silver edged up 0.5 percent to $15.35 an ounce, hovering near a 3-month high touched earlier this week.
Oil prices declined on Thursday as record U.S. crude inventories at the Cushing delivery point and worries about a global economic slowdown weighed on markets. International benchmark Brent crude futures were trading at $30.53 per barrel at 0301 GMT, down 31 cents, while U.S. West Texas Intermediate crude futures were at $26.96 per barrel, down 49 cents and within a dollar of the $26.19 a barrel 2003 low from January.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 1.6732 percent.
Australian government bond futures were firmer with the 3-year bond contract up 2 ticks at 98.290, with the 10-year contract edged up 3 ticks to 97.6300, while New Zealand government bonds were lower 2 basis points across the curve.
Canadian government bond prices were mixed across the maturity curve, with he benchmark 10-year adding 45 Canadian cents to yield 0.999 percent, a fresh record low as investors flock to safety, while the 2-year price down 1.5 Canadian cents to yield 0.36 percent. The yield curve flattened, with the spread between the 2-year and 10-year yields narrowing by 5.5 basis points to 63.9 basis points.
