Market Roundup
- New Zealand Jan trade surplus NZ$8 mln, NZ$245.5 mln deficit forecast, year-to-Jan deficit NZ$3.578 bln, NZ$3.84 bln forecast, Jan imports NZ$3.89 bln, imports NZ$3.9 bln.
- Japan FinMin Aso - Not considering added fiscal stimulus, fundamentals not so bad, G20 to discuss China excess credit-capacity - Reuters.
- EconMin Ishihara - Can't deny overseas economies pose downside risks for Japan, need to eye many indicators to judge price trend - Reuters.
- BoJ Gov Kuroda - QQE/NIRP working but global risk aversion, technically possible to push interest rates more negative, policy won't be constrained by criticism from US presidential candidates, China likely OK - Reuters, Nikkei.
- PBOC Zhou - China has more room to support economy, economy fundamentally sound, no basis for persistent RMB depreciation, won't use currency depreciation to boost exports
- IMF Lagarde - Policymakers should go bold, go broad and go together - MNI.
- OECD - Calls for G20 structural reforms - Reuters.
- BoE Gov Carney - Warns NIRP could prove zero-sum game, global economy risks becoming trapped in low-growth, low-inflation, low-rate equilibrium, wrong to say central banks out of ammunition, fundamentals must improve - Reuters.
- German FinMin Schaeuble - Expansive policies may have laid foundation for next crisis, debt levels too high, sound finances important - Reuters.
- French FinMin Sapin - Deeply believes best for UK to remain in EU - Reuters.
- BoJ leaves more cash with US Fed - BAML.
- Jan core CPI unch y/y, as forecast, core-core +0.7%; Tokyo Feb -0.1% vs -0.2%.
- Japan Subaru CFO - Blow from strong yen but bullish on US market - Nikkei.
- China Jan new home prices +2.5% y/y, Beijing +10.3%, Shanghai +17.5%.
- SF Fed Williams - Fed should gradually up rates, never mind how many - RTRS.
- Foreign CB US debt holdings -$968 mln to $3.254 trln week-ended Feb 24, Treasuries -$2.060 bln to $2.941 trln, agencies +$1.085 bln to $264.736 bln.
- NY Fed - Swaps with foreign CBs $89 mln, BoJ $1 mln, ECB remainder.
- Lipper - US-based stock funds post $2.8 bln outflow week-ended Wednesday, 8th straight week of outflows.
- UK Feb GfK consumer confidence index at zero, +3 forecast, lowest since Dec '14, Jan +4, index for year-ahead -12, lowest since June '13, Jan -5.
Economic Data Ahead
- (0245 ET/0745 GMT) France Feb HICP - flash, +0.1% y/y forecast; last +0.4%.
- (0245 ET/0745 GMT) France Jan consumer spending, +0.6% m/m forecast; last +0.7%.
- (0245 ET/0745 GMT) France Jan producer prices; last -1.2% m/m.
- (0245 ET/0745 GMT) France Q4 GDP - detailed, +0.2% q/q forecast; prelim +0.2%.
- (0300 ET/0800 GMT) Spain Feb HICP - flash, -0.6% y/y forecast; last -0.4%.
- (0315 ET/0815 GMT) Switzerland Q4 non-farm payrolls; last 4.24 mln.
- (0330 ET/0830 GMT) Sweden Jan retail sales, +1.2% m/m, +4.0% y/y forecast; last -1.5%, +3.4%.
- (0400 ET/0900 GMT) Norway Feb unemployment, 3.3% nsa, 102.2k sa forecast; last 3.4%, 101.26k.
- (0400 ET/0900 GMT) Italy Jan wage inflation; last unch m/m, +1.3% y/y.
- (0500 ET/1000 GMT) Eurozone Feb business climate index, 0.28 forecast; last 0.29.
- (0500 ET/1000 GMT) Eurozone Feb economic sentiment index, 104.4 forecast; last 105.0.
- (0500 ET/1000 GMT) Eurozone Feb industrial sentiment index, -3.5 forecast; last -3.2.
- (0500 ET/1000 GMT) Eurozone Feb services sentiment index, 11.4 forecast; last 11.6.
- (0500 ET/1000 GMT) Eurozone Feb consumer confidence - final, -6.7 forecast; last -6.3.
- (0530 ET/1030 GMT) Belgium Feb CPI, +0.2% m/m, +1.3% y/y forecast; last +0.11%, +1.74%.
- (0800 ET/1300 GMT) GermanyFeb HICP - flash, +0.6% m/m, unch y/y forecast; last -1.0%, +0.4%.
- (0830 ET/1330 GMT) United States Q4 GDP - 2nd estimate, +0.4% q/q forecast; prelim +0.7%.
- (0830 ET/1330 GMT) United States Q4 PCE prices/core indices, +0.1% and +1.2% forecast; last +0.1%, +1.2%.
- (0830 ET/1330 GMT) United States Q4 GDP deflator, +0.8% forecast; last +0.8%.
- (0830 ET/1330 GMT) United States Jan goods trade balance - advance; last $61.5 bln deficit.
- (1000 ET/1500 GMT) United States Jan personal income, +0.4% m/m forecast; last +0.3%.
- (1000 ET/1500 GMT) United States Jan personal consumption, +0.3% m/m forecast; last unch.
- (1000 ET/1500 GMT) United States Jan PCE price index; last -0.1% m/m, +0.6% y/y.
- (1000 ET/1500 GMT) United States Jan - core, +0.2% m/m forecast; last unch m/m, +1.4% y/y.
- (1000 ET/1500 GMT) United States Feb U.Mich sentiment index - final, 91.0 forecast; prelim 90.7.
- (1300 ET/1800 GMT) United States Jan Dallas Fed PCE; last +0.9%.
Key Events Ahead
- N/A Shanghai G20 FinMins/central bankers meeting (till tomorrow).
- N/A UK DMO GBP0.5/2.0/2.0 bln 1/3/6-month treasury bill auctions.
- (0430 ET/0930 GMT) UK ONS/BoE discussion on housing costs and inflation.
- (0500 ET/1000 GMT) Italy -2.25/3.5-4 bln 0.65% and 1.6% 2020 and 2026 BTP auctions.
- (0500 ET/1000 GMT) Italy E1.5-2 bln 0.337% 2022 CCT-eu auction.
- N/A Fed Gov Powell, Brainard, ECB Praet at NY Monetary Policy Forum.
FX Beat
USD: The dollar edged down to 112.67 yen against it Japanese counterpart, after rising to 113.20 yen in Friday's early session. Against a basket of currencies, the index dollar was 0.25 percent down at 97.203.
EUR/USD: The euro advanced 0.42 percent higher at 1.1063, following a 2-week slide from a 3-1/2 month high of 1.1376. On Thursday, the greenback was boosted on the back of positive U.S. economic data as January durable goods orders came in at 4.9 percent as compared to previous -5.0 percent. U.S. February continuing jobless claims also declined to 2.253m from 2.272m, however, February initial jobless claims rose at 272k against previous print of 262, with housing price index for December edging down to 0.4 percent versus previous 0.6 percent, reversing the greenbacks gains. Inflation in Europe remained almost non-existent in January with consumer prices growing marginally 0.3 percent year-on-year, down from an earlier estimate of 0.4 percent and well below the ECB target of close to 2 percent. This would put further pressure on the ECB to add more stimulus soon, likely in March. Currently, the pair trades at 1.1060 levels, hovering towards sessions high of 1.1068. Immediate resistance is located at 1.1079 (10-DMA), while support is seen at 1.1003 (Feb 22 Low).
USD/JPY: The yen was broadly softer early on Friday as demand for the safe-haven currency faded after a rebound in oil prices helped spur a rally on Wall Street. The pair declined after making a high of 113.22 and currently trades at 112.72. On Thursday, Japan's core CPI declined 0.7% in January to be flat y/y, after recording a 0.1% increase in December. Amid recent market turmoil, investors are looking for reassurance from finance ministers and central bankers of the Group of 20 nations. Looking ahead, markets now await U.S. economic data, including that prelim GDP report, core PCE index, personal spending and consumer sentiment for further cues on the pair. Traders are likely to be bearish on the pair as it continues to drift towards session low of 112.56. Immediate support is located at 112.30 (Feb 19 Low), while resistance is seen at 113.38 (Feb 22 High).
AUD/USD: The Australian dollar trades 0.11 percent lower at 0.7227, drifting away from session's high of 0.7256. The Aussie fails to take advantage from the modest rebound seen in the base metals. However, it was on track for a weekly increase of 1.3 percent, its third week of gains, having bounced from a seven-year trough of 0.6827. The pair is likely to be driven by the sentiment on the global equities, ahead of US Q4 prelim GDP estimate scheduled later in the day. Markets will await the monthly policy meeting of the Reserve Bank of Australia on March 1, followed by Australia's GDP report is due out on Wednesday. Earlier in the session, the pair touched session's low of 0.7221, before climbing up to its currents levels. Immediate support is located at 0.7217 (5-DMA), while resistance is seen at 0.7258 (Feb 23 High).
NZD/USD: The New Zealand dollars held near this year's highest levels on Friday following upbeat data and improving risk sentiment, putting it on track for hefty weekly gains.The kiwi rose by 0.6 percent and touched an 8-week peak of 0.6774. The pair strengthened as the trade balance was better than expected. The trade balance grew from a deficit of 38.0 mn NZD in December to a surplus of 8.0 mn NZD in January, and against the forecast of a 250 mn NZD deficit. A rebound in oil prices also aided the pair to boost overnight. Attention will on oil and stocks ahead of the U.S. prelim GDP release due later in the day.
USD/CNY: The yuan eased against the dollar on Friday as the central bank set the midpoint rate at 6.5338 per dollar prior to market open, 0.03 softer than the previous fix 6.5318. The spot market opened at 6.5343 per dollar and was trading at 6.5364 at midday, easing 0.03 percent from the previous close, while the offshore yuan was trading at 6.5386 per dollar by midday and almost converged with the onshore spot, within 25 pips. The spread between the two has narrowed this week.
Equities Recap
Asian shares rose on Friday following a firmer finish on Wall Street and as investors awaited a meeting of the Group of 20 finance leaders that will likely offer reassuring words, but little in the way of actual policy stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.7 percent. Shanghai stocks added 0.7 percent, but the bounce looked unconvincing against Thursday's 6-percent slump. Taiwan Stocks edged up 0.5 pct at 8,411.16 points.
Australia's S&P/ASX 200 Index edged down 0.15 pct at 4,873.80 points, while Nikkei climbed 0.30 pct at 16,188.41, with Seoul closed up 0.11 pct.
Commodities Recap
Gold edged higher on Friday despite a rebound in stocks, underscoring support for the safe-haven metal from bullish technical's and money flows into exchange traded funds. Spot gold gained 0.2 percent to $1,236.60 an ounce by 0309 GMT, after rising 0.4 percent in the previous session. Since the beginning of the year, the inflows into the ETF fund have already surpassed outflows for the whole of 2015. Platinum declined for a third session to trade near a 2-week low of $913 an ounce reached on Thursday, while palladium was near a 6-week low reached in the previous session.
Crude oil prices declined in early trading on Friday as reports of a meeting by oil producers to freeze output failed to convince traders that enough effort was being made to rein in ballooning global oversupply. International Brent crude futures were trading at $34.89 per barrel at 0139 GMT, down 40 cents from their last settlement. U.S. West Texas Intermediate crude futures were down 21 cents at $32.86.
Treasuries Recap
U.S. 10-Year Treasuries Yield stood at 1.7243 percent up by 0.027.
Australian government bond futures were a touch firmer, with the 3-year bond contract up 1 tick to 98.270. The 10-year contract edged up 1 tick to 97.6100, while the 20-year contract was firm at 97.0750.
New Zealand government bonds gained, sending yields 2 basis points lower along most of the curve.
Canadian government bond prices were higher across the maturity curve, with the benchmark 10-year rising 12 Canadian cents to yield 1.137 percent, while the 2-year price up 1 Canadian cent to yield 0.489 percent.
