Markets Roundup
- Australia Dec owner-occupied housing fiancé +2.6% m/m, +3% forecast, investment housing finance +0.6%.
- New Zealands Jan food price index +2.6% m/m but -0.6% y/y.
- BoJ Gov Kuroda - Market moves excessively risk-averse, out of line with fundamentals, won't hesitate to ease more if needed, BoJ policy not "incremental", market rout not due to negative rates, Japan financial institutions have sufficient capital, discussed financial market situation- global economic situation with PM Abe - Reuters.
- Japan FinMin Aso - Recent FX moves sudden, "rough", will take appropriate action if needed, no comment on whether Japan intervened, want to consider G20 policy coordination - Reuters.
- EconMin Ishihara - Eyeing domestic-int'l developments closely.
- PM Abe advisor Honda - BoJ emergency meeting possible - Nikkei.
- MoF flow data week-ended Feb 6 - Japanese buy net Y202.4 bln foreign stocks, trln bonds, Y73.2 bln bills; foreign investors sell net Y610.4 bln Japanese stocks, buy Y19.5 bln bonds, Y391.6 bln bills.
- Foreign CB US debt holdings -$6.312 bln to $3.267 trln wk-ended Feb 10, Tsy holdings -$6.831 bln to $2.955 trln, agencies +$285 mln to $263.699 bln.
- NY Fed - Swaps with foreign CBs $91 mln Feb 10 week, BoJ $1 mln, rest ECB.
- Lipper - Investors pull $1.5 bln from US-based stock funds, bond funds mixed, safety sought.
- Investor John Paulson would consider moving to Puerto Rico, gold investments doing well, stock market overreacting - Reuters.
- RBA Gov Stevens - Uncertain how global market turbulence will play out, surprised at extent of market reaction to China policy changes, exposure of Australian banks to energy small, speculation of global recession too pessimistic, RBA unlikely to up rates anytime soon, easing bias, AUD has adjusted, can't say won't fall more, commodities prices weak - Reuters.
- (0200 ET/0700 GMT) Germany Q4 GDP - flash, +0.3% q/q, +2.3% y/y forecast; last +0.3%, +1.8%.
- (0200 ET/0700 GMT) Germany Jan CPI - final, -0.8% m/m, +0.5% y/y forecast; flash -0.8%, +0.5%.
- (0245 ET/0745 GMT) France Q4 non-farm payrolls; last unch q/q.
- (0300 ET/0800 GMT) Spain Jan CPI, -1.9% m/m, -0.3% y/y forecast; last -0.3%, unch.
- (0300 ET/0800 GMT) Spain Jan HICP, -2.5% m/m, -0.4% y/y forecast; last -0.4%, -0.4%.
- (0400 ET/0900 GMT) Italy Q4 GDP - flash, +0.3% q/q, +1.2% y/y forecast; last +0.2%, +0.8%.
- (0430 ET/0930 GMT) Great Britain Dec construction output, +1.5% m/m, +0.7% y/y forecast; last -0.5%, -1.1%.
- (0500 ET/1000 GMT) Eurozone Q4 GDP - flash, +0.3% q/q, +1.5% y/y forecast; last +0.3%, +1.6%.
- (0500 ET/1000 GMT) Eurozone Dec industrial output, +0.3% m/m, +0.8% y/y forecast; last -0.7%, +1.1%.
- (0830 ET/1330 GMT) United States Jan retail sales/ex-autos, +0.1%, unch m/m forecast; last -0.1%, -0.1%.
- (0830 ET/1330 GMT) United States Jan import/export prices, -1.4%, -0.9% m/m forecast; last -1.2%, -1.1%.
- (0955 ET/1455 GMT) United States Feb U.Mich sentiment index - prelim, 92.0 forecast; last 92.0.
- (1000 ET/1500 GMT) United States Dec business inventories, +0.1% m/m forecast; last -0.2%.
- Lunar New Year, mainland China markets still closed.
- N/A UK DMO GBP1.5/2.0/2.0 bln 1/3/6-month treasury bill auctions.
- (1000 ET/1500 GMT) NY Fed Dudley press briefing, in panel discussion in New York.
- (1000 ET/1500 GMT) United States Q4 '15 Household Debt and Credit Report.
FX Beat
USD: The dollar index inched about 0.2 percent higher to 95.620, against a basket of six major currencies, poised for a 1.4 percent weekly loss, after skidding to a low of 95.236 overnight, its lowest since October.
EUR/USD: The euro trades 0.24 percent down at 1.1294 levels, after making a high of 1.1333 earlier in the session. In the previous session the pair touched a high of 1.1376, its loftiest peak since October 2015. In the Asian trade, the pair came under renewed selling pressure as markets tracked the recovery mode seen in the U.S. dollar and ignored the persisting risk-aversion set off by the slump in the Japanese stocks. Fed Chair Yellen's testimony did little to help the greenback. She noted that the central bank is likely to hike rates gradually this year as the labour market and economy continue to improve. Policymakers were not on a pre-set path to return policy to normal given a worsening meltdown in global stock markets, she further reiterated. Markets now await the German prelim GDP data ahead of the U.S. retail sales figures due later in the day. Currently the pair is seen making fresh sessions lows. Immediate support is located at 1.1278 (5-DMA), while resistance is seen at 1.1376 (Previous session High).
USD/JPY: The dollar trades 0.26 percent up at 112.69 yen against its Japanese counterpart, after drastically falling down to 110.96 yen in the previous session, its lowest level since October 2014. The pair overnight jump back above the 112-yen level led to speculation that Japanese authorities were checking currency rates, a step that often precedes intervention. The pair is seen on a gradual recovery path as markets continue to track BoJ Kuroda's comments for fresh cues. Markets will also closely watch for U.S. retail sales data due later today for further momentum on the pair. Earlier in the Asian trade, the pair touched sessions high of 113.01, before falling down to its current levels. Resistance is seen at 113.85 (5-DMA), while support is located at 111.90 (Sessions Low) on the downside.
AUD/USD: The Australian dollar trades low at 0.7101 levels, after having touched sessions high of 0.7128. The Aussies gained 0.5 percent this week as the U.S. dollar was undermined by falling Treasury yields and speculation the Federal Reserve would not be able to hike rates this year. Australia's central bank governor Glenn Stevens in his speech stated that there was scope to cut interest rates further if necessary, though he still expects moderate economic growth. Traders are likely to remain bearish in the session as global equities continue to trade in the negative zone. The pair continues to trade lower hovering towards sessions low of 0.7092. Resistance is located at 0.7153 (Previous session High), while support is located at 0.7042 (20- DMA).
NZD/USD: The New Zealand dollar traders 0.62 percent lower at 0.6672 as a sell-off in global stocks sent investors to safe-haven assets. The kiwi dropped after four days of gains after topping out at 0.6738. The fall comes as investors sentiments were badly hit by plunging shares on the Japanese indices. Traders are seen bearish in the session as the pair continues to drift towards its daily low. Immediate support is located at 0.6637 (10- DMA) on the downside, while resistance is seen at 0.6738 (Sessions High) on the upside.
Equties Recap
Asian shares dropped on Friday as mounting concerns about the health of European banks further threatened a global economic outlook already under strain from falling oil prices and slowdown in China and other emerging markets.
MSCI's index of Asia-Pacific shares outside Japan edged down 0.5 percent, Australia's S&P/ASX 200 Index closed down 1.14 Pct at 4,766.10 points, Nikkei declined 4.84 pct at 14,952.61, with Seoul Shares edged down at 1.42 pct.
Commodities Recap
Gold on Friday held on to sharp overnight gains that pushed the metal to a one-year high, as stock market turmoil stoked safe haven demand. Spot gold rose to $1,260.60 on Thursday, its highest in a year, before paring some gains to close up 4 percent in its biggest daily gain in about 2-1/2 years. On Friday, it eased 0.9 percent to $1,235.85 by 0335 GMT, while U.S. gold futures are set to post a gain of nearly 7 percent for the week, the sharpest such jump since 2008.
Crude oil prices jumped more than 5 percent on Friday after comments by an OPEC energy minister sparked hopes of a coordinated production cut. International benchmark Brent crude was trading at $31.63 per barrel at 0409 GMT, up $1.57, or 5.22 percent, from its last settlement, while U.S. West Texas Intermediate futures were trading at $27.57 per barrel, up 5.19 percent or $1.36 from the previous day's settlement after hitting lows not seen since 2003 in the previous session.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 1.694 percent versus previous close of 1.644 percent.
Australian government bond futures were a touch softer, with the 3-year bond contract off 2 ticks at 98.270. The 10-year contract shed one tick to 97.6200, while the 20-year contract was half a tick higher at 97.1000.
New Zealand government bonds gained, sending yields 2 basis points lower along most of the curve.
Canadian government bond prices were lower across the maturity curve, with the benchmark 10-year falling 7 Canadian cents to yield 1.006 percent and the 2-year price down 2.5 Canadian cents to yield 0.368 percent. The Canada-U.S. 2-year bond spread was 5.2 basis points less negative at -29.4 basis points, while the 10-year spread was 5.8 basis points less negative at -65.1 basis points as Treasuries outperformed.
