Market Roundup
- BoJ's policy decision was made by 8-1 vote.
- BoJ keeps policy unchanged, to maintain QQE, up monetary base, economy recovering moderately; exports-output revised upwards, core consumer inflation likely to slow on falling oil prices.
- BoJ: Private consumption has remained resilient but recovery in some areas has been sluggish.
- IMF Shinohara: Global growth uneven, fragile, challenges for developing Asia, low China-Russia-EZ-Japan growth/volatile markets weigh on investment.
- Against the yen, euro fetched 136.06 yen, compared with Tuesday's low of 133.96 yen.
- Australia January Westpac/MI leading index 98.0, December 97.92.
- Dairy prices rise, volumes decline at NZ Fonterra auction, GDT index +10.1%.
Economic Data Ahead
- (0400 ET/0900 GMT) Spain Dec trade balance; previous bln deficit.
- (0430 ET/0930 GMT) UK Jan claimant count, -25k consensus; previous -29.7k.
- (0430 ET/0930 GMT) UK Dec ILO unemployment, 5.8% consensus; previous 5.8%.
- (0430 ET/0930 GMT) UK Dec average earnings ex-bonus/3-mo, +1.8%, +1.7% consensus; previous +1.8%, +1.7%.
- (0500 ET/1000 GMT) Switzerland Feb ZEW investor sentiment index; previous -10.8.
- (0500 ET/1000 GMT) Italy Dec current account balance; previous bln surplus.
- (0830 ET/1330 GMT) US Jan PPI, -0.4% m/m, +0.3% y/y consensus; previous -0.2%, +1.1%.
- (0830 ET/1330 GMT) US Jan Ex-food/energy, +0.1% m/m, +2.0% y/y consensus; previous +0.3%, +2.1%.
- (0830 ET/1330 GMT) US Jan housing starts, 1.07 mln AR consensus; previous 1.09 mln, +4.4% m/m.
- (0830 ET/1330 GMT) US Jan building permits, 1.07 mln AR consensus; previous 1.06 mln, +0.6% m/m.
- (0915 ET/1415 GMT) US Jan industrial/mfg output, both +0.3% m/m consensus; previous -0.1%, +0.3%.
- (0915 ET/1415 GMT) US Jan capacity utilization, 79.9% consensus; previous 79.7%.
Key Events Ahead
- (0130 ET/0630 GMT) BoJ Gov Kuroda press conference.
- N/A ECB Governing Council meeting, no rate announcement scheduled.
- N/A Sweden government bond, Portugal E2-2.5 bln 3/11-mo bill auctions.
- (0300 ET/0800 GMT) Riksbank DepGov Skingsley speech in Stockholm.
- (0430 ET/0930 GMT) BoE MPC February 5 meeting minutes, 9-0 vote for no change in policy expected.
- (0530 ET/1030 GMT) Germany E4 bln 0.5% 2025 Bund auction.
- (1230 ET/1730 GMT) US Treasury Dynan speech in Washington, DC.
- (1400 ET/1900 GMT) FOMC January meeting minutes.
- (1700 ET/2200 GMT) Fed Gov Powell lecture at NYU.
FX Recap
EUR/USD: The euro held firm on Wednesday, eliciting some support as investors expected Greece to find a solution with the eurozone partners and avoid a chaotic exit from the common currency area. The pair traded at 1.1405, holding above this week's low of 1.13195 hit on Monday.
USD/JPY: The yen showed muted reaction when the BOJ kept its monetary policy stance unchanged, as expected. The pair was down 0.1 percent and last traded at 119.15, largely unchanged from the levels seen ahead of the central bank's policy decision. On the topside, immediate resistance is seen at 119.44 levels, above which gains could be extended to 119.64 levels. On the flipside, pair is likely to find support at 118.89 levels and further at 118.50 levels.
AUD/USD: The Australian dollar held on to the gains in narrow trading range on Wednesday as risk appetite was underpinned by expectations of a Greek debt deal and a USD5.1 billion takeover of Australia's Toll Holdings. AUD/USD traded at 0.7819, up 0.6 percent on Tuesday and within sight of 0.7877, this month's high. Trading was on the lighter side with much of Asia closed for Lunar New Year holidays.
NZD/USD: The New Zealand dollar held steady at , after hitting a three-week high of in offshore trade subsequent to a rise in global milk prices. Strong selling orders were seen towards , with resistance located at , the 23.6 percent retracement of the sell-off since mid-July previous year. Pair's gains were in part limited by the view that an increase in dairy prices was driven by the likelihood of lower supply levels due to drought conditions, which would hamper the overall economy and the NZD.
