Market Roundup
- Greece requested ECB for extra E5 bln in ELA funding after ECB revises cap upwards.
- Japan PM Abe: Q4 data shows Japan steadily escaping deflation.
- Fed Gov Powell: Regulators shouldn't lead against credit cycles, should have high bar for interference, Fed doesn't look to surprise markets when it drops "patient", higher USD headwind but won't stop US economic momentum.
- Foreign selling of US assets largest in Dec since Jan '09, net outflows $174.8 bln, Nov -$14.3 bln, China Treasury holdings $1.244 trln, Japan $1.231 trln.
- Japan Jan trade deficit trln, trln expected, exports +17.0% y/y, best since Nov '13, export volume best since Dec '10, imports -9.0%, largest fall since Nov '09.
- New Zealand Q4 PPI inputs -0.4% q/q, outputs -0.1%.
- New Zealand January job ads -1.1% m/m, +6.1% y/y still, December +2.2% m/m.
Economic Data Ahead
- (0200 ET/0700 GMT) Switzerland Jan trade balance, CHF1.2 bln surplus consensus; previous bln surplus.
- (0245 ET/0745 GMT) France Jan HICP final, -1.0% m/m, -0.3% y/y consensus; prelim +0.1%, +0.1%.
- (0245 ET/0745 GMT) France Jan HICP ex-tobacco; previous +0.1% m/m.
- (0400 ET/0900 GMT) Eurozone Dec current account balance; previous E24.6 bln surplus nsa, E18.1 bln surplus sa.
- (0400 ET/0900 GMT) Eurozone Dec net investment flow; previous E40.3 bln net inflow.
- (0600 ET/1100 GMT) UK Feb CBI industrial trends survey orders index, +6 consensus; previous +4.
- (0830 ET/1330 GMT) US w/e initial jobless claims, 293k consensus; previous 304k.
- (1000 ET/1500 GMT)EZ Feb consumer confidence index flash, -7.5 consensus; previous -8.5.
- (1000 ET/1500 GMT)US Jan leading indicators index, +0.3% m/m consensus; previous +0.5%.
- (1000 ET/1500 GMT) US Feb Philly Fed business sentiment index, 9.3 consensus; previous 6.3.
Key Events Ahead
- N/A OECD Gurria presents latest Italy survey in Rome, presser to follow.
- N/A Riksbank DepGov Jansson presentation on monetary policy in Jonkoping.
- (0430 ET/0930 GMT) Spain E3.5-4.5 bln 0.5% and 1.6% 2017 and 2025 Bono auctions.
- (0450 ET/0950 GMT) France E7.5-8.5 bln 4.25/3.75/0% 2017/19/20 OAT auctions.
- (0450 ET/0950 GMT) France E1-2 bln 0.1% 2025 index-linked OAT auction.
- (0730 ET/1230 GMT) ECB January meeting minutes.
- (1000 ET/1500 GMT) Buba Dombret speech in Frankfurt.
- (1200 ET/1700 GMT) BoC DepGov Cote speech in Quebec.
FX Recap
EUR/USD reclaimed the 1.14 level in Asian trading due to relatively less hawkish U.S. Federal Reserve minutes, which pushed the pair from 1.1340 to 1.1410. It currently trades at 1.1418. The euro could elicit more support depending on the outcome of negotiations between Eurozone finance ministers regarding Greece.
USD/JPY fell from 119.80 to intraday lows of 118.42 after the discouraging Fed minutes which caused more and more USD longs to trim positions. On the topside, immediate resistance is seen at 118.67 (50DMA) levels, above which the gains could be extended to 119 levels. On the flipside, support is seen at 118.43 (20 DMA) levels and further at 118 levels.
AUD/USD: The Australian dollar held steady on Thursday after the release of the Fed policy meeting minutes hurt the U.S. dollar. The pair traded at 0.7810, after its brief jump to 0.7840. The AUD stays vulnerable, as markets expect further rate cuts in Australia. Traders see no signs of bounce and it is likely to find support at 0.7779 and then at 0.7774 (Wed low).
NZD/USD rose to a four-week high of 0.7574 following the Fed minutes. Sellers are seen above 0.7600, and are likely to limit NZD's gains against the U.S. dollar, while technical resistance is located at $0.7569, the 23.6 percent retracement of the NZD's sell-off since mid-July. Pair's immediate resistance is seen at 0.7582 (50 DMA) levels and above which the gains could be extended to 0.7600 levels. On the flipside, pair is likely to find support at 0.7524 and below that at 0.7468 levels.
