Market Roundup
- Dallas Fed Fisher - Rates should be upped early and gradually than steeply later, repeat of '14 growth would put jobless at 4.5% at year-end, headline inflation to bounce back when energy prices stabilize, emphasis on wages dangerous.
- China Forex Chief: Will launch China international payment system this year.
- Japan Feb money supply M2 +3.5% y/y, M3 +2.9%, broadest liquidity +3.5%.
- UK Feb BRC retail sales +0.2% m/m, +0.4% expected, +1.7% y/y, Jan +0.2%, +1.6%.
- China Feb CPI +1.4% y/y, PPI -4.8%, +0.9% and -4.3% expected, food CPI +2.4%, non-food +0.9%, food prices behind CPI spike, to stay positive near-term.
- Australia Feb NAB business conditions index steady at +2, confidence 0, Jan +3.
- NZ Feb electronic card retail sales +1.0% m/m, +3.8% y/y, Jan -0.3%, +4.0%.
Economic Data Ahead
- (0145 ET/0645 GMT) Switzerland Feb unemployment, 3.2% sa consensus; previous 3.1% sa, 3.5% nsa.
- (0245 ET/0745 GMT) France Jan industrial output, -0.3% m/m consensus; previous +1.5%.
- (0300 ET/0800 GMT) Spain Jan retail sales; previous +6.7% y/y.
- (0400 ET/0900 GMT) Italy Jan industrial output, +0.2% m/m, +0.1% y/y consensus; previous 0.4%, +0.1%.
- (0400 ET/0900 GMT) Norway Feb CPI, +0.7% m/m, +2.1% y/y consensus; previous -0.1%, +2.0%.
- (0400 ET/0900 GMT) Norway Feb - core, +0.6% m/m, +2.5% y/y consensus; previous -0.1%, +2.4%.
- (0800 ET/1300 GMT) US Feb NFIB business optimism index; previous 97.9.
- (0900 ET/1400 GMT) US Jan wholesale sales/inv, -0.3%, unch m/m consensus; previous -0.4%, +0.1%.
- (0900 ET/1400 GMT) US Jan JOLTS job openings, 5.05 mln consensus; previous 5.03 mln.
Key Events Ahead
- N/AEcoFin meeting in Brussels, French FinMin Sapin speech in Paris.
- N/AWestern Balkans conference in Vienna, various central bank attendees.
- N/ABelgium 3/12-mo treasury certificate, Spain 6/12-mo bill auctions.
- (0300 ET/0800 GMT) ECB Mersch speech at Paris conference.
- (0400 ET/0900 GMT) Netherlands E2.5-3.5 bln zero coupon 2018 DSL auction.
- (0430 ET/0930 GMT) ECB 7-day refi at 0.05%, E148.5 bln allotment eyed, E147.9 bln last.
- (0530 ET/1030 GMT) UK DMO GBP1.5bln 3.5% 2068 Gilt, Germany E2bln 0.1% 2026 Bundei auctions.
- (0935 ET/1435 GMT) BoE Gov Carney House of Lords testimony.
- (1300 ET/1800 GMT) BoE Fisher in London panel discussion.
- (1705 ET/2205 GMT) RBA AsstGov Kent speech in Hobart.
FX Recap
EUR/USD plunged to a near 12-year low on Tuesday and currently trades around 1.0798 as expectations of a mid-year hike in rates by the Fed rises, while the ECB started its QE yesterday. It is likely to find support at 1.0762 (Sept 2003 low) levels, and a break below could push the pair to 1.0500 (Mar 2003 low) levels.
USD/JPY hit an eight-year high and moved closer to a 12-year peak on Tuesday, due to the monetary policy divergence between the two countries. The dollar was boosted by strong U.S. jobs report last week, which raised expectations that the Fed will raise interest rates as soon as mid-year. The pair climbed as high as 122.04, the highest since July 2007, bouncing from an overnight low of 120.615.
AUD/USD dropped further in the Asian session to 0.7660, inching closer to a six-year low of 0.7627 hit last month. The AUD was underpinned by Australian business confidence which fell to its lowest in more than a year in February as the easing in the interest rate failed to drive out ambiguity over the economy. The pair plumbed to a five-week low of 0.7630, however, it subsequently consolidated and now trades at 0.7652.
NZD/USD slid to five week low of 0.7281 in the mid-Asian session as markets await interest rate decision by the RBNZ on Thursday. On the topside, immediate resistance is seen at 0.7341 levels, above which the gains could be extended to 0.7349 levels. On the flipside, pair is likely to find support at 0.7234 levels, and further below at 0.7174 levels.
USD/CNY remained largely unchanged in the Asian session as the PBOC set an official midpoint almost flat. Prior to market open, the central bank set the midpoint rate at 6.1572 per dollar, lower than the previous fix of 6.1563. Spot market opened at 6.2640 per dollar and was trading at 6.2639 at midday.
