Market Roundup
- EUR/GBP hits fresh 7+ year low at 0.7257.
- German lower house of parliament approves Greek bailout extension.
- EU Moscovici: If one country leaves EZ, question will arise who's next.
- Greek PM to decide in 48 hours whether to allow vote on the extension.
- Germany's Schaeuble says Greece can't change the bailout programme without agreement of IMF, EU and ECB.
- BoE research paper says EU capital markets union likely to be larger for euro zone countries that for Britain.
- Bank of England's Forbes says UK wage growth has turned around, at some point will feed through into higher inflation.
- Italy Feb Consumer Price prelim mm increase to 0.3 % (consensus 0.0 %) vs previous -0.4 %.
- Italy Feb CPI (EU norm) prelim mm increase to 0.3 % (consensus -0.2 %) vs previous -2.5 %.
- France Jan Consumer Spending mm decrease to +0.6 % (consensus -0.5 %) vs previous 1.5 %.
- France Jan Producer Prices mm stays flat at -0.9 % vs previous -0.9 %.
- Germany Jan Import Prices mm increase to -0.8 % (consensus -1.0 %) vs previous -1.7 %.
- Japan Jan Construction Orders yy increase to +27.5 % vs previous 7.5 %.
Economic Data Ahead
- (0800 ET/1300 GMT) Germany Feb HICP - prelim, +0.7% m/m, -0.4% y/y consensus; previous -1.3%, -0.5%
- (0830 ET/1330 GMT) US Real GDP (prelim Q4) consensus +2.1% q/q AR, previous +2.6% q/q AR
- (0830 ET/1330 GMT) US Real Final Sales (prelim Q4) consensus +1.6% q/q AR, previous +1.8% q/q AR
- (0830 ET/1330 GMT) US Core PCE Price Index (prelim Q4) consensus 1.1% q/q AR, previous 1.1% q/q AR
- (0945 ET/1445 GMT) Chicago PMI (Feb) consensus 58.0, previous 59.4
- (1000 ET/1500 GMT) US Pending Home Sales Index (Jan) +2.0% m/m, previous -3.7% m/m
- (1000 ET/1500 GMT) US U Michigan Sentiment (Feb) consensus 94.0, previous 93.6
- (1000 ET/1500 GMT) US Current Conditions (Feb) consensus 103.0, previous 103.1
- (1000 ET/1500 GMT) US Expectations (Feb) consensus 87.8, previous 87.5
Key Events Ahead
- (0645 ET/1145 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.550 bln)
- (0830 ET/1330 GMT) Fed Vice Chairman Fischer on "Conducting Monetary Policy with a Large Balance Sheet"
- FRB Cleveland Mester, FRB NY Dudley, Fed Vice Chair Fischer participate in U.S. monetary policy forum
FX Recap
EUR/USD has broken major support 1.1260, this confirms short term bearishness and move till 1.1100 cannot be ruled out the upside minor resistance is around 1.12600 and any break above could open way for another test of 1.1300/1.1346 (200 day HMA). Option expiries at 1.1150 (1.4B), 1.1250 (2.6B), 1.1300 (1.0B), 1.1325 (1.2B)
USD/JPY fell to sessions low at 119.12 during late Asian trading hours, but subsequently consolidated at 119.35. The pair's immediate support is seen at 118.44(Feb 19 low) and resistance at 120.47 (Feb 12 high). Option expiries at 118.50 (954M), 119.00 (723M), 119.50 (829M), 120.00 (693M)
EUR/CHF is floating near 1.0630 levels. It is likely to find strong support at 1.0600 levels and further at 1.0554 levels. On the topside, a break above 1.0800 could push the pair further to 1.0811 and then to 1.0900 levels.
GBP/USD found support at 1.5385 levels during the morning European trade after slipping from 1.5449 (early Europe high). 1.5385 is a 76.4% fibo of the climb from 1.5333 (Monday low) to 1.5554 (Thursday 8week high). EUR/GBP dropped to a fresh 7year+ low a pip shy of 0.7256 in early European session, with the subsequent rise to test 0.73. Option expiries at 1.5200 (359M), 1.5500 (301M)
USD/CAD trades around 1.2487 levels. On the topside, the immediate resistance is seen at 1.2535 levels and above which gains could be extended to 1.2566 levels. On the flipside, next support is seen at 1.2446 levels, and then at 1.2404 levels.
