Global Markets:

  • Asian stock markets: Nikkei up 2.30 %, Shanghai Composite gained 0.40 %, Hang Seng rose 1.70 %, ASX 1.20 % higher
  • Commodities: Gold at $1248 (-0.25 %), Silver at $17.48 (-0.40 %), Crude Oil at $82.50 (unch)
  • Rates: US 10 year yield at 2.21, German 10 year yield at 0.867, UK 10 year yield at 2.17

News & Data:

  • Australia CPI QoQ 0.5 %, Expected: 0.4 %, Previous: 0.5 %
  • Australia CPI YoY 2.3 %, Expected: 2.3 %, Previous: 3.0 %
  • Japan Trade Balance -958bln, Expected: -777bln, Previous: -949bln
  • Japan Exports YoY 6.9 %, Expected: 6.8 %, Previous: -1.3 %
  • Japan Imports YoY 6.2 %, Expected: 3.0 %, Previous: -1.5 %
  • Australia CB Leading Index -0.2 %, Previous: 0.6 %
  • Australia MI Leading Index -0.1 %, Previous: -0.1 %
  • Japan’s Chief Cabinet Secretary Suga: Monitoring forex, oil price moves
  • China’s Vice Premier Zhang: Global economic recovery remains difficult; calls for more international economic policy dialogue
  • China’s Vice Premier Zhang says that total imports to hit $10T in next 5 years
  • China’s Vice Premier Zhang says he’s full of confidence in China’s Economy; China Consumer Prices are stable

 

Markets Overview:

US equities closed higher yesterday with the S&P 500 gaining 2 % and the DJIA up 1.30 %. Asian stock markets have picked up the “risk-on” sentiment and all major indices are up on the day. Precious metals declined as the USD regained some strength and Gold is back below $1250. Crude Oil had another volatile session yesterday and has currently settled around $82.50.

The Euro declined across the board yesterday after a Reuters report that the ECB may begin buying corporate bonds as early as in the first quarter of 2015. EUR/USD declined to 1.2705 on selling from macro funds and other leveraged names. Banks also reported decent selling interest from HFs in EUR/CAD and EUR/AUD. Flows were lighter in the Asian session, as the pair consolidated between 1.2705 and 1.2730. Stops in good size noted through 1.2680 and next key support seen in the 1.2600/20 area. To the topside, leveraged funds are said to have offers lined up at 1.2770 to 1.2780.

The GBP/USD topside was capped at 1.6180 and the pair fell in sympathy with the EUR/USD. 1.61 support held overnight, but stops through 1.6085 look weak. Short-term specs could be caught long Cable should USD strength return, paving the way for another test of the key 1.60 support level.

USD/JPY opened above 107.00 in Asia, but failed to sustain momentum above there. The pair slowly declined to 106.80 with flows light. One US hedge fund was a reported seller after the Tokyo open, while activity from local corporations remain low. Dealers see solid bids at 106.60, while offers reported 107.10-20 with stops resting above.

AUD/USD dropped from 0.8770 to 0.8742 as the Trimmed Mean CPI missed expectations. The drop was quickly retraced however, as the main inflation figures were solid with the QoQ figure beating expectations by 0.1 % and the YoY number in line with forecasts. 0.8740 and 0.8830 the key levels intraday.

 

Upcoming Events:

  • 08:30 GMT – MPC Meeting Minutes
  • 08:30 GMT – MPC vote cut (0), vote hike (2), vote unchanged (7)
  • 12:30 GMT – US CPI (0.1 % MoM, 1.6 % YoY)
  • 12:30 GMT – US Core CPI (0.1 % MoM, 1.8 % YoY)
  • 12:30 GMT – Canadian Retail Sales (0.2 % MoM)
  • 14:00 GMT – Bank of Canada Interest Rate Decision (1.00 %)
  • 14:00 GMT – Bank of Canada Monetary Policy Report
  • 15:15 GMT – Bank of Canada Governor Poloz speaks
  • 21:00 GMT – RBA Governor Stevens speaks
  • 21:45 GMT – New Zealand CPI (0.5 % QoQ)