Global Markets:

  • Asian stock markets: Nikkei up 0.50 %, Hang Seng declined 0.10 %, ASX rose 0.45 %, Shanghai Composite closed
  • Commodities: Gold at $1203.50 (-0.10 %), Silver at $16.31 (-0.05 %), WTI Oil at $50.88 (+0.10 %), Brent Oil at $60.40 (+0.50 %)
  • Rates: US 10 year yield at 2.108, UK 10 year yield at 1.779, German 10 year yield at 0.393

News & Data:

  • Bank of Japan Governor Kuroda say no change to stance of reaching 2% in about 2 years
  • Kuroda says CPI will rise & oil price fall to push up inflation over the longer term
  • BOJ Meeting Minutes: Members believe that price growth will likely slow due to oil fall
  • BOJ Minutes: Many of the members believe that CPI will reach 2% in or around FY2015

CFTC Positioning Update:

  • EUR net short 186K vs net short 195K prior
  • JPY net short 49K vs net short 55K prior
  • GBP net short 29K vs net short 39K prior
  • AUD net short 54K vs net short 53K prior
  • CAD net short 33K vs net short 33K prior
  • CHF net short 6K vs net short 5K prior

Markets Update:

It was a quiet trading session overnight with no major data releases or events. The Bank of Japan released their meeting minutes, but there were no surprises and hence no reaction in the JPY pairs. Precious metals have bounced overnight, but are still trading very close to key support levels – $1198 in Gold and $16.20 in Silver. Oil prices are slightly higher as well, with WTI back above the $50 level.

In FX, we saw tight ranges in most of the major pairs, except USD/CHF. Usually the Franc does not move a lot in the Asian trading sessions, but we have seen some decent moves in the past week. There has been a double bottom at 0.9380 and the pair has made it to a high of 0.9440 so far. Immediate resistance can be expected at 0.95, but the major level to the topside is 0.9540.

EUR/USD is near the centre of the 1.1260-1.1450 range and could be stuck in here for a while. Traders are now looking forward to Fed Chair Yellen’s testimony tomorrow as the next major event for the USD. GBP/USD is back below 1.54, but the bias remains mildly bullish as long as the pair remains above the 1.5320 support level. Immediate resistance noted at 1.5420, with 1.5480 now the next major obstacle for GBP bulls.

Upcoming Events:                                                      

  • 09:00 GMT – German IFO Business Climate (107.7)
  • 09:00 GMT – German IFO Current Assessment (112.7)
  • 09:00 GMT – German IFO Business Expectations (103.0)
  • 15:00 GMT – US Existing Home Sales (-0.8 % m/m, 4.97mln)

The Week Ahead (Key Data/Events):

Tuesday, February 24th

  • 07:00 GMT – German GDP (0.7 % q/q, 1.6 % y/y)
  • 10:00 GMT – Euro Zone CPI (-1.6 % m/m, -0.6 % y/y)
  • 10:00 GMT – Euro Zone Core CPI
  • 14:45 GMT – US Services PMI (54.0)
  • 15:00 GMT – US CB Consumer Confidence (99.6)
  • 15:00 GMT – US Richmond Manufacturing Index

Wednesday, February 25th

  • 01:45 GMT – Chinese HSBC Manufacturing PMI (49.5)
  • 09:00 GMT – Italian Trade Balance
  • 15:00 GMT – US New Home Sales (470k)
  • 21:45 GMT – New Zealand Trade Balance

Thursday, February 26th

  • 07:00 GMT – German Consumer Climate (9.5)
  • 07:45 GMT – French Consumer Confidence (91.0)
  • 08:00 GMT – Spanish GDP (0.7 % q/q, 2.0 % y/y)
  • 08:55 GMT – German Unemployment Change (-10k)
  • 08:55 GMT – German Unemployment Rate (6.5 %)
  • 09:30 GMT – UK GDP (0.5 % q/q, 2.7 % y/y)
  • 13:30 GMT – US CPI (-0.6 % m/m, -0.1 % y/y)
  • 13:30 GMT – US Core CPI (0.1 % m/m, 1.6 % y/y)
  • 13:30 GMT – US Durable Goods Orders (1.9 % m/m)
  • 13:30 GMT – US Initial Jobless Claims
  • 13:30 GMT – Canadian CPI (1.0 % y/y)
  • 13:30 GMT – Canadian Core CPI (2.0 % y/y)
  • 14:00 GMT – US House Price Index
  • 23:30 GMT – Japan National CPI
  • 23:30 GMT – Japan National Core CPI (2.2 % y/y)
  • 23:30 GMT – Japan Unemployment Rate (3.4 %)
  • 23:50 GMT – Japan Industrial Production (2.7 % m/m)
  • 23:50 GMT – Japan Retail Sales (-1.3 % y/y)

Friday, February 27th

  • 08:30 GMT – Swedish GDP
  • 08:30 GMT – Swedish Retail Sales (0.4 % m/m, 3.8 % y/y)
  • 10:00 GMT – Italian CPI (0.1 % m/m, -0.5 % y/y)
  • 13:00 GMT – German CPI (0.7 % m/m, -0.2 % y/y)
  • 13:00 GMT – German HICP (0.7 % m/m, -0.4 % y/y)
  • 13:30 GMT – US GDP (2.1 % q/q)
  • 14:45 GMT – US Chicago PMI (58.0)
  • 15:00 GMT – US Pending Home Sales (1.8 % m/m)