Friday 12th February: European Open Briefing

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Friday 12th February: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei down 3.40 %, Hang Seng fell 0.50 %, ASX 200 declined 1.15 %, Shanghai Composite closed for holiday
  • Commodities: Gold at $1233 (-1.16 %), Silver at $15.68 (-0.75 %), WTI Oil at $27.65 (+5.50 %), Brent Oil at $31.70 (+5.50 %)
  • Rates: US 10 year yield at 1.70, UK 10 year yield at 1.31, German 10 year yield at 0.20

News & Data:

  • Australia Home Loans (MoM) Dec: 2.6% (exp 3.0% prev 1.8%)
  • Australia Investment Lending (MoM) Dec: 0.6% (prev 0.7%)
  • New Zealand Food Prices (MoM) Jan: 2.0% (prev -0.8%)
  • Yen Movements Trigger BoJ Intervention Talk — RTRS
  • Japanese FinMin Aso: Gov’t Won't Be Swayed By Market Movements, Swift FX Swings Not Desirable — BBG
  • Aso: Will Make Necessary Response If Needed To Market Movements, Watching FX Closely, No Comment On Rumoured Intervention
  • Bank of Japan Governor Kuroda: Wont Hesitate To Take Policy Action To Meet Inflation Goal — RTRS
  • Kuroda: Japan Fundamentals Are Improving, Still Half Way To 2% Inflation Target — BBG
  • Kuroda: Negative Rate Impact Will Spread To Real Economy & Prices, Will Narrow Financial Margins
  • Abe Advisor: BoJ May Call Meeting On Further Easing — WSJ
  • RBA Governor Stevens: Still Further CPI Impact Of A$ Depreciation To Come
  • Stevens: A$ Rate Matters To Policy But We Don't Target It
  • Stevens: Unlikely We'll Be Raising Rates Any Time Soon
  • Stevens: Fall In AUD Has Helped Many Sectors So Far, Not To Say It Won't Fall Further — RTRS
  • Stevens: Labour Market Much Better Than Expected One Year Ago
  • Stevens: Inflation Unlikely To Cause A Problem In Next Year Or 2

Markets Update:

The Yen weakened overnight after several Japanese officials expressed their concerns about the recent volatility in the exchange rate and said that they are closely monitoring the moves in the FX market. USD/JPY rallied from 112.00 to a high of 113.00, where it ran out of momentum and fell back to 112.70. Volatility is likely to remain high and price action choppy. The short-term tech outlook is clearly bearish, but BoJ intervention could always lead to a quick spike like seen yesterday ahead of the NY open.

Meanwhile, the Euro weakened slightly, along with the British Pound. The commodity currencies also fell against the US Dollar, with AUD/USD declining from 0.7125 at the Sydney open to a low of 0.7095. NZD/USD started the day around 0.6730 but came under pressure ahead of the Tokyo open and reached a low of 0.6660.

Upcoming Events:

  • 07:00 GMT – German CPI
  • 07:00 GMT – German GDP
  • 08:00 GMT – Spanish CPI
  • 09:00 GMT – Italian GDP
  • 10:00 GMT – Euro Zone GDP
  • 10:00 GMT – Euro Zone Industrial Production
  • 13:30 GMT – US Retail Sales
  • 15:00 GMT – US Michigan Consumer Confidence

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