Global Markets:

  • Asian stock markets: Nikkei down 0.30 %, Shanghai Composite fell 0.40 %, Hang Seng lost 0.45 %, ASX 200 declined 0.25 %
  • Commodities: Gold at $1237 (+0.35 %), Silver at $17.98 (+0.20 %), WTI Oil at $54.10 (+0.95 %), Brent Oil at $56.35 (+0.90 %)
  • Rates: US 10-year yield at 2.41, UK 10-year yield at 1.20, German 10-year yield at 0.28

News & Data:

  • Bank of Korea Leaves Base Rate Unchanged at 1.25%
  • Japan Services PPI (YoY) Jan: 0.5% (est 0.5% rev prev 0.5%)
  • Australian Private Capex (QoQ) Q4: -2.1% (est -1.0% rev prev -3.3%)
  • Australian Building Capex (QoQ) Q4: -4.1% (rev prev -3.6%)
  • Australian Plant/Machinery Capex (QoQ) Q4: 0.4% (rev prev -3.0%)
  • PBoC Fixes USDCNY Reference Rate At 6.8695 (prev fix 6.8830 prev close 6.8781)
  • Asia stocks ease, dollar steadies after Fed-led losses

Markets Update:

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The Dollar declined overnight, after the FOMC minutes showed that the US central bank remains cautious. The Fed said that it may be appropriate to raise rates again fairly soon should jobs and inflation data be in line with expectations. However, the minutes did not clearly signal that a rate hike will follow next month, and did not reveal much information that wasn’t already known.

EUR/USD rose from 1.0495 to 1.0570 post-FOMC. However, the on-going concerns about the upcoming elections will likely prevent larger gains. The rally in the British Pound after the FOMC minutes release was weaker. GBP/USD rose from 1.2410 to only 1.2460 and retraced most of the gains in the Asian session. The weak UK GDP numbers are still weighing on the currency.

USD/JPY declined from 113.60 to 113.00, but support held and the pair bounced to 113.45 in Asia. Nevertheless, the outlook remains negative and a retest of 112.55 support likely.

Upcoming Events:

  • 07:00 GMT – German GDP
  • 07:00 GMT – German GfK Consumer Climate
  • 13:30 GMT – US Initial Jobless Claims
  • 14:00 GMT – US House Price Index

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