European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei down 0.80 %, Hang Seng lost 0.55 %, ASX 200 fell 0.30 %
  • Commodities: Gold at $1216 (+0.70 %), Silver at $17.61 (+0.90 %), WTI Oil at $53.55 (-0.60 %), Brent Oil at $56.50 (-0.50 %)
  • Rates: US 10-year yield at 2.46, UK 10-year yield at 1.46, German 10-year yield at 0.47

News & Data:

  • Australia Trade Balance (AUD) Dec: 3511M (est. 2000M, prev. 1243M), Imports: +1%, Exports: +5%
  • Australia Building Approvals (MoM) Dec: -1.2% (est. -1.50%, prev. 7.00%)
  • Australia Building Approvals (YoY) Dec: -11.4% (est. -10.80%, prev. -4.80%)
  • Japan PM Abe: We have not conducted FX intervention under my administration
  • FX restrictions should not be part of negotiations
  • South Korea CPI (YoY) Jan: 2.0% (est. 1.50%, prev. 1.30%)
  • South Korea CPI (MoM) Jan: 0.9% (est. 0.35%, prev. 0.10%)
  • Fed leaves interest rates unchanged, remains upbeat on economy – RTRD
  • U.S. factory, private payrolls data point to firming economy – RTRS
  • Asian shares at four-month high, dollar soft after nonchalant Fed – RTRS

Markets Update:

The US Dollar rose initially following a much stronger than expected ADP Nonfarm Employment Change print. However, momentum waned after the Federal Reserve meeting and the Dollar eventually declined against all other major currencies in Asia. The Fed decided to keep rates unchanged, as expected, and maintained its hawkish bias. However, this was not enough to keep the Dollar rally alive, as traders had already anticipated such an outcome.

The Australian Dollar was the best performing currency overnight, after the trade balance showed a surge in exports. AUD/USD rose to almost 0.7650, while AUD/JPY rallied to 0.8650.

The focus today will be on the Bank of England rate decision. There certainly is potential for it moving the markets, as we not only get the announcement from the BoE, but also a press conference by Governor Carney and the updated economic forecasts from the central bank.

Upcoming Events:

  • 08:15 GMT – Swiss Retail Sales
  • 09:30 GMT – UK Construction PMI
  • 12:00 GMT – Bank of England Rate Decision
  • 12:30 GMT – Bank of England Governor Carney speaks
  • 13:30 GMT – US Initial Jobless Claims
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