FX News
European Outlook: Asian stock markets headed south. The Trumpflation already started to stall in the U.S. yesterday and uncertainty about U.S. policies going ahead have seen U.S. markets heading south, which also pulled down European markets and now Asia, where the Japan saw the biggest slump in stocks since the U.S. presidential election. The Nikkei closed with a 2.13% loss and the break of key technical levels has raised fears of further swings ahead. The ASX was down 1.56% at the close, the Hang Seng is currently down -1.4%. U.S. and U.K. stock futures are also firmly in negative territory, so there is no end to the sell off in sight so far. Against that background, Bunds, which already started to climb higher in after hour trade yesterday, are likely to gain further. The European calendar today is pretty empty, with only Eurozone current account and BoP numbers, and is unlikely to have much of an impact.
Fedspeak: KC Fed hawk George said the Fed is moving into a “critical time”. She’s worried the very low interest rates can lead to imbalances. She somewhat squashed worries over the balance sheet normalization sooner rather than later, noting that reducing it probably won’t happen quickly. Shrinking the Fed’s portfolio is going to entail a lot of discussion and analysis. Yields are at the lows yesterday after she didn’t take an overly hawkish stance, nor try to dissuade the Treasury market from its more bullish leaning after the FOMC didn’t meet fears of a more aggressive rate hike posture with last Wednesday’s results. Fed dovish dissenter Kashkari was Tweeting freely in an #AskNeel session on Twitter. He said: “Need to factor in lower neutral real rates. Economy not growing nearly as fast as anyone would like. But higher rates won’t help” in response to a question about Yellen saying the economy is doing well. At the Bank of England NY Fed’s Dudley spoke on bank ethics. He said that there still was a “long way to go” on reforming bank culture in wake of the financial crisis and again called for revamped bank performance incentives after the Wells Fargo scandal. He didn’t discuss monetary policy.
Canada: Canada retail sales surged 2.2% in January after the revised 0.4% drop in December (was -0.5%). The ex-autos sales aggregate grew 1.7% in January following a revised 0.5% decline (was -0.3%). Growth in the total and ex-autos sales aggregate exceeded expectations. Higher prices played a large role in boosting total and ex-autos sales values, as expected. Retail sales volumes grew a less pronounced, but still robust, 1.3% in January after the 1.0% decline in December. Yields extended gains on the robust retail sales report, which continued the recent run of firm data from Canada. Additionally, yesterday Deputy Governor Schembri spoke to the Greater Vancouver Board of Trade, with remarks published on the BoC’s website. He stated that: “it is still too early to assume the worst is behind us” in terms of economic growth. He acknowledged that Q4 GDP overshot the Bank ‘s projections, but said “…a more detailed analysis suggests scope for cautious.” Overall, Schembri’s prepared remarks have keep the Bank’s dovish tone well intact, despite recent upbeat data.
Main Macro Events Today
- US Crude Oil Inventories – Expected to rise to 1.9M from -0.2M last week.
- NZD Rate Statement – The Reserve Bank of New Zealand meeting is late today. RBNZ expected to hold the OCR steady at 1.75%. The RBNZ held steady in February, after the expected easings in November and August.
- US Existing Home Sales – February existing home sales should reveal to 5.580 mln after a 3.3% increase to 5.690 mln in January which marked a new recent high.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our latest webinar and get analysis and trading ideas combined with better understanding on how markets work.
Click HERE to register the next webinar will start in:[ujicountdown id=”Next Webinar” expire=”2017/03/22 11:00″ hide=”true” url=”” subscr=”” recurring=”” rectype=”second” repeats=””]
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
