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Markets await Yellen’s testimony

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Today’s Economic events

  • Australia Westpac consumer sentiment 4.20% vs. -3.50% previously
  • Japan producers price index -3.10% vs. -2.80%
  • Australia new home sales m/m 6.0% vs. -2.70% previously
  • France industrial production m/m -1.60% vs. 0.20%
  • Italy industrial production m/m -0.70% vs. 0.30%
  • UK manufacturing production m/m -0.20% vs. 0.0%
  • UK industrial production m/m -1.10% vs. -0.10%

Coming up

  • Fed Chair Yellen testifies
  • Crude Oil inventories
  • Business NZ manufacturing

The markets remained under pressure in Asian trading today with the Nikkei225 adding further declines of -2.31% for the day, while the Shanghai Composite lost a modest -0.61% for the day. As risk aversion continued, the Yen remained strong across the board. USDJPY is currently down -0.32% for the day, trading at 114.78 but the declines look to be moderate in comparison to the previous few days of strong declines.

The commodity risk currencies were seen to be trading modestly higher after declining for three straight days previously. AUDUSD is up 0.30%, trading at 0.709. Economic data from Australia included the new home sales numbers, which increased 6.0% for the month up from -2.70% declines seen a month ago. NZDUSD was also higher after recovering from the previous day’s declines. The Kiwi is up 0.20% against the Greenback, trading at 0.665.

The European trading session opened on a soft note after the EURUSD touched 1.13 highs yesterday. However, in today’s trading, the Euro was trading lower against the US Dollar currently down -0.27% for the day. Prices, however, remain mostly range bound within yesterday’s price action.

[Tweet “Oil prices remain weak awaiting the weekly Crude Oil inventories data, WTI Crude oil is down -0.78% “]

The GBPUSD managed to remain strong despite weak manufacturing and industrial production data. A stronger than expected decline of -1.10% in industrial output and a -0.20% decline on manufacturing production failed to suppress the British Pound. The currency initially dipped to session lows of 1.4497 but quickly recouped the losses to close back higher testing 1.46 highs. On the equity front, the German DAX was seen trading higher with 2.41% for the day while the London FTSE100 was up 1.09% for the day.

The NY trading session opened today with the markets turning attention to Janet Yellen’s testimony. Ms. Yellen noted that recent global economic turmoil warranted a gradual pace of hikes in interest rates and that higher interest rates with low oil prices would make market conditions tighter. The remarks were part of her prepared speech which was released ahead of the testimony due within the hour. The markets did not react much to Yellen’s speech, but US equity markets are pointing to a higher open. The Dow Jones Industrials is expected to open 0.63% higher while the S&P500 Index is looking to open 0.76% higher today.

On the commodity front, Oil prices remain weak awaiting the weekly Crude Oil inventories data. WTI Crude oil is down -0.78% for the day, trading $28 a barrel ahead of the inventory report. Gold prices, which tested the highs of $1200 yesterday is currently trading flat with an intraday dip formed near 1183.

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