Credits: Brookings Institution / Flickr. Photo by Paul Morigi
Today’s Economic events
- Australia MI leading index m/m 0.0% vs. -0.30% previously
- Japan core machinery orders m/m 4.20% vs. 4.60%
- UK Average earnings index 3m/y 1.90% vs. 1.90%
- UK Unemployment rate 5.10% vs. 5.0%
- Switzerland ZEW Economic expectations -5.9 vs. -3.0 previously
- Canada foreign securities purchases -1.41bn vs. -6.05bn
- US building permits -0.20% vs. -0.30%
- US PPI m/m 0.10% vs. -0.20%; Core PPI m/m 0.40% vs. 0.10%
- US housing starts m/m -3.80% vs. 2.0%
Coming up
- The US Capacity utilization rate
- The US industrial production
- FOMC meeting minutes
- New Zealand PPI
The Asian trading session remained mixed today as the Nikkei225 closed lower -1.36% while the Shanghai Composite gained 1.10% for the day. The Yen was trading stronger during the Asian session as USDJPY tested intraday lows to 113.52¥ before reversing the losses and trading stronger in the European session. At the time of writing, USDJPY is up 0.19% for the day, trading near the daily highs at 114.3¥. Data from Japan today included the core machinery orders which increased 4.20%, below estimates of 4.60%.
The commodity currencies are trading flat today. AUDUSD is up 0.06% after prices dipped lower to yesterday’s lows near $0.7088. The NZDUSD was also weaker in today’s trading, down -0.05% for the day, trading near $0.657. Yesterday, New Zealand GDT came out weaker at -2.80%, following a decline of -7.40% previously.
In the European trading session, the markets have been stronger. The German DAX is up 1.99% for the day including the FTSE100 which is up 1.66%. Data from Europe today included the Swiss ZEW economic outlook which declined to -5.9, down from -3.0 reading a month before in January. As a leading indicator, the ZEW economic expectation points to business outlook forecasts which look bleak as of the data released today. USDCHF is trading higher for the day on a stronger Dollar. The currency pair is up 0.39% higher for the day, trading at 0.992CHF.
[Tweet “Ewald Nowotny: Market expectations from the ECB were “unrealistically high””]
The Euro remained weak today for the most part. EURUSD is down -0.24% lower, trading just above the $1.11 support. Prices remained weak since the start after failing to break above 1.117 – 1.116 resistance. Comments from ECB’s Nowotny today saw the ECB official stating that market expectations from the ECB were “unrealistically high” speaking in the context of December’s ECB meeting where the markets were heavily biased for the ECB to expand its QE purchases. So far, the ECB and its officials have taken the modest route without raking up too much of expectations as the Central Bank is to take a decision at the meeting in March.
The British Pound is down -0.15% today as the GBPUSD trades at $1.428. The Cable initially rallied intraday to test the highs of $1.451 on a mixed labor market data. Wages managed to grow at a pace of 1.90%, matching expectations, but the unemployment rate was steady at 5.10%, against market expectations of a decline to 5.0%, marking an 11-year low. The GBP gave back the gains quite quickly and is trading below yesterday’s low.
The NY trading session got underway with the release of the US housing data. Housing starts declined -3.80%, below expectations of a 2.0% increase while building permits declined -0.20% against expectations of -0.30% declines. Producer Price index was better than expected, rising 0.10% to the headline and 0.40% on the core, beating estimates. The US Dollar was seen trading stronger but is susceptible to the FOMC meeting minutes due later today from the January monetary policy meeting. US equity markets are looking to another day of gains, as the futures markets point to the Dow Jones opening 0.70% higher while the S&P500 futures are up 0.70%.
On the commodity front, WTI Crude Oil prices were seen trending higher today, currently up 2.10%, trading at $29.74 a barrel. Iran, Iraq and Venezuela are supposedly holding talks to join the output freeze. Iraq has so far refused to freeze production citing that it needs to make up for the lost market share.
Gold prices are up 0.61% higher today, trading at $1207 an ounce after dipping in early trading to test the lows of $1198 before pushing back higher.
The remainder of the evening will see data from the US and the FOMC meeting minutes followed by New Zealand PPI data.
