Crude oil continues to lead risk markets today. WTI edges higher to 33.42 and takes global equities up. At the time of writing, FTSE is trading up 1.2%, DAX up 2.1%, CAC up 1.8%. Gold, on the other hand, continues to stay in sideway trading and looks set to have another pull back. In the currency markets, commodity currencies are generally higher for the week on rebound in stocks. European majors, in particular Sterling, stay the weakest ones. It should be noted that both DJIA and S&P 500 took out 55 days EMA again yesterday. Further rise in US stocks today would confirm near term reversal in sentiments.
In China, PBOC's Zhou Xiaochuan suggested the government has room for further easing. He also suggested there are "multiple policy instruments to address possible downside risks". Besides economic growth slowdown, massive capital outflow is a serious problem facing China. When asked about how much foreign exchange reserve the central bank is willing to spend to curb outflow, Zhou merely noted that reserve cannot go up indefinitely. Indeed, the government has adopted measures to deal with the problem with the latest being abolition of bond investment quotas on qualified foreign institutional investors.
On the data front, New Zealand trade balance turned into surplus of NZD 8m in January. Japan CPI core dropped to 0.0% yoy in January. UK Gfk consumer sentiment dropped to 0 in February. Eurozone confidence indicates, German CPI will be released in European session. US will release Q4 GDP revision, trade balance, personal income and spending.