Market Brief
Despite Fed Chair Yellens slightly dovish testimony FX markets were broadly unchanged. EUR/USD gained slightly to 1.1350 while GBP/USD rose to 1.5475. AUD/USD climbed to 0.7877 on the back of stronger China PMI manufacturing. NZD/USD firmed around 0.7530. Asia equity markets were broadly higher. The Nikkei rose 0.10%, Kospi up 0.8% while Shanghai was flat on return for the long holiday. US treasury yields were stable as the 10 yr lingered around 1.988%.
Fed Chair Yellens highly anticipated testimony indicated that policy decision would be data dependent and considered on a meeting by meeting basis. She did make is clear that no rate hike would be imminent, but the ground work was ready for tightening later this year. She told the Senate banking committee that the economic recovery was solid being led by the labor markets. In addition she hinted that wages should start to increase. In regards to inflation Yellen stressed it was too low for the feds liking however, weakness was due to softer oil prices and medium term inflation should rise to 2%. USD was only slightly weaker on the comments since there was really no new information above the recent FOMC meeting minutes.
The new Greek government submitted its proposal for economic reforms to extended it 172bn bailout for up to four month which was quickly approved by the Eurozone finance ministers. According to news reports two of the three member of the Trioka are already expressing doubt over the New Greek plan. A clear signal to Greek that its position in the EU is far from secure. In the statement by the Eurozone announcing the acceptance of the plan ministers suggested that it was a “valid starting point” for negotiations on the bailouts new terms. In addition they expected Athens to provide more details to the current plan in the weeks to come. EUR bas only slightly stronger on the news as the optimism around the extension has run out. The market is now pricing in a high probability that “Grexit” will become a reality. This plan only halts the inevitable
| Today's Calendar | Estimates | Previous | Country / GMT |
|---|---|---|---|
| US 4Q MBA Mortgage Foreclosures | - | 2.39% | USD / 23:00 |
| US 4Q Mortgage Delinquencies | - | 5.85% | USD / 23:00 |
| GE Jan Import Price Index MoM | - | -1.70% | EUR / 23:00 |
| GE Jan Import Price Index YoY | - | -3.70% | EUR / 23:00 |
| AU Jan Skilled Vacancies MoM | - | -1.00% | AUD / 00:00 |
| AU 4Q Wage Price Index QoQ | - | 0.60% | AUD / 00:30 |
| AU 4Q Wage Price Index YoY | - | 2.60% | AUD / 00:30 |
| AU 4Q Construction Work Done | - | -2.20% | AUD / 00:30 |
| NO 1Q Consumer Confidence | - | 15.4 | NOK / 05:30 |
| SZ Jan UBS Consumption Indicator | - | 1.42 | CHF / 07:00 |
| FR Feb Consumer Confidence | - | 90 | EUR / 07:45 |
| NO Dec Unemployment Rate AKU | - | 3.70% | NOK / 09:00 |
| UK Jan BBA Loans for House Purchase | - | 35667 | GBP / 09:30 |
| US 20.févr. MBA Mortgage Applications | - | - | USD / 12:00 |
| US Jan New Home Sales | - | 481K | USD / 15:00 |
| US Jan New Home Sales MoM | - | 11.60% | USD / 15:00 |
| FR Jan Total Jobseekers | - | 3496.4k | EUR / 17:00 |
| FR Jan Jobseekers Net Change | - | 8.1 | EUR / 17:00 |
| NZ Jan Trade Balance | - | -159M | NZD / 21:45 |
| NZ Jan Exports | - | 4.42B | NZD / 21:45 |
| NZ Jan Imports | - | 4.58B | NZD / 21:45 |
| NZ Jan Trade Balance 12 Mth YTD | - | -1150M | NZD / 21:45 |
| NZ Jan Net Migration SA | - | 4100 | NZD / 21:45 |
Currency Tech
EUR/USD
R 2: 1.1534
R 1: 1.1450
CURRENT: 1.1330
S 1: 1.1262
S 2: 1.1098
GBP/USD
R 2: 1.5826
R 1: 1.5620
CURRENT: 1.5393
S 1: 1.5317
S 2: 1.5197
USD/JPY
R 2: 121.85
R 1: 120.48
CURRENT: 118.64
S 1: 118.18
S 2: 116.66
USD/CHF
R 2: 0.9831
R 1: 0.9554
CURRENT: 0.9521
S 1: 0.9374
S 2: 0.9284