Market Brief
Much of Asia remains closed for the lunar New Year, and as such, thin liquidity has led to low participation in overnight trading. The BoJ announced their latest monetary policy decision in the latter part of the session, opting to keep interest rates at 0.00-0.10% and to downgrade their growth forecasts for the coming year. The revisions are a reflection of the central bank’s growing concern about European debt problems weighing on growth in the year ahead, and putting further downward pressure on Japanese exports. In spite of this news, USDJPY was largely unaffected; with the pair stuck in a tight 76.96-77.05 range all session.
The other notable event overnight has been the conclusion of the meeting between Eurozone finance ministers. Importantly, the group rejected the tentative proposal made between Greece and its private sector bond holders, sending both parties back to the drawing board. It is understood that the planned bond swap which would replace outstanding debt with new long-term bonds with a 4% coupon was viewed as too generous for bond holders and unsustainable for Greece. The news is certainly a setback, but ultimately did not come as much of a surprise given earlier reports in the Financial Times which cited insider knowledge. Going forward, headline risk should remain high as Greece’s discussions with the IIF resume; and clearly any indication that the two sides cannot reach an agreement would likely send the EURUSD tumbling back lower.
Today’s data calendar is dominated by European PMI surveys in the morning, with a plethora of central bankers due to speak in the afternoon – including the ECB’s Gonzalez-Paramo, SNB’s Danthine, and BoE Governor Mervyn King. Once these events are out of the way, attention will no doubt shift to tomorrow’s FOMC rate decision.
| Global Indexes | Current Level | % Change |
| Nikkei 225 Index | 8,785.33 | + 0.22 |
| FTSE 100 Index | 5,782.56 | + 0.94 |
| DAX Index | 6,436.62 | + 0.50 |
| SMI Index | 6,127.67 | + 0.08 |
| S&P future | 1,307.30 | - 0.29 |
| World Markets | Current Level | % Change |
| Gold | 1,675.87 | - 0.08 |
| Silver | 32.43 | + 0.29 |
| VIX | 18.67 | + 2.13 |
| Crude wti | 99.74 | + 0.16 |
| USD Index | 79.79 | - 0.01 |
| Todays Calender | Estimates | Previous | Country / GMT |
| Germany: Flash manufacturing PMI, index Jan | 49.0 | 48.4 | EUR/08:28 |
| Germany: Flash services PMI, index Jan | 52.5 | 52.4 | EUR/08:28 |
| Flash manufacturing PMI, index Jan | 47.3 | 46.9 | EUR/08:58 |
| Flash services PMI, index Jan | 49.0 | 48.8 | EUR/08:58 |
| Flash composite PMI, index Jan | 48.5 | 48.3 | EUR/08:58 |
| PSNB, £bn Dec | 12.1 | 15.2 | GBP/09:30 |
| Industrial orders, sa % m/m (y/y) Nov | -2.2(-2.7) | 1.8 (1.6) | EUR/10:00 |
| Retail sales, % m/m Nov | 0.2 | 1.0 | CAD/13:30 |
Currency Tech
EURUSD
R 2: 1.3120
R 1: 1.3075
CURRENT: 1.3020
S 1: 1.2875
S 2: 1.2840
GBPUSD
R 2: 1.5670
R 1: 1.5600
CURRENT: 1.5550
S 1: 1.5515
S 2: 1.5450
USDJPY
R 2: 77.75
R 1: 77.35
CURRENT: 77.00
S 1: 76.70
S 2: 76.55
AUDUSD
R 2: 1.0610
R 1: 1.0575
CURRENT: 1.0505
S 1: 1.0460
S 2: 1.0355
- S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot
