German Buba President Weidmann spoke about the Bundesbank’s Annual Report, in Frankfurt, with the following comments made: policy normalisation will take a long time and if the economic upswing continues and prices rise, there is no reason to not end QE this year. He said it is important to “gradually and dependably” reduce ECB stimulus. Rapid Eurozone growth confirms that inflation will move towards the target. There is evidence that FX movements are having a smaller impact on inflation than in the past. Germany’s and the Eurozone’s growth was “very satisfactory”. He also said that bigger QE reduction or a clearer end date would be justifiable. Finally, he said that an ECB rate hike in 2019 is ‘not completely unrealistic’.
Eurozone Industrial Confidence (Feb) was as expected at 8.0, from a prior number of 8.8, which was revised up to 9.0. Economic Sentiment Indicator (Feb) was 114.1 v an expected 114.0, from 114.7 previously, which was revised up to 114.9. Business Climate (Feb) was as expected at 1.48, from 1.54 previously, which was revised up to 1.56. Consumer Confidence (Feb) was as expected at 0.1, from 0.1 prior, which was revised up to 1.4. Services Sentiment (Feb) was 17.5 v an expected 16.3, from 16.7 prior, which was revised up to 16.8. EURUSD traded between 1.23374 and 1.23245 after the release of this data.
German Harmonised Index of Consumer Prices (YoY) (Feb) was 1.2% v an expected 1.3%, from 1.4% previously.
The US Fed’s Powell testified on the Semi-annual Monetary Policy Report before the House Financial Services Committee, in Washington DC, in his new capacity as Chairman. Some of his comments were: He sees further gradual rate hikes and the outlook remains strong. Some headwinds facing the US economy are now tailwinds. Financial conditions are accommodative despite volatility and the Fed must strike a balance to avoid overheating and to lift inflation. The FOMC sees risks roughly balanced and is monitoring inflation. Wages should increase at a faster pace and the US economic outlook is strong, with inflation to rise to 2%. The recent wage increases likely have been dampened by weak productivity growth. Last year’s business investments should begin to lift productivity. A robust jobs market is expected to support income and spending.
US Durable Goods Orders Ex-Transportation was -0.3% v an expected 0.4%, from -0.7% previously, which was revised up from 0.6%. Durable Goods Orders (Dec) was -3.7% v an expected -2.2%, from 2.6% previously, which was revised down from 2.9%. USDCAD traded between 1.27320 and 1.27072 after the release of this data.
US S&P/Case-Shiller Home Price Indices (YoY) (Dec) was as expected at 6.3, from 6.4% previously. House Price Index (MoM) (Dec) was 0.3% v an expected 0.4%, from 0.4% previously, which was revised up to 0.5%.
Japanese Large Retailer’s Sales (Jan) was 0.5% v an expected 0.4%, from 1.1% prior. Retail Trade s.a. (MoM) (Jan) was -1.8% v an expected -0.6%, from 0.9% prior. Retail Trade (YoY) (Jan) was 1.6% v an expected 2.1%, from 3.6% previously. Upon the release of this data, USDJPY moved to a high of 107.521 from 107.418 but then retraced the move within 30 minutes.
UK Gfk Consumer Confidence (Feb) was released earlier this morning, coming out at -10, in line with the consensus, and down from the prior reading of -9.
Chinese Non-manufacturing PMI (Feb) was released at 54.4 against a consensus of 55.0, from 55.3 previously.
EURUSD is up 0.04% overnight, trading around 1.23369.
USDJPY is down -0.27% in early session trading at around 107.035.
GBPUSD is up 0.07% this morning, trading around 1.39139.
Gold is unchanged in early morning trading at around $1,318.82.
WTI is down -0.22% this morning, trading around $62.68.
Major data releases for today:
At 08:00 GMT, Swiss KOF Leading Indicator (Feb) is expected to be 106.1 against 106.9 previously.
At 09:00 GMT, German Unemployment Change (Feb) is expected to be -15K from -25K previously. Unemployment Rate s.a. (Feb) is expected to be unchanged at 5.4%. EUR crosses could be affected by this data.
At 09:00 GMT, Swiss ZEW Survey – Expectations (Feb) data will be released with a previous value of 34.5.
At 10:00 GMT, Eurozone Consumer Price Index – Core (YoY) (Feb) is expected to be 1.1% from 1.0% prior. Consumer Price Index (YoY) (Feb) is expected to be 1.2% against 1.3% previously. EUR pairs may be moved by this release.
At 13:30 GMT, US Gross Domestic Product Annualized (Q4) is expected to be 2.5% from 2.6% previously. Gross Domestic Product Price Index (Q4) is expected to be unchanged at 2.4%. Personal Consumption Expenditures Prices (QoQ) (Q4) is expected to come in at 2.8% from 1.5% previously. Core Personal Consumption Expenditures Prices (QoQ) (Q4) is expected to be 1.9% from 1.3% previously. USD crosses may be heavily traded as a result of this data.
At 14:45 GMT, US Chicago Purchasing Managers’ Index (Feb) is expected to be 64.2 against a prior read of 65.7.
At 15:00 GMT, Pending Home Sales (YoY) (Jan) is expected to be -0.2% against a prior reading of -1.8%. Pending Home Sales (MoM) (Dec) is expected to be 0.3% against a prior reading of 0.5%.
At 15:00 GMT, US Fed’s Powell is due to testify on the Semi-annual Monetary Policy Report before the House Financial Services Committee, in Washington DC, in his new capacity as Chairman.
At 13:30 GMT, US Durable Goods Orders Ex-Transportation is expected to come in at 0.4% from -0.7% previously, which was revised up from 0.6%. Durable Goods Orders (Dec) is expected at -2.2% v 2.8% previously, which was revised down from 2.9%. USD crosses may be heavily traded as a result of this data.
At 22:30 GMT, Australian AIG Manufacturing Index is expected to be released with a previous value of 58.7. AUD crosses may be heavily traded as a result of this data.
At 23:50 GMT, Foreign Investment in Japanese Stocks (Feb 23) is expected to be in the region of the previous number of ¥-127.1B. Foreign Bond Investment (Feb 23) was ¥-553.1B previously. The report is released by the Ministry of Finance, detailing the flows from the public sector excluding the Bank of Japan. The net data shows the difference of capital inflow and outflow. A positive difference indicates net sales of foreign securities by residents (capital inflow), and a negative difference indicates net purchases of foreign securities by residents (capital outflow).
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
AUD/USD dips below 0.6600 following RBA’s decision
The Australian Dollar registered losses of around 0.42% against the US Dollar on Tuesday, following the RBA's monetary policy decision to keep rates unchanged. However, it was perceived as a dovish decision. As Wednesday's Asian session began, the AUD/USD trades near 0.6591.
EUR/USD lacks momentum, churns near 1.0750
EUR/USD cycled familiar levels again on Tuesday, testing the waters near 1.0750 as broader markets look for signals to push in either direction. Risk appetite was crimped on Tuesday after Fedspeak from key US Federal Reserve officials threw caution on hopes for approaching rate cuts from the Fed.
Gold wanes as US Dollar soars, unfazed by lower US yields
Gold price slipped during the North American session, dropping around 0.4% amid a strong US Dollar and falling US Treasury bond yields. A scarce economic docket in the United States would keep investors focused on Federal Reserve officials during the week after last Friday’s US employment report.
Democrats to introduce bill targeting crypto mixing services
Rep. Sean Casten revealed in a House hearing on Tuesday that Democrats are planning to issue a bill this week that would target crypto-mixing protocols. Democrats and Republicans also clashed over the SEC's recent action against crypto companies.
Living vicariously through rate cut expectations
U.S. stock indexes made gains on Tuesday as concerns about an overheating U.S. economy ease, particularly with incoming economic reports showing data surprises at their most negative levels since February of last year.