Friday 30th January: European Open Briefing

Global Markets:

• Asian stock markets: Nikkei up 0.40 %, Shanghai Composite declined 0.50 %, Hang Seng lost 0.05 %, ASX rose 0.35 %
• Commodities: Gold at $1261 (+0.50 %), Silver at $16.93 (+0.90 %), WTI Oil at $44.68 (+0.35 %), Brent Oil at $49.08 (+0.05 %)
• Rates: US 10 year yield at 1.743, UK 10 year yield at 1.419, German 10 year yield at 0.36

News & Data:

• Japan National CPI 2.4 % y/y, Expected: 2.3 %, Previous: 2.4 %
• Japan National Core CPI 2.5 % y/y, Expected: 2.6 %, Previous: 2.7 %
• Japan Household Spending 0.4 % m/m, Expected: 0.3 %, Previous: 0.4 %
• Japan Unemployment Rate 3.4 %, Expected: 3.5 %, Previous: 3.5 %
• Japan Industrial Production 1.0 % m/m, Expected: 1.3 %, Previous: -0.5 %
• Japan Housing Starts -14.7 % y/y, Expected: -14.8 %, Previous: -14.3
• UK GfK Consumer Confidence 1.0, Expected: -2.0, Previous: -4.0
• Australia PPI 1.1 % y/y, Previous: 1.2 %
• Australia PPI 0.1 % q/q, Expected: 0.3 %, Previous: 0.2 %
• Japan FinanceMin Aso: Low oil prices, weak JPY not bad for economy
• China Vice Finance Minister Zhu: China to keep strong sustainable growth 2016-2020

Markets Update:

Asian stock markets are mixed with the Nikkei and ASX up on the day, but Shanghai Comp & Hang Seng lower. Better than expected US econ data yesterday has boosted US equities, as well as the US Dollar. Commodities remain weak and the strong Dollar has dragged the precious metals lower as well. Oil prices are consolidating after reaching a fresh low in yesterday’s London session.

In FX, the pressure on the Aussie Dollar is increasing as traders are increasing bets on a RBA rate cut next month. Views amongst analysts are split, some see a February rate cut as possible, but the majority believes we will not see one earlier than Q2 this year. AUD/USD fell to a fresh multi-year low of 0.7720 in the late NY session, but bounced in Asia and almost reached 0.78. USD/JPY was sold by Japanese names (mostly exporters), but found support at 117.80. The consolidation between 117.25 and 118.85 is likely to continue until the next major US data release, perhaps even until the NFP release next Friday.

Upcoming Events:

• 07:00 GMT – German Retail Sales (0.3 % m/m, 3.5 % y/y)
• 07:45 GMT – French Consumer Spending (0.2 % m/m)
• 07:45 GMT – French PPI
• 08:00 GMT – Spanish CPI
• 08:00 GMT – Spanish GDP (0.6 % q/q, 1.9 % y/y)
• 10:00 GMT – Euro Zone CPI (-0.5 % y/y)
• 10:00 GMT – Euro Zone Core CPI (0.6 % y/y)
• 10:00 GMT – Euro Zone Unemployment Rate (11.5 %)
• 13:30 GMT – US GDP (3.0 % q/q)
• 13:30 GMT – Canadian GDP (2.1 % y/y)
• 15:00 GMT – US University of Michigan COnsumer Confidence (98.2)

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