Tuesday 24th February: European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei up 0.60 %, Hang Seng dropped 0.45 %, ASX gained 0.30 %, Shanghai Composite closed
  • Commodities: Gold at $1201 (+0.05 %), Silver at $16.35 (+0.30 %), WTI Oil at $49.25 (-0.40 %), Brent Oil at $58.90 (+0.05 %)
  • Rates: US 10 year yield at 2.073, UK 10 year yield at 1.802, German 10 year yield at 0.357

News & Data:

  • Japan Services Price Index 3.4 %, Expected: 3.6 %, Previous: 3.5 %
  • New Zealand Inflation Expectations: 1.8 %, Previous: 2.1 %
  • Japan Government-Bank of Japan Relationship Beginning To Show Strain – Nikkei
  • RBNZ Should Remain On Hold Through 2015 – NZIER
  • BHP Billiton Half-Year Profit Falls, Beats Forecasts – Reuters

Markets Update:

US stock indices closed the day almost unchanged, despite some weak econ data out of the US. The major Asian indices are mostly higher this morning, while Oil prices continue to decline. Precious metals recovered after the sharp drop in yesterday’s European session, but remain under pressure overall as the USD is bid across the board.

In FX, the New Zealand Dollar was the worst performing currency amongst the majors. It declined after inflation expectations dropped to 1.8 % from a previous 2.1 %. NZD/USD broke below the 0.7490 support level and extended losses towards 0.7460 as the trailing stops got cleared. Immediate support is seen at 0.7435/40, but the next significant support level lies at 0.7330.

The Aussie Dollar was dragged lower by the Kiwi decline and AUD/USD reached a low of 0.7760 earlier. The pair could find some minor support at last Thursday’s low of 0.7755, but the next significant level lies at 0.7725. USD/CAD had a brief dip below 1.2550 yesterday on speculations that OPEC may hold an emergency meeting amid the declining Oil prices. However, those are just rumors and the pair made it back to 1.26 shortly after that. With the pair still very well bid, further gains seem likely, with no significant resistance eyed until 1.27.

EUR/USD is still consolidating as traders are waiting for further news about Greece and the Fed Chair Yellen testimony today at 1500 GMT. 1.1260/70 and 1.1440/50 are the key levels on each side of the range and fading the extremes remains the appropriate strategy for now. Similar price action in GBP/USD, which failed yesterday to break above last week’s high of 1.5480. Short-term techs are still bullish though and the pair should find good intraday support at 1.54.

Upcoming Events:

  • 07:00 GMT – German GDP (0.7 % q/q, 1.6 % y/y)
  • 10:00 GMT – Euro Zone CPI (-1.6 % m/m, -0.6 % y/y)
  • 10:00 GMT – Euro Zone Core CPI (-0.6 % m/m)
  • 14:45 GMT – US Services PMI (54.0)
  • 15:00 GMT – Fed Chair Yellen Testimony
  • 15:00 GMT – US CB Consumer Confidence (99.6)
  • 15:00 GMT – US Richmond Manufacturing Index (7.0)

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