Analysis and Recommendation: The USD/CNY is flat as China remains on holiday. The Lunar holiday keeps China closed for an entire trading week leaving
The USD/CNY is flat as China remains on holiday. The Lunar holiday keeps China closed for an entire trading week leaving volumes in Asia low. A Bloomberg gauge of the dollar versus 10 major peers was near its lowest level since November after Ms Yellen’s comments initially buoyed American stocks, before they retreated into the close. While Australia’s benchmark snapped a four-day drop, futures on US indexes declined, with markets in Tokyo, Shanghai, Taiwan and Vietnam shut Thursday, as those in Hong Kong and South Korea return. Australian 10-year bonds advanced for a third session following an advance in Treasuries. US crude traded below US$28 a barrel.
“Janet Yellen had a delicate task last night – to sound concerned enough to reassure investors that the Fed was feeling their pain, while still sounding upbeat enough to bolster the notion that this volatility will all blow over,” Sharon Zolner, a senior economist in Auckland at ANZ Bank New Zealand, said in a client note. “The Fed has no idea how this is going to pan out either, so all Yellen could really do was ensure she wasn’t the catalyst for the lurch.”
Ms Yellen’s testimony before Congress did little to quell market volatility, with the central bank chief saying the Fed still expects to raise rates gradually while making it clear that continued turmoil may alter its forecasts. She highlighted uncertainty over the pace of China’s growth and the related rout in commodities, concerns that have roiled financial markets throughout the year and twice pushed global shares to the brink of a bear market.
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Today’s economic releases:
Cur. | Event | Actual | Forecast | Previous | |||
Japan – National Founding Day | |||||||
China – Lunar New Year | |||||||
NZD | Business NZ PMI (Jan) | 57.9 | 56.7 | ||||
GBP | RICS House Price Balance (Jan) | 49% | 52% | 49% | |||
EUR | Eurogroup Meetings | ||||||
USD | Initial Jobless Claims | 281K | 285K | ||||
CAD | New Housing Price Index (MoM) (Dec) | 0.2% | 0.2% | ||||
USD | Fed Chair Yellen Testifies |
Upcoming Economic Events that you should be monitoring:
Friday, February 12, 2016
Holiday China – Lunar New Year
Cur. | Event | Actual | Forecast | Previous | |||
AUD | RBA Governor Stevens Speaks | ||||||
AUD | Home Loans (MoM) (Dec) | 3.0% | 1.8% | ||||
EUR | German CPI (MoM) (Jan) | -0.8% | -0.8% | ||||
EUR | German GDP (QoQ) (Q4) | 0.3% | 0.3% | ||||
EUR | German GDP (YoY) (Q4) | 2.3% | 1.8% | ||||
EUR | EU Finance Ministers Meeting | ||||||
EUR | GDP (YoY) (Q4) | 1.5% | 1.6% | ||||
EUR | GDP (QoQ) (Q4) | 0.3% | 0.3% | ||||
EUR | Industrial Production (MoM) (Dec) | 0.3% | -0.7% | ||||
USD | Core Retail Sales (MoM) (Jan) | 0.1% | -0.1% | ||||
USD | Export Price Index (MoM) (Jan) | -0.9% | -1.1% | ||||
USD | Import Price Index (MoM) (Jan) | -1.4% | -1.2% | ||||
USD | Retail Sales (MoM) (Jan) | 0.1% | -0.1% | ||||
USD | FOMC Member Kaplan Speaks | ||||||
USD | Business Inventories (MoM) (Dec) | 0.1% | -0.2% | ||||
USD | FOMC Member Dudley Speaks | ||||||
USD | Michigan Consumer Expectations | 82.0 | 82.7 |
Government Bond Auctions
Date Time and Country
Feb 11 N/A Italy Euro 4-5bn 30-yr syndicated bond auction
Feb 11 11:03 Sweden Holds I/L bond auction
Feb 11 11:10 Italy Announces details of bond auction
Feb 11 11:30 UK 3.5% 2045 Gilt auction
Feb 11 19:00 US Holds 30-year bond auction
Feb 11 n/a US Details of 30-yr TIPS auction on Feb 18
Feb 12 11:10 France Details of bond auction on 18 Feb