18 Feb: Stocks, Commodities higher as “risk-on” theme returned, Friday. Trade talks, FOMC Minutes the focus this week.

By | February 18, 2019

Risk sentiment took a positive turn on Friday after it was suggested that there seemed to be some consensus between the US and China over the trade talks. Nothing definite was concluded and negotiations will continue this week, but both sides said that progress has been made toward resolving the trade dispute. The risk-on mood was done no harm after Donald Trump said that the talks were “very complicated” but that he might extend the March 1st  deadline and keep tariffs on Chinese goods from rising for the time being.

Stocks led the way and headed higher (DJI+1.48%, S+P 0.9%, Nasdaq +0.5%), while WTI was up by 2.5% and the metals were also strong (Gold+0.7%, Silver +1.5%).

In the currency markets, the commodity bloc performed well, with both the Aud and Kiwi making good gains, while Yen and Swiss Franc are back under some pressure as safe haven demands diminish for the time being.  The Euro remained under pressure on Friday, not helped by a statement from the IFO institute, who warned that if US imposes 25% additional, permanent tariffs on European cars, it could then reduce German car experts to the US by 50% in the long run.

The coming week will see a thin calendar, beginning today with a US holiday and no data at all to move markets, leaving it to political/trade headlines to be the main focus. Traders will pay close attention to the RBA Minutes on Tuesday, with the German/EU ZEW Economic Sentiment Survey the only other major headline on the calendar. Wednesday will begin with the NZ Q4 PPI, following which there is not too much ahead of the FOMC Minutes, which will be the major event of the week. Thursday will be busier, with the release of the global flash PMIs. Other major events will include the Australian Unemployment, the German CPI and the US Durable Goods Orders. Friday will end the week with the Japan CPI, German GDP, IFO Business Climate/Expectations and the EU CPI. That’s about it. Have a good week.

Economic data highlights will include:

Mon: US holiday (Presidents Day),

Tue: RBA Minutes, EU Current Account, Construction Output, German/EU ZEW Economic Sentiment Survey, UK Unemployment, NAHB Housing Market Index, Global Dairy Trade Index

Wed: NZ Q4 PPI, Japan Merchandise Trade Balance, Australian WBC Leading Economic Index, Wage Price Index, German PPI, EU Preliminary Consumer Confidence, US FOMC Minutes

Thur: Nikkei Flash Mfg PMI, Australian Unemployment, Japan All Industry Activity Index, German CPI/HICP, German EU Flash PMIs, UK Public Sector Net Borrowing Requirements, US Philadelphia Fed Mfg Survey, Durable Goods Orders, Flash PMIs, Existing Home Sales, Jobless Claims

Fri: Japan CPI, China House Price Index, German GDP, German IFO Business Climate/Expectations, EU CPI, CBI Distributive Trade Survey – Realised

CURRENCIES
EURUSD: 1.1298
Res  1.1310  1.1340  1.1370
Sup  1.1280  1.1230  1.1255
USDJPY: 110.42
Res  110.65  110.85  111.15
Sup  110.25  110.00  109.65
GBPUSD: 1.2889
Res  1.2900  1.2930  1.2960
Sup  1.2870  1.2840  1.2810
USDCHF: 1.0050
Res  1.0070  1.0100  1.0130
Sup  1.0025  1.0000  0.9975
AUDUSD: 0.7138
Res  0.7150  0.7165  0.7180
Sup  0.7125  0.7110  0.7095
NZDUSD: 0.6861
Res  0.6875  0.6890  0.6905
Sup  0.6845  0.6830  0.6815
INDICES / COMMODITIES
S&P.fs: 2772.28
Res  2775.00  2790.00  2805.00
Sup  2760.00  2745.00  2725.00
DJ30.fs: 25845.50
Res  25900.00  26085.00  26260.00
Sup  25695.00  25475.00  25260.00
SPI200.fs: 6062
Res  6075  6100  6125
Sup  6035  6005  5985
XAUUSD: 1321.29
Res  1325.00  1330.00  1335.00
Sup  1315.00  1310.00  1305.00
XAGUSD: 15.79
Res  15.85  15.95  16.05
Sup  15.70  15.60  15.50
WTI.fs: 56.13
Res  56.50  57.30  58.15
Sup  55.00  53.75  52.75