22 Feb. US$ generally steady; Aud$, NZ$, metals all lower. Yields firm. IFO, Draghi + 4 Fed speakers in focus Friday.

By | February 22, 2019

 

Thursday was very active, with the Aud$ the centre of attraction, and after heading higher following the strong jobs data it has since fallen heavily when Westpac forecast two RBA cuts this year. It then suffered a further selloff on the news that China’s Dalian port has banned imports of Australian coal. The Aud$ closed on its lows and looks very heavy heading into Friday trade. Elsewhere the currency markets were more stable, although the Aud$ dragged the Kiwi along with it, while Cable was firm on hope there will be an updated Brexit deal to vote on next week.  The Euro was choppy following a mixed reading from the EU PMIs. For its part, the US$ was mixed following the release of the US data, which was generally on the soft side.

The headline durable goods orders rose 1.2% in December, below expectation of 1.8%, while the ex-transport orders rose 0.1%, also below expectation of 0.3%. The Philadelphia Fed Business Outlook dropped to -4.1 in February, down from 17 and missed expectation of 14.8, the lowest level since 2016. The Initial jobless claims dropped -23k to 216k.

In other markets, the metals took a hit, with Gold trading -0.85% and Silver -2.3%, while oil is trading down by -0.45%. Stocks are also lower, by around 0.5%.

Friday will begin with the RBA Governor giving his semi-annual testimony to the parliamentary Committee, which could increase the action in the already volatile Aud$. Asia will also see the January China House Price Index and the Japan National CPI.  Later in the day we get the German Q4 GDP (exp 0.0%qq, 0.6%yy), the German IFO Business Climate (exp 99.0)/Expectations (exp 94.2) and the EU CPI (CPI, exp 0.5%mm, 1.4%yy; Core, exp 1.4%yy). Finally, Mario Draghi will be speaking and will be followed by plenty of Fed speakers, who will undoubtedly confuse the issue: Bullard, Quarles, Clarida, Williams. Have a good weekend.

Economic data highlights will include:

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

CURRENCIES
EURUSD: 1.1333
Res  1.1350  1.1370  1.1390
Sup  1.1310  1.1275  1.1295
USDJPY: 110.73
Res  110.95  111.15  111.40
Sup  110.50  110.25  110.00
GBPUSD: 1.3034
Res  1.3065  1.3110  1.3160
Sup  1.3010  1.2980  1.2940
USDCHF: 1.0015
Res  1.0030  1.0050  1.0070
Sup  1.0000  0.9980  0.9960
AUDUSD: 0.7080
Res  0.7100  0.7120  0.7140
Sup  0.7070  0.7050  0.7025
NZDUSD: 0.6804
Res  0.6825  0.6845  0.6870
Sup  0.6790  0.6770  0.6750
INDICES / COMMODITIES
S&P.fs: 2770.78
Res  2785.00  2800.00  2815.00
Sup  2765.00  2755.00  2740.00
DJ30.fs: 25817.00
Res  25980.00  26085.00  26260.00
Sup  25770.00  25630.00  25385.00
SPI200.fs: 6096
Res  6110  6135  6155
Sup  6075  6055  6030
XAUUSD: 1326.66
Res  1330.00  1335.00  1340.00
Sup  1320.00  1315.00  1310.00
XAGUSD: 15.84
Res  15.90  16.00  16.10
Sup  15.75  15.65  15.55
WTI.fs: 56.92
Res  58.15  59.50  61.00
Sup  55.80  54.45  52.90