The FX pairs have been fairly steady on Wednesday although Sterling was a bit firmer after UK PM Theresa May has promised to resign if MPs back her Brexit deal. In early Asian trade on Thursday, the UK House of Commons has voted down all 8 of her possible proposals leaving the UK in greater disarray than ever and sending Sterling down by 100bp very quickly. Elsewhere, the Aus$ and the Kiwi both remain heavy after yesterday’s surprise dovish turn by the RBNZ, while EurUsd has been rangebound but looks heavy.
The stock indices were somewhat weighed down by lower US yields and the prolonged inversion in the US treasury yield curve, but have recovered towards the end of the Wednesday session.
The metals are slightly lower, as is WTI although it has been a fairly tight session while waiting on today’s German/US data.
Looking ahead, Thursday will begin with the ANZ NZ Activity Outlook and Business Confidence for March, which could add further pressure to the Kiwi, but Asia will be otherwise quiet. Europe will look to the German (CPI, exp 0.6%mm, 1.5%yy; HICP exp 1.6%yy) and the EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, for guidance while the main event of the day will be the US Q4 GDP (exp 2.4% annualised) and US Personal Consumption Expenditures (exp 1.7%qq). Also due will be the February Pending Home Sales (exp -1.0%mm, -1.8%yy), the Kansas Fed Mfg Activity and speeches from the Fed’s Quarles/Clarida/Bullard.
Economic data highlights will include:
Thur: NZ ANZ Business Confidence, EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, German CPI, US Q4 GDP, US Personal Consumption/Expenditure, Pending Home Sales, Kansas Fed Mfg Activity , Speeches; Fed’s Quarles, Clarida, Bullard
Market moves, in brief:
FX: DXY 96.90 (+0.13%)
Bonds: US10Y; 2.381% (-1.70%), German 10Y; -0.078%(-389%), UK 10Y; 1.015% (+0.75%), Australian 10Y; 1.786% (-2.65%), NZ 10Y; 1.765% (-5.87%), China 10Y; 3.095% (-1.43%)
Stock Indices: DJI; -0.13%, S+P; -0.46%, NASDAQ; -0.58%, EUStoxx50; +0.50%, FTSE100; -0.03%, Shanghai Composite; +0.85%,
Metals: Gold 1309 oz (-0.48%), Silver 15.27 oz (-1.01%), Copper 2.862 lb (-0.03%), Iron Ore 83.63 per tonne (-2.53%),
Oil: WTI 59.38 pb (-1.0%)
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