FX News Today

Reserve Bank of Australia held rates steady at 2.00%, as was widely expected. Policy remains, not surprisingly, data and event driven as the bank will follow new information to see if the improvement in the job market is sustainable and (repeating a key line from February) whether the “recent financial turbulence portends weaker global and domestic demand.” Notably, Stevens now says “continued low inflation would provide scope for easier policy” should that be needed to support demand. He said it “may” provide scope back in February. He was again largely constructive on domestic growth, saying that the expansion in the non-mining parts of the economy strengthened in 2015. On the exchange rate, he said it “has been adjusting to the evolving economic outlook.”

The People’s Bank of China (PBOC), restarted easing operations on Monday. The bank added approximately $100 billion worth of long-term financing into the Chinese economy to mitigate the pain from increased unemployment and bankruptcies in those industries that have been suffered from overcapacity. According to a statement on PBOC website the bank was cutting the reserve requirement ratio, or the amount of cash that banks must hold as reserves, by 50 basis points, taking the ratio down to 17 percent for the biggest lenders.

China’s manufacturing sentiment shrunk in February, adding to ongoing concerns over the pace of slowing in China’s economy. The official manufacturing PMI fell to 49.0 in February from 49.4 in January. The Caixin manufacturing PMI declined to 48.0 in February from 48.4 in January.

Yesterday’s US reports revealed a sharp 8-point Chicago PMI February plunge to 47.6 alongside a 3-point uptick in the Dallas Fed index to -31.8 from a -34.6 expansion-low. We also saw a 2.5% January drop in the pending home sales index to a lean 1.4% y/y rise, which reinforces the view that housing sector growth is moderating despite a winter weather-lift. Yesterday’s figures counter Friday’s more encouraging reports that documented resilience in the US economy to the global growth pull-back.

Main Macro Events Today

• EMU Unemployment Rate: So far the slowdown in confidence indicators hasn’t reached the labour market and jobless numbers continue to come down. We are looking for a further decline in the German sa number of 10K (median same) in February, which would leave the jobless rate unchanged at 6.2%. Eurozone January unemployment meanwhile is seen steady at 10.4%, with headline rates coming off highs, but disparities across countries remaining large and youth unemployment still much too high. With confidence indicators heading south and global headwinds getting stronger, it seems only a matter of time until the labour market starts to feel the chill.

• Canada GDP: The Q4 and December GDP reports are due today. These two releases are the key reports in a busy week. December GDP is expected to moderate to a 0.1% m/m pace (median same) following the 0.3% gain in November. The separate real GDP measure is seen edging 0.3% higher in Q4 (median is for no change) after the 2.3% bounce in Q3. The reports will show a domestic economy that was limping along, yet still expanding, going into the new year.

• US Manufacturing ISM: The February ISM is expected to decline to 48.0 (median 48.5) from 48.2 in January and 48.0 in December. Other measures of February producer sentiment have been mixed and despite some headline improvements the various components of the releases have remained weak which could spell downside risk for the ISM. Broadly speaking, we expect the ISM-adjusted average of all measures to decline to 48 for the month, a new cycle low, from 49 in January and 50 in December.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Asian stock markets moved higher and are heading for a second weekly gain, with China bouncing back after the central bank said it sees room for monetary easing. The ASX closed with a marginal loss, but most other markets are up as G20 finance heads discuss stimulus efforts and U.S. and U.K. stock futures are also up. Oil prices are slightly down on the day, but above USD 33 per barrel as risk appetite returns. BoE’s Carney warns against “zero sum game” of negative interest rates, while highlighting sizeable downside risks”. Released overnight U.K. GfK consumer confidence came in much weaker than expected. The European calendar still has EMU ESI Economic Confidence as well as preliminary February inflation data from France, Spain and Germany.

Japan’s national CPI was as expected, with the total CPI and core CPI (excluding fresh food only) coming up zero (0.0%) in January on an annual basis after respective gains of 0.2% y/y and 0.1% y/y in December. The core CPI, which takes out food and energy, grew 0.7% y/y in January after the 0.8% rise in December. Tokyo CPI was up 0.1% y/y in February, contrary to an expected drop following an 0.3% pull-back in January. The Tokyo core CPI fell 0.1% y/y in February, also better than expected after the 0.1% drop in January. The outlook remains less than upbeat for Japan’s economic and CPI growth, as the shock-and-awe of negative rates is not having the desired impact.

PBoC’s Zhou said China has room to add accommodation, saying “China still has some monetary policy space and multiple policy instruments to address possible downside risks.” Current policy is “prudent and relatively accommodative” he said. The Shanghai Comp is a modest 0.6% higher and the CSI 300 up 0.8% after suffering 6% declines Thursday, aided today by Zhou’s comments, a steady Yuan and lower money market rates. The Hang Seng has bounced 1.6% while the Nikkei 225 is 0.8% higher.

SF Fed dove Williams said the “Taylor Rule” is too rigid and forecast-reliant, and he opposes tying monetary policy to a single rule. Otherwise on monetary policy he largely repeated the “gradual rate hikes, further economic growth, inflation rebound” mantra. Williams sees no sign of a looming recession, and is less concerned about Chinese growth than others, in Q&A following his speech. However, he still wants to “take things slowly” on rates. He acknowledged that negative rates are potentially in the policy toolbox, but such actions won’t be taken over the foreseeable future, especially as there are unintended consequences. Domestic demand will be the main driver of the U.S. economy over the next couple of years. Indeed, he sees upside risks from consumer spending fueled by low energy prices.

The US initial jobless claims rose to 272k (median 270k) from 262k for the week-ended February 13. Continuing claims fell to 2,253k from 2,272k (was 2,273k) for the week-ended February 6. This is near levels last seen in 2006. The four-week average fell to 272k from 273k and 281k before that. Claims are averaging 268k in February, 284k in January and 277k in December.

 Main Macro Events Today

• German Consumer Price Index: The February Y/Y CPI numbers are released today and are expected to come in at 0.2%, down 0.3% from January. Low inflation numbers are due to soft energy prices while the annual contraction eased in December. This suggests that there is no real danger of a deflationary spiral.

• US Gross Domestic Product: The second release on Q4 GDP is out on Friday and we expect the headline to be revised down to 0.5% (median 0.4%) from 0.7% in the first release and 2.0% in Q3. Driving our expectations for downward revisions we expect to see inventories revised down by $14 bln and construction spending revised down by $8 bln. However, we expect some offset from an $11 bln upward revision in net exports and a $2 bln upward revision in equipment spending.

• US Personal Income: January personal income is out Friday and should reveal a 0.4% (median 0.4%) increase for headline income with consumption growing by 0.3% (median 0.3%). This compares to December figures of 0.3% for income and unchanged for consumption. We expect the chain price index to reveal a flat rate for the headline with a 0.3% core increase.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Rumors China will boost its deficit spending for an additional 1% in GDP saw oil and equity prices surge higher, to the detriment of Treasuries. The S&P bounced back into the green after a better than 1% decline earlier and closed up by 0.44%, while WTI crude closed higher and is now trading near $32.00 again.

BoC Schembri: A resilient financial system could withstand a housing shock. He noted that public authorities have “taken appropriate measures to mitigate it.” And the vulnerability should stabilize as the economy improves, household incomes rise and interest rates normalize. He noted that the vulnerability associated with elevated household debt has been on the rise over the past decade. That debt has become more concentrated in highly leveraged households. Hence, the bank’s assessment hinges on both the magnitude of that debt and its distribution. Overall, there is nothing really new here, as the BoC continues to express confidence in the stability of the financial system and for a gradual, orderly resolution to currently elevated levels of household debt. In other words, based on their outlook, household debt is not going to hamper their ability to keep rates at currently lean levels for an extended period or to cut rates.

US New home sales fell 9.2% in January to a 494k rate from a 544k clip in December. February last year set a new high back to February ’08 and compares to a low of 270k in Feb. ’11. The headline was weaker than the median forecast of 520k. Sales climbed in the Northeast (3.4%) and South (1.8%), but fell in the Midwest (-5.9%) and West (-32.1%). The median sales price fell 4.5% to $278,800 from $295,800 (was $288,900).

US Markit services PMI fell 3.4 points to 49.8 in the flash February print, after dipping to 53.2 in January from 54.3 in December. Indeed, the index has been slipping since hitting 56.1 in November. This is the lowest reading since October 2013 while it was 57.1 a year ago. The employment component dipped to 54.2 from 54.3. The flash composite index slid to 50.1 in February from January’s 53.2, and is also the weakest print since October 2013. The headline drop into contractionary territory is bad news for the services sector, which has been a stalwart for the health of the overall economy and will exacerbate the erosion in equities and risk-off trades today.

 

Main Macro Events Today

• UK GDP: YoY fourth quarter Gross Domestic Product from is out today. This is the second release and no change is expected from the previously published 1.9% number.

• Eurozone CPI: no change is expected on today’s January YoY Consumer Price Index release from 0.4% change in December.

• US January durable goods orders: expected to grow 2.0%. Shipments expected at 0.5%. Inventories expected to grow 0.1%. I/S ratio expected at 1.68, steady from December. Forecast risk: downward, as there was a decrease in Boeing orders in January.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Oil and stocks traded lower after the Saudi Oil Minister seemed to indicate that a producer freeze was not universally accepted, while extending an olive branch to shale producers and caution on the outlook for oil prices, which would ultimately depend on market forces. That followed the Iranian Oil Minister saying the freeze was “ridiculous and laughable.” On net, WTI crude is back near $31 bbl, NASDAQ  close 1.62% lower, while the S&P 500  finished yesterday’s trading down by 1.25%.

Japanese services PPI fell 0.6% in January after a 0.1% December gain. The annual pace slowed to 0.2% y/y from 0.4% y/y previously, and has eased from the 0.7% y/y pace registered in August. This is not good news for the BoJ which has pulled out all stops via a shift to negative rates to try to combat deflation and a slowing in growth.

KC Fed’s George said March should be a “live” meeting, in a Bloomberg Radio interview, holding true to her hawkish feathers. Indeed, she flatly stated it’s her objective to remove some policy accommodation. Note that she is a voter this year too. She expects about 2% growth this year and doesn’t believe that recent data suggest a shift in the outlook since December. The FOMC has to look at the medium term in making policy decisions, adding it’s too soon to say if the market volatility to start the year will alter her views. She believes inflation is stable and doesn’t believe in deflation. She does see some headwinds from the oil market and the dollar. At the same time Fed VC Fischer said we simply don’t know what we’ll do in March, in the text of his speech on “Recent Monetary Policy Developments.” He noted the further improvement in the labor market and the pickup in some spending indicators. But he said it’s too early to judge the ramifications of market turmoil, adding that the Committee is closely monitoring global economic and market conditions. However, if the recent financial market developments lead to a sustained tightening of financial conditions, that could impact U.S. growth and inflation. He also said that cheaper oil prices suggest inflation could remain low for a longer period of time than anticipated.

US Consumer Confidence fell to 92.2 from 97.8 (was 98.1, median 97.5) in January. Last January’s 103.8 headline set a new high back to Oct ’07, the recent low was 40.9 in October ’11.Expectations fell to 78.9 from 85.3 (was 85.9) in January. Current conditions rose to 112.1 from 116.1 (revised from 116.4) from January. The job strength differential fell to -2.1 from -0.6 in January. Inflation data’s one year ahead number fell to 4.7% from 4.8% in January.

 

Main Macro Events Today

• US New Home Sales: January new home sales are out Wednesday and should reveal a 4.4% headline decline to a 520k (median 520k) pace for the month from 544k in December and 491k in November. Already released housing data for January had starts slowing to 1.099 mln from 1.143 mln in December and existing home sales increased to 5.470 mln from 5.450 mln in December.

• The US Services ISM: is expected to rise to 54.0 from 53.5 in January. The July spike to 59.6 set a new post-recession high. Forecast risk: downward, given weakness in earlier month releases. Market risk: downward, as a run of weak data could impact rate hike timelines. The ISM-adjusted figure for the ISM-NMI tends to track that of the Philly Fed.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Sterling has taken a beating, losing 2% to the dollar, while the currency’s six-month implied volatility shot to 12%, the highest since Nov 2011. It’s all about Brexit, with the debate now very much in full swing following the weekend announcement that the in-out referendum will be held on Jun-23, which in turn followed PM Cameron’s obtainment from Brussels of revised terms of EU membership. The big kicker was London mayor Boris Johnson, who yesterday detonated a bombshell of headlines by announcing that he will be backing the ‘out’ campaign.

Moody’s warned UK about Brexit “economic costs”, which it says will be greater than the “economic benefits, “and, in the event, said it would consider assigning a negative outlook on its Aa1 rating of UK sovereign debt unless the country “managed to negotiate a new trade agreement with the EU that preserves at least some of the trade benefits of EU membership.” Moody’s warned of a “prolonged period of uncertainty.” Cable’s Jan-22 low at 1.4202 looks more than likely to be breached, which would put sterling at the lowest levels since March 2009.

UK CBI industrial trends unexpectedly slumped in February to a -17 reading in the headline total orders reading, down from -15 in the month prior and off the median forecast for an improvement to -12. Among the components, export orders lifted to -19 from -22, but output expectations fell to +11 from +14 and selling prices dipped to -3 from -1. Sterling dipped to fresh lows in the wake of the data, though selling pressure is more to do with prevailing Brexit worries.

US Markit PMI fell to 51.0 in the flash February manufacturing PMI from 52.4 in January. It’s the lowest reading since October 2012 and was at 55.1 a year ago. The new order index slid to 51.7 from 53.6, and the order backlog reading dropped to its lowest since September 2009. The report is another reflection of the erosion in manufacturing. Indeed, Markit reported the slowdown was “overwhelmingly linked” to the softer underlying demand patterns, weaker business sentiment, alongside uncertainty regarding the general economic outlook. Weather was cited by only a small minority of participants.

US Chicago National Activity index rebounded to 0.28 in January from a revised -0.34 in December (was -0.22) and -0.39 in November (was -0.36). This breaks a string of 5 negative prints, and is the highest since July. Today’s data brought the 3-month moving average up to -0.15 from -0.30 (revised from -0.24) and -0.20 in November (revised from -0.19). This is a 3rd tier report that won’t really impact the markets.

Main Macro Events Today

• German GDP: second release is expected to confirm the Q4 output at 0.3% (Q/Q) and 1.3% (Y/Y).

• German IFO: sentiment index is expected to come in at 106.7, slightly below the 107.3 in January. January’s reading was a disappointment and was the weakest number since February last year. December was revise down to 108.6 from 108.7. Global concerns about the outlook for the world economy and falling oil prices clearly have hit German confidence.

• US Existing Home Sales: January existing home sales are out Tuesday and should reveal a 0.7% headline increase to 5.500 mln (median 5.355 mln) clip for the month from 5.460 mln in December and 4.760 mln in November. The big November-December swing was driven by the implementation of new “know before you sign” regulation that pushed some November closings into December. There is some downside risk to the January headline as that effect unwinds.

• US Consumer Confidence: February consumer confidence is out Tuesday and should reveal an increase to 98.5 (median 97.5) from 98.1 in January. The first release on Michigan Sentiment for February had the headline falling to 90.7 from 92.0 in January but the IBD/TIPP Poll for the month improved to 47.8 from 47.3 and the Bloomberg Weekly Consumer Comfort survey is poised to average a slightly higher 44.4 from 44.3 in January.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

The yen has held firm amid a moderate risk-off theme in Asia, where stock markets traded mostly lower after Wall Street’s best-in-eight-weeks three-day rally came to an end. USDJPY dipped to a four-day low at 112.71, while the equity market correlative AUDJPY cross fell 1.9%. Both USDJPY and AUDJPY still remain comfortably above trend lows, while most of the main Asian equity indexes are still about 3% higher on the week despite today’s declines. Oil prices are down about 1% but remain a good 20% or so above trend lows. Japanese data today were discouraging, with the all Industry activity index falling 0.9% m/m in December, below the -0.3% median forecast, while department store sales tumbled 1.9% y/y in January.

BoE MPC’s Weale is concerned about market expectations regarding when the central bank will hike interest rates. He remarked in an interview with the Irish Times that “I would be surprised if people had to wait as long as markets are currently implying,” although he added that “markets may well turn out to be right.” BoE deputy governor Cunliffe also described yesterday this as unwarranted, which caused sterling to rally, although the latest survey from Reuters found a consensus among market economists expecting the a tightening by around the end of this year. Weale argued that the disinflationary effects of last sterling strength “is not an effect that is going to last forever,” and that “if we look at core measures of inflation, those are closer to the target but still below the target.” He said that wage pressure as a key issue. While prospects of BoE tightening remain in the distance, Cunliffe and Weale’s interjections are clearly aimed at balancing the market narrative.

SF Fed’s Williams has not really changed his outlook on the US or the global economy, despite the recent fluctuations, he said, adding that he will adjust his views on conditions and the policy path with more data. The “daily dives” in equity markets are not accurate reflections of the economy and shouldn’t be viewed as “the four horsemen of the apocalypse.” Growth is still estimated in the 2.25% area for the year and the unemployment rate should dip further and hit 4.5% by later in the year. He is not happy about the inflation rate but expects it to return to 2% over the next 2 years. He is monitoring potential risks and “closely watching” developments abroad. This isn’t anything new from Williams, and he is not a voter this year.

Yesterday’s US reports were encouraging on net, though with diverging signals from a tightening in initial claims but with big February Philly Fed component declines and a 0.2% January leading indicators drop. For claims, we saw a 7k decline to just 262k in the BLS survey week to leave a 23k two-week drop that reversed elevated holiday levels and left upside risk for our 190k February payroll estimate. For Philly Fed, the slight headline rise to -3.5 accompanied a sharp ISM-adjusted drop to a 45.5 three-year low thanks to declines in every component.

Main Macro Events Today

• US Consumer Price Index: the January headline CPI is expected to decline 0.1%, while the core index rises 0.1%. Forecast risk: downward, as further weakness in gasoline prices could weigh. Market risk: downward, as inflation undershoots may affect the timing of additional rate hikes.

• Canada Retail Sales: are expected to fall 1.0% in December after the 1.7% surge in November. The ex-autos sales aggregate is seen declining 0.7% m/m in December after the 1.1% bounce higher in November. An as expected drop in total retail sales that is accompanied by a similar sized pull-back in the “real” (price adjusted) sales basis would partly counter the firm manufacturing and wholesale shipment gains seen in December. We expect an 0.2% gain in December GPD.
• Canada CPI: We expect the CPI, due today, to expand at a 1.7% y/y pace in January, accelerating slightly from the 1.6% growth rate in December. CPI is seen falling 0.1% month comparable basis in January after the 0.5% plunge in December. Gas prices fell 7.0% in January compared to December, which is expected to weigh on month comparable CPI.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

China’s CPI improved to a 1.8% y/y growth rate in January, slightly slower than expected following the 1.6% y/y rate of increase in December. CPI is gradually accelerating, with January’s growth rate the fastest since August of 2015’s 2.0%. PPI improved to a -5.3% y/y rate of contraction, nearly as expected following the 5.9% y/y rate of decline in December. The climb in annual CPI growth (albeit to still modest rates) and reduction in the pace of PPI decline suggests there could be some stabilization in China’s economy, although policy makers have a long way to go to tame overcapacity.

Australia’s unemployment rate climbed higher in January as full-time employment disappointed and dropped most for three years. This is seen signaling diminishing stimulus from record-low interest rates and a weaker currency. Jobless rate rose to 6% from 5.8% while markets expected the rate to be 5.8%. Employment fell 7,900 from December while consensus forecast was a 13,000 gain.

FOMC minutes: “many” were concerned over increased downside risks, especially amid uncertainties over economic conditions abroad, financial market stability, and inflation. That uncertainty was a large part of the decision not to assess the balance of risks. Further tightening of financial conditions could amplify the downside risks, while recent developments suggested risks were no longer balanced. The minutes noted the encouraging signs in the labor market, but data on spending and production were disappointing. Additionally, oil and commodity price declines and the firmer dollar were seen keeping inflation low over the near term. And there was a wide range of outlooks for the medium term, with recent developments having “many” now seeing a more uncertain outlook on prices, with risks pointed to the downside. The slowdown in China was seen impacting emerging markets, and together could lead to more of a drag on the US There weren’t any major surprises in the minutes given what had occurred prior to the January 26, 27 meeting, and the subsequent policy decision/statement.

Saudi Arabia’s credit rating was cut to A- from A+ by S&P amid the rout in oil, with the outlook revised to “stable” from “negative.” This is the second cut in 6 months as the rating was trimmed to A+ from AA- in late October. The ratings agency said “The decline in oil prices will have a marked and lasting impact on Saudi Arabia’s fiscal and economic indicators given its high dependence on oil.” Oil was trading near $50 at the time of the October review.

Main Macro Events Today

• ECB Monetary Policy Meeting Accounts: are due today and contain an overview of financial market, economic and monetary developments. It’s followed by a summary of the discussion, in an unattributed form, on the economic and monetary analyses and on the monetary policy stance. The accounts offer a fair and balanced reflection of policy deliberations.

• US Initial Jobless Claims: Claims data for the week of February 13th should reveal an increase in the headline to 274k (median 275k) from 269k last week and 285k in the week before that. Claims data is typically volatile through the holiday season but as we begin to move past that we expect to see the February average improve to 273k from 284k in January and 277k in December.

• US Philadelphia Fed Index: February Philly Fed is out today and should reveal a headline increase to -3.0 (median -2.8) from -3.5 in January. The already released Empire Stateindex for February had the headline at a still negative -16.6 from -19.4 in January but the ISM-adjusted measure managed a stronger rebound with a rise to 47.1 from 43.4. Despite the improvements we expect the ISM-adjusted average of all measures to remain at 49 in February, steady from January and matching the three year low for this measure.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

ECB’s Nowotny fretting over market expectations. The Austrian central bank head said central banks must watch markets but not be guided by markets and told Swiss financial website Cash that he is concerned market expectations ahead of the March 10 meeting could become as excessive as in December, when expectations had “lost touch with reality”. Nowotny added that the turbulence in global markets is mainly driven by emerging market developments, an sovereign funds aiming to ensure liquidity. He admitted that market turmoil constitutes “a massive destruction of value, which is very negative for overall sentiment”. However, Nowotny stressed that monetary policy can only improve conditions for growth and was very successful in preventing deflation and keeping credit markets intact, but that actual investments have to be made by investors.

Boston Fed dove Rosengren said the Fed would be “in no rush at all” to hike rates if US inflation does not rise and would cut rates if missing 2% growth, unemployment rising and significant weakening in U.S. labor markets was seen. That’s about par for the course from the regional Fed president. Fed’s Kashkari said that staff will continue to analyze NIRP (Negative Interest Rate Policy) as a potential policy tool, while noting that global economic and financial developments will be important inputs at the March FOMC. That said, the Fed expects a gradual increase in interest rates to be the base case. The Fed still seems quick to deny NIRP, while mulling its options for the timing of a second hike.

A third of energy companies could go bankrupt according to a report released by Deloitte, as credit risk zooms to a record high as low commodity prices cut access to cash and debt. “The roughly 175 companies at risk of bankruptcy have more than $150 billion in debt, with the slipping value of secondary stock offerings and asset sales further hindering their ability to generate cash. These companies have kicked the can down the road as long as they can and now they’re in danger of kicking the bucket, said William Snyder, head of corporate restructuring at Deloitte, in an interview. ‘It’s all about liquidity,’” noted a Reuters report.

 Main Macro Events Today

• FOMC minutes will be scrutinized for clues on Fed’s thinking last month. However, the report will be a little out of date following Yellen’s testimony last week, and given the volatility in the markets since the policy meeting. Indeed, recent events have taken a March rate hike off the table, and have pretty much pushed out the next tightening into later in the year. Nevertheless there were a couple of interesting changes in the policy statement which will make for a worthwhile read, and especially the discussions on growth, inflation, and the importance of international developments. First the Fed downgraded its growth outlook somewhat, so we’ll look to specifics on the extent of policymakers’ worries over growth. Additionally, the FOMC revealed diminished confidence that inflation would be picking up toward the 2% target over the medium term, and it will be interesting to see how widespread that angst was. Also, the Fed removed its “balance of risk” stance as it wanted to monitor global economic and financial developments for guidance.

• US Industrial Production: January industrial production is out today and should reveal a flat (median 0.3%) headline following the 0.4% decline in December and the big 0.9% drop in November. Despite some rebound in manufacturing employment, hours worked declined 0.2% in January and mining sector data continued to face headwinds from the drop in oil prices. Capacity utilization should tick down to 76.4% (median 76.6%) from 76.5% in December.

• US Produces Price Index: January PPI data is out Wednesday and is expected to reveal a 0.1% (median -0.2%) decline for the headline with the core index up 0.1% (median 0.1%) for the month. This comes on the heels of respective December figures of -0.2% for the headline and 0.2% for the core. Oil prices declined further through January which should continue to weigh on price measures.

Janne Muta

Chief Market Analyst

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