Originally published by AxiTrader
Markets Overview:
- Equities: Nikkei 225 (-1.54 %), S&P/ASX 200 (-0.76 %)
- Commodities: WTI Crude $52.41 (-0.42 %), Brent Crude $55.18 (-0.09 %), Natural Gas $3.20 (-1.11 %), Gold $1201.56 (+0.49 %), Copper $266.40 (+0.34 %)
What traders are talking about:
Asian equity markets declined overnight, led by the Nikkei, which lost more than 1.50 % on the day. Australia’s ASX 200 came also under pressure and fell around 0.75 %. However, many of the major Asian markets were again closed for the Lunar New Year holiday, including China and Hong Kong.
In the FX market, it was very quiet, but there have been decent moves in the precious metals. Gold rallied from $1193 to $1202 overnight, as the market is getting increasingly worried about the protectionist policy measures by US President Trump. Given the unpredictability of what the Trump administration will bring, the precious metal should remain bid in the near-term. A daily close back above $1200 would confirm the short-term bottom at $1180 and pave the way for a retest of $1220.
XAU/USD - Daily Chart - 31.01.2017
The Bank of Japan decided on interest rates overnight, and there were no surprises. The central bank left rates, the size of its quantitative easing programme and inflation forecasts unchanged, while slightly upgrading its GDP forecasts. There was not much of a reaction in the markets following the announcement. USD/JPY fell from 113.71 to 113.25 initially, but quickly recovered the losses. BoJ Governor Kuroda will speak at a press conference at 0730 GMT, but it is unlikely we will hear anything surprising there either.
Australian NAB business confidence data showed some improvement, as it came in at 6.0 vs. a previous print of 5.0 in December. The general NAB business survey arrived at 11.0, also up from 5.0 in December. Private sector credit rose slightly higher than anticipated, at 0.7 % (vs. 0.5 % f/c). Overall, solid data from Australia, but it didn't move the Aussie Dollar much, which was caught in a 0.7550-70 range overnight. Flows were also light in NZD/USD, which consolidated between 0.7278 and 0.7298.
The euro recovered yesterday after German inflation data was released. The HICP figure arrived slightly below expectations, but was still at its highest level since the summer of 2013 at 1.9 %. Inflation in the Euro zone has been constantly improving, and the ECB has reasons to be satisfied. The higher inflation rates are also fueling speculations about an early QE tapering. However, the central bank is unlikely to take any rapid actions. In its most recent statement, it highlighted that the increase in inflation was partly due to the rally in oil prices, and maintained its rather neutral bias. EUR/USD traded in a 1.0690-1.0712 range overnight.
Today’s economic calendar is again quite packed. In the European session, the focus will be on German employment data, followed by GDP and CPI data out of the Euro Zone. In the US session, the main events will be Canadian GDP and US Chicago PMI figures. For the Euro Zone CPI, the market is anticipating a 1.6 % figure, an increase of 0.5 % from December. GDP is expected to come in at 0.4 % q/q and 1.7 % y/y vs. previous prints of 0.3 % and 1.7 % in December.
Economic Calendar:
- 07:30 GMT – Bank of Japan Press Conference
- 07:45 GMT - French CPI
- 08:00 GMT - ECB President Draghi speaks
- 08:55 GMT - German Unemployment Rate
- 10:00 GMT - Euro Zone GDP
- 10:00 GMT - Euro Zone CPI
- 13:30 GMT - Canadian GDP
- 14:45 GMT - US Chicago PMI
- 15:00 GMT - US CB Consumer Confidence
- 21:45 GMT - New Zealand Unemployment Rate