Markets In Risk Seeking Mode, Sterling And Canadian Maintained Strength
ActionForex | Feb 26, 2015 04:05AM ET
The financial markets are generally in risk seeking mode. DJIA closed at new record high of 18224.57 yesterday, up 15.38 pts. S&P 500 also made new intraday record high of 2119.59 but closed slightly down, by -0.08% at 2113.83. Positive sentiments carried on in Asian markets with Nikkei 225 closed up 200.59 pts, or 1.08% at 18785.79. US treasured edged lower but loss was limited. Nonetheless, it should be noted that U.S. 10-Year yield stayed below 2% handle and closed at 1.969%, slightly down. Gold managed to reclaim 1200 handle but recovery is so far quite weak. Crude oil also continues to gyrate around 50 handle. Dollar is slightly softer as recent consolidation continues with dollar index dipping to as low as 91.142 so far today but it's, after all, staying in recently established range.
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In the currency markets, Canadian dollar and Sterling remained the two strongest major currencies this week. Both were support by central bank expectations. BoC governor Stephen Poloz's speech earlier this week suggested that the the central bank will not cut interest rates against next week. Meanwhile, BoE officials hinted that the central could hike rate earlier than expected. Some analysts pointed out that markets could be pricing in less risk of an earlier hike from BoE for the moment, and there are rooms for further rebound. From our side, we're point out again that GBP/USD is now inside key near term resistance range around 1.5540 and we're seeing risk of a near term reversal.
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On the data front, New Zealand trade balance showed NZD 56m surplus in January. The data gives a mild boost to Kiwi. German Gfk consumer sentiment improved to 9.7 in March, better than expectation of 9.6. UK Q4 GDP revision and index of services will be released in European session. Also, Eurozone M3 and confidence indicators will be featured. Today's US session is rather busy. US will release CPI, durables and jobless claims. Canada will also release consumer inflation data.
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