Daily Observations:

Asian stocks pared gains from this morning ahead of tonight’s much anticipated Congressional address by US President Donald Trump. Gold declined after reaching its 200-day moving average while oil held steady above $54/bbl.


  • Durable goods orders rose 1.8% last month, swinging back into positive territory following a 0.8% decline in December; analysts had predicted a 1.6% gain.
  • Pending home sales in January slid 2.8% from a month earlier, missing the 0.6% gain expected.
  • The Dallas Fed manufacturing activity index rose to 24.5 in February, from 22.1 the month prior, and surpassing the consensus estimate of 19.4.
  • President Trump will propose boosting defence spending by $54 billion in his first budget plan, offset by an equivalent cut from the rest of the government’s discretionary budget, according to administration officials. Most federal agencies other than those involved in security will see their budgets reduced to make room for 10% higher spending on defence.
  • The Fed’s Dallas President Robert Kaplan reiterated his view that policy makers should raise rates “sooner rather than later” and without paying excessive attention to market expectations.
  • According to fed funds futures pricing data on Bloomberg, the probability of a March rate-hike rose to 50% last night, from 34% just 5 days ago.
  • The US dollar reverse earlier sessions declines on the back of hawkish comments from Kaplan and ahead of Trump’s address to Congress later tonight. The Bloomberg Dollar Spot Index rose 0.1% overnight, its second consecutive day of strengthening.
  • US yields rose from near-2017 lows, following increased odds of a March rate-hike. The benchmark 10yr Treasury yield gained 6bps to 2.37%
  • US equities inched to new record highs; the S&P 500 Index gained 0.1% as gains in energy stocks offset losses from telecommunication shares.


  • Independent French presidential candidate Emmanuel Macron opened up his biggest lead yet over Republican Francois Fillon and began narrowing the gap with National Front Leader Marine Le Pen, helped by endorsements and his rivals’ legal troubles.
  • 2 polls published Sunday gave Macron the support of 25% of the French electorate going into the first round of the election, 2 points behind Le Pen and with Fillon trailing behind around 20%.


  • Industrial production last month slid unexpectedly by 0.8% month-on-month and rose 3.2% year-on-year, missing the median estimates of 0.4% and 4.3% respectively.
  • Retail trade over the same period gained 1.0% from a year earlier, matching expectations, and 0.5% from a month before, beating the 0.3% rise predicted by economists.


  • According to a report from S&P, the main threats to the credit quality of Australia’s banks stem from increasing economic imbalances, pressures on sovereign credit quality and a potential weakening of government support. The ratings firm added that most Australian banks and finance companies are on negative outlook and potentially face a one-step rating downgrade.


  • According to economists surveyed by Bloomberg News, China will set lower economic growth and monetary expansion targets this year as policy makers switch gears to curb excessive credit growth and reduce financial risks. The consensus estimate for this year’s GDP is about 6.5%, versus a range of 6.5% to 7% in 2016.
  • China’s annual gathering of the legislature known as the National People’s Congress gets underway this weekend in Beijing.

Precious Metals:

  • Spot gold declined 0.4% to $1,251.05/Oz earlier today, but looks set to gain for the second straight month ahead of Trumps’ address to Congress tonight.
  • Having broken the previous resistance of $1,250/Oz, the next resistance comes in the form of the 200-day moving average at $1,263/Oz, which was tested overnight.
  • Silver for immediate delivery rebounded off the $18.5000/Oz handle overnight, and declined by as much as 0.9% to $18.2301/Oz earlier today.


  • Crude oil futures expiring in April closed 0.5% lower in New York last night before paring losses and gaining 0.3% to $54.23/bbl earlier today, amid a standoff between record US stockpiles and OPEC’s bid to drain a global surplus, pushing volatility to the lowest level in more than 2 years.
  • Members of OPEC are meeting more than 90% of their agreed curbs, Secretary General Mohammad Barkindo said in Nigeria. Meanwhile, US inventories is expected to have climbed by 3 million barrels last week to an all-time high, according to a Bloomberg survey before a report due tomorrow.



  • Spot 1.4027
  • USDSGD extended recent declines, falling by as much as 0.5% to 1.4001 last night before paring some of its declines earlier.
  • The currency pair has broken below its 100-day moving average and is currently supported just above the 1.4000 psychological level.



  • Spot 0.7687
  • AUDUSD gained 0.3% to 0.7696, extending a directionless trend that has seen the currency pair fluctuate below the 0.7700 handle since the beginning of the month.
  • Despite its move from 0.7200 in end-December last year, the currency pair is beginning to show signs of exhaustion; a retracement back to the 0.7500 support is possible over the medium-term.



  • Spot 1.3196
  • USDCAD advanced 0.6% to 1.3196, falling short of breaching the key 1.3200 resistance.
  • If the pair manages to break beyond 1.3200, a move higher to 1.3400 could occur.



  • Spot 6.8557
  • The PBOC strengthened its daily reference rate by 0.09% to 6.8750 to the dollar.
  • USDCNH declined 0.1% to 6.8539 earlier.
  • The currency pair has been largely in consolidation phase for most part of the year so far, with movements constrained within the range of 6.8000 to 6.9000.
  • The 6.8000 remains as a significant support level.



  • Spot 112.35
  • USDJPY continues to be buoyed above the 112 handle, gaining 0.5% to 112.84 last night before erasing gains today.
  • A retreat below the 111.60 support could bring the currency pair another leg lower to 110.



  • Spot 1.2433
  • GBPUSD continues to be supported above the key 1.2400 level, despite paring an overnight gain which saw the pair rise to a high of 1.2479.
  • A break below the February-low of 1.2350 could drive the currency pair lower to around 1.2100 – 1.2200.
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