Key overnight events:
- The S&P 500 declined 1.6% last night, halting a 2-day rebound. Equity losses piled up during the last hour of US trading as crude oil resumed its sell-off that has roiled financial markets this year.
- After rebounding to a high of $32.74/bbl yesterday, crude oil futures expiring March tumbled almost 10% to a low of $29.61/bbl this morning, following Saudi Aramco’s statement that it is maintaining its investment plans despite the ongoing rout in oil prices.
- With the Fed starting its two-day meeting today, and the BoJ and RBNZ concluding policy meetings later in the week, markets looks set to remain jittery as speculation mounts on how global central banks will react to the 2016’s volatile start.
- Spot 1.4300
- Industrial production growth figures for last month, due for release soon today, are expected to remain negative at -7.2% year-on-year.
- USDSGD continues to remain largely steady over the past 2 days, only gaining slightly from yesterdays close to trade at the 1.4300 handle.
- Spot 0.6948
- Despite Australian markets being shut today for a national holiday, AUDUSD retraced back below 0.7000 to a low of 0.6934 this morning, driven by broad risk-off sentiment overnight.
- Bloomberg reports that a third straight quarterly CPI miss tomorrow may push the RBA a little closer to easing in the near term.
- Spot 1.4293
- Moving in tandem with oil’s broad retracement, USDCAD rebounded back up to as high as 1.32% from its low of 1.4115 yesterday to a high of 1.4301 this morning.
- USDCAD is expected to remain in a wide range until the direction of oil becomes clearer.
- Spot 6.6160
- According to data compiled by Bloomberg, China’s capital outflows increased to around US$158.7 billion in December, bringing the total in 2015 to an estimated US$1 trillion.
- USDCNH pared back most of last night’s decline by midday today, reaching a high of 6.6165. It still continues to fluctuate mainly within 6.5800 – 6.6200, its core range since 15th Jan.
- Spot 8.7632
- Norway’s prime minister, finance minister and central bank governor held an extraordinary meeting yesterday in order to assess the effects the ongoing oil rout is having on its economy. They concluded that the situation is not perilous enough to warrant additional measures on top of the record budget stimulus that is already in place.
- USDNOK has so far remained largely unchanged, despite the move in oil overnight, trading around 0.1% higher from its close the previous day.