Key overnight events:

  • US markets reopened last night from a long weekend and followed Chinese shares higher. The S&P 500 rose 1.7%, albeit volume neared 1-week lows.
  • Saudi Arabia and Russia agreed yesterday to freeze oil output at near-record levels, the first coordinated move by the world’s two largest producers to counter oil’s recent slump.
  • Crude oil futures expiring in March reached an intraday high of $31.53/bbl in reaction to the news but soon pared gains back below the $30/bbl level.
  • While the production freeze was welcomed initially, many felt that an outright cut instead was necessary to fruitfully impact prices, as reported by Bloomberg. Russian and Saudi oil output have been little changed over the past 4 years, thus freezing output at present levels is estimated to bear minimal impact on current supply glut. Commerzbank noted that the Saudi-Russian pact will be meaningless unless Iran and Iraq cooperate as well.
  • China’s surge in debt may pressure its ratings, S&P warned after yesterday’s data showed that new credit in China has soared to a record high.
  • Odds of a BOE rate hike fell after UK reported yesterday that core inflation fell to 1.2% year-on-year. The expected reading was 1.3%.



  • Spot 1.4056
  • Non-oil domestic exports fell 9.9% in January from a year earlier, worse than the 7.6% drop estimated and the 7.2% decline from a month earlier.
  • The Singapore dollar weakened, as USDSGD climbed to 1.4084, its highest in a week.



  • Spot 0.7103
  • AUDUSD reverted back to the 0.7100 handle, its mean over the past week, after testing a high of 0.7182 last night.
  • It is likely to consolidate around here further as the market waits for the release of employment data tomorrow morning.



  • Spot 1.3858
  • On the wake of oil’s adverse reaction to the Saudi-Russian pact yesterday, USDCAD bounced off its low of 1.3707 to 1.3912 last night.
  • 1.4000 remains the key resistance to the upside.



  • Spot 6.5291
  • The PBOC fixed the yuan reference rate at 0.16% weaker, causing the CNH-CNY spread to widen the most since 7th Jan.
  • USDCNH rose to 6.5384, as 6.4864 continues to be an important support level.
  • CPI is due for release tomorrow, and is estimated to have risen 1.9% year-on-year in January, a 5-month high.



  • Spot 8.6259
  • Norway’s 4Q mainland GDP (which excludes oil, gas and shipping) rose by 0.1% quarter-on-quarter, in line with estimates, while 4Q overall GDP fell by 1.2%, worse than the 0.4% decline expected. Prior GDP releases for both categories were revised downwards.
  • Despite downbeat GDP numbers, USDNOK was little changed. The immediate resistance at 8.6571, which has yet to be breached in two weeks, could be tested soon.
  • Petroleum Ministry spokeswoman Moerland stated that Norway has not participated in oil output freeze talks initiated by Saudi Arabia and Russia.


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UEN: 201419754M

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