Good Morning,
Market Headlines
The US dollar remained the weakest currency across the FX board, although it managed to recover some ground ahead of the daily close. Equities continued to consolidate near all-time highs, the S&P500 currently down 0.3% on the day.
US weekly initial jobless claims were 793k (vs. est. 760k, prior revised to 812k from 779k) and continuing claims were 4.545m (est. 4.42m, prior revised to 4.69m from 4.592m). The steady and elevated level may be due to the extension of pandemic-related unemployment benefits in the late December support package.
Reuters reported that US House Speaker Nancy Pelosi hopes to have US President Joe Biden's COVID relief plan done by the end of February, before unemployment benefits expire on March 14. Also, US President Joe Biden will meet with a bipartisan group of senators to seek support for a major infrastructure spending program. Sharon Peacock, director of the COVID-19 Genomics UK consortium, said that the local variant is a concern, as she said that it is “likely to sweep the world,” and could affect the effectiveness of vaccines.
Commodities, Brent crude oil futures fell 0.4% to $61.35, copper rose 0.1%, and gold fell 0.9%.
Overnight Currency Ranges
AUD/USD: 0.7734 – 0.7772
EUR/USD: 1.2118 – 1.2149
GBP/USD: 1.3800 – 1.3859
USD/JPY: 104.55 – 104.80
USD/CAD: 1.2661 – 1.2706
NZD/USD: 0.7218 – 0.7251
AUD/JPY: 80.92 – 81.36
AUD/NZD: 1.0715 – 1.0728
AUD Thoughts
The Lunar New Year has begun and China’s absence for a week typically has a strong impact on liquidity and flows during the Asian time zone. With little on the data calendar, a quiet run into the weekend is expected and any direction is likely to be driven by developments in the Northern Hemisphere.
AUD/USD remained in another tight 0.7734/72 range overnight with topside resistance still expected ahead of the recent highs at 0.7820. Downside bids accumulating nearer 0.7680 and again at 0.7620.
Event Risk Data Today
NZ: The manufacturing PMI has pointed to firming business conditions ahead of the January update. The January food price index is expected to print at 1.0%, with annual growth easing as COVID disruptions pass.
Euro Area: Industrial production is expected to have remained flat in December with the major economies under lockdown.
US: The February University of Michigan consumer sentiment survey will be supported by the accelerating vaccine rollout (market f/c: 80.8).