Research Team at Deutsche Bank, suggests that yesterday’s Fedspeak offered two very differing opinions ahead of next week’s FOMC meeting.

Key Quotes

“Fed Vice-Chair Fischer played down the suggestion that the link between strong employment and inflation was broken, saying that although the link has never been very strong, ‘it exists and we may well at present be seeing the first stirrings of an increase in the inflation rate’.

Meanwhile, speaking at a separate conference in Washington, Fed Governor Brainard opined that ‘I am heartened by the continued strong progress on employment and the resilience of American consumers, which stand against a considerably more challenging global backdrop’. That said, she also warned that ‘we should not take the strength in the US labour market and consumption for granted’ and that ‘sources of robust demand around the globe are few, and sources of weakness relatively greater’.

Brainard also cautioned that ‘tighter financial conditions and softer inflation expectations may pose risks to the downside for inflation and domestic activity’ and that ‘from a risk-management perspective, this argues for patience as the outlook becomes clearer’.”

Research Team at Deutsche Bank, suggests that yesterday’s Fedspeak offered two very differing opinions ahead of next week’s FOMC meeting.

(Market News Provided by FXstreet)

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Emile Cardon, Research Analyst at Rabobank, suggests that China’s leaders had set an expansion goal of 6.5%-7% for 2016 which is clearly too optimistic in their view and the latest data are signaling a slower growth rate.

Key Quotes

“Chinese growth will continue to grind lower and a chunk of domestic capital will continue to look for better investment opportunities offshore. More news came from China via the FX reserves. These were USD28.6 billion lower in February compared to January.

Although this outcome was at the low end of expectations, lunar year distortions likely played a role. This also applies to the trade figures: the Chinese trade surplus plunged by more than USD 30bn in February to USD32.6bn with exports down a whopping 20.6% YoY. Moreover, the upshot of these FX reserves and trade balance figures combined is that they still point at very sizeable capital outflows.”

Emile Cardon, Research Analyst at Rabobank, suggests that China’s leaders had set an expansion goal of 6.5%-7% for 2016 which is clearly too optimistic in their view and the latest data are signaling a slower growth rate.

(Market News Provided by FXstreet)

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Bank of England’s Carney, while addressing questions from Treasury Select Committee, said Pound could fall and lead to rise in inflation if Britons vote in favor of Brexit.

Regarding inflation, Carney added they can achieve inflation target over time regardless of being in or out of EU. Carney reiterated that it is not the BOE remit to provide a comprehensive analysis. Not forming a view on the economic implications of leaving the EU.

Bank of England’s Carney, while addressing questions from Treasury Select Committee, said Pound could fall and lead to rise in inflation if Britons vote in favor of Brexit.

(Market News Provided by FXstreet)

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Research Team at Deutsche Bank, notes that the oil markets continued their strong surge of late yesterday.

Key Quotes

“WTI and Brent rallied +5.51% and +5.48% respectively with the former closing back in on $38/bbl and the latter ending the day back above $40/bbl for first time since December 9th.

Sentiment was boosted after the news of another drop in the number of operating rigs last month while expectations continue to build ahead of a potential meeting between OPEC and non-OPEC producers later this month. In fact, the latest move has now seen WTI move into positive YTD territory (+2.21%) for the first time this year with Brent (+9.55%) already well through that level.”

Research Team at Deutsche Bank, notes that the oil markets continued their strong surge of late yesterday.

(Market News Provided by FXstreet)

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The rally of the Aussie dollar could extend towards the 0.7535 area, suggested the research team at UOB Group.

Key Quotes

AUD edged above the 0.7480 target with a high of 0.7486”.

“While short-term conditions are severely overstretched, the outlook in the coming days still appears to be bullish and from here, the next objective is at the rather major level of 0.7535”.

“Stop-loss is adjusted higher to 0.7320 from 0.7280 even though 0.7365 is already a strong support”.

The rally of the Aussie dollar could extend towards the 0.7535 area, suggested the research team at UOB Group…

(Market News Provided by FXstreet)

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Teunis Brosens, Research Analyst at ING, suggests that today’s details on Eurozone GDP in the fourth quarter, albeit long gone, show some encouraging signs about the Eurozone recovery.

Key Quotes

“In particular, investment was the main growth engine, jumping 1.3%QoQ and taking over the baton from consumption. We have long been waiting for a revival of investment, and it finally appears to be happening. Year-on-year investment growth even rose to 3.4%YoY, the highest growth rate since March 2011. This shows that amidst all the gloom and doom emanating from falling confidence indicators in the Eurozone, it is easy to forget that the hard data has so far not been all that bad.

Household consumption on the other hand decelerated to 0.2%QoQ (1.5%YoY). We think that at least some of the fourth quarter weakness is explained by the mild winter weather, causing lower energy consumption and even denting retail sales (fewer fluffy winter coats). Net exports, having been the main driver of growth between 2011 and 2013, has now become a drag on growth, subtracting 0.6% from the YoY GDP growth rate. The Eurozone is clearly not immune to the slowdown in emerging markets.

With further weakness in the external environment ahead, it is very encouraging to see domestic demand proving resilient – at least, in the fourth quarter. Survey indicators notwithstanding, the few hard data we have for 2016Q1 do not show a marked deceleration. That said, with confidence indicators pointing south, core inflation weakened to 0.7%YoY and a downward revision to ECB inflation forecasts on the cards, the ECB will on Thursday most likely judge it has sufficient reason to act, presenting a bittersweet cocktail of deposit rate cuts, forward guidance and policy extensions and expansions.”

Teunis Brosens, Research Analyst at ING, suggests that today’s details on Eurozone GDP in the fourth quarter, albeit long gone, show some encouraging signs about the Eurozone recovery.

(Market News Provided by FXstreet)

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Japan’s Ministry of Finance released its current account data for Japan late Monday evening. Japan’s current account surplus fell to ¥520.8 billion in January from ¥960.7 billion in December, missing expectations for a surplus of ¥719.0 billion.

The goods trade surplus turned into a deficit of ¥411.0 billion in January, down from a surplus of ¥188.7 billion in December.

Exports dropped at an annual rate of 15.4% in January, while imports plunged 19.8%.

The service balance deficit was ¥226.7 billion in January.

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