- I remain firmly in the camp that FED will not raise rates again this year, whilst also acknowledging that FED will not do a U-turn on their 'gradual' rate increase. Instead they will have to gently let the markets down. Overnight FED chair lady Yellen notes concerns of US growth following recent market turbulence but then defended the jobs market. As far as I am concerned this is merely another step in letting the markets down gently, and is eerily similar to 2015 where we spent the entire year talking up and delaying a rate rise.
- Industrial production provided yet more doom and gloom, seeing France, Italy and UK all contract on a monthly and annualised basis.
- Gold has stalled below the $1200 mark as it chooses between a continuation flag or a topping pattern. The fact it has remained elevated is a sign of strength to me, as for a long time it has failed to gather momentum and keep it before printing new lows. On a time and price basis, this the most bullish run since December 2013.
- Oil has managed to keep above 3-week lows printed on Tuesday, just.
- Reuters and Financial times provided opposing stories regarding Russia suggesting oil production cuts. Igor Sechin, head of Russia's state controlled oil company Rosneft, denied the suggestion with FT.
- USDJPY continued the decline to test (and see an intraday break below) the 113 handle.
- Global stocks remained relatively contained overnight, managing to stay above the prior day's lows in a similar fashion to oil.
TODAY IN ASIA:
- AUD consumer inflation expectations
- China M2 money supply and new loans
- Chinese New Year (bank holiday)
Nylon Handover: Yellen reduces rate expectations
As expected, Yellen defended the job market whils also lowering expectations of a rate rise soon, which is a theme I expect to persist this year.