Manufacturing conditions across New York City improved at a slower pace in February with the New York Fed’s Empire State Index slipping to 7.78. The reading was below the 9.95 level of January and expectations for a decline to 8.50 with the business 6-month outlook, a gauge on future levels of activity, falling to 25.58 from 48.35 to the lowest level seen since January 2013.

US homebuilder confidence softened in February with the NAHB housing market index slipping to 55. The reading was below the 57 level of January and expectations for an increase to 58 and was the lowest level seen since October. Prospective buyer foot traffic and sales both fell during the month, overriding no change in expectations.

German investor expectations continued to climb in February with the ZEW Institute index rising to 53.0. The reading, below expectations for an increase to 55.0 but ahead of the 48.4 level of January, was the highest level seen since February 2014. While the expectations measure missed it was a different story for current conditions with the index rising to 45.5 from 22.4 in January. The reading, ahead of the median market forecast for an increase to 30.0, was the steepest month-on-month gain since August 2010. Unsurprisingly the announcement of outright sovereign debt purchases from the ECB was enough to offset renewed concerns surrounding Greece and Ukraine over the month.

UK consumer prices fell by 0.9% in January, below expectations for a decline of 0.8%, with the annual increase slowing to 0.3%, the lowest level seen since records began in 1989. Mirroring the decline seen there producer prices also slid, falling 0.5% compared to expectations for a decline of 0.3%. The figure took the annual decline to 1.8%, also the steepest fall on record. Completing the hat-trick of softer inflation prints the separate ONS house price index recorded a gain of 9.8% in the year to December, below the 9.9% pace seen in November, with property price growth in London slowing to 13.3% from 15.3%.

Greece consumer prices fell 2.8% in the year to January, below the 2.6% decline of December and expectations for an improvement to -2.4%, with the reading the lowest level seen since November 2013. Using EU methodology prices slipped 2.8% with the reading lower than both the 2.5% decline of December and expectations for an acceleration to -2.7%.

The latest Global Dairy trade auction was conducted overnight with the index surging 10.1% following a 9.4% increase two weeks earlier. Unsurprisingly the NZDUSD liked the news with the pair adding 0.5% to .7540.


The Day Ahead (AEDT)

Chinese, South Korean and Hong Kong markets will be closed today for the Lunar New Year Holiday., Insurance Australia Group, Primary Healthcare, Seven West Media, Toll Holdings and Woodside Petroleum headline today’s domestic earnings calendar. Suncorp Group trades ex-dividend.

Australian stocks look set to rebound this morning with SPI futures pointing to a gain of 23pts on the open. If the pattern overnight is to be repeated locally look for financials, healthcare and energy to outperform today.

The AUDUSD has ground higher overnight with the pair touching a high of .7828 midway through the European session. With most of Asia off on holidays and no major data scheduled locally look for the Bank of Japan’s monetary policy decision this afternoon, something that will be influential on the JPY and hence the USD, to provide direction for the AUDUSD later in the session. Support starts at .7810, .7790 and below .7750, resistance at the overnight high, .7840 and again at .7880.

The Bank of Japan will announce their February monetary policy decision today. If there is no change in policy, something that is expected by the markets, the decision will likely be announced just before 1.30pm this afternoon.

The minutes of the US FOMC’s January policy meeting will be released at 6am tomorrow morning. Elsewhere markets will also receive housing starts, building permits, industrial production, producer price inflation and MBA mortgage market index from the States along with UK unemployment. On the policy front the Bank of England MPC will also release the minutes of their February policy meeting at 8.30pm this evening.


Market Map Feb 18 2015


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