20140210

Good morning,

Last week was busy on the macro side with rate meetings in the BoE, ECB and RBA the US NFP as the main events. From the UK, Europe and Australia, there were no significants changes, although Draghi's comments triggered optimism in the Euro Zone with both stocks and the EUR on the bid. From the US, the NFP on Friday came out lower than expected, which were taken as positive from a risk point of view. The figure came out at 113K against 185k expected, but although it would be natural for the market to go into a risk-averse mode, the recent Fed Policy to taper $10bn a month will be challenged now, as a foundation for the tapering is that the economy is improving. When taking a quick glance over recent figures from the US, we can conclude that there is a gradual improvement, but the environment is very fragile.

EUR/USD printed a low last week of 1.3475 and following strong bids, the pair is currently testing the 50-day SMA and trend resistance from the Dec 2013 top at 1.3640, with next resistance just below the 1.37 figure.

Stocks finished theweek in positive territory and the optimism has spread to the Asian markets this morning with the Nikkei up 1.8% and the ASX up 1.1%. The Hang Seng is down 0.3% following somewhat hawkish comments from the PBOC on interest rates.

Today, the calendar is not that heavy and we do not expect significant volatility, although the Canadian Housing Starts for January could confirm if the BoC is correct in being dovish, justifying the recent sell-off in the CAD. The figure is expected to come out at 182.k vs. 189.7k prior.

Have a nice day.