New Zealand ANZ Consumer Confidence Index (Feb) 127.7 (Prev. 126.9). (Newswires)
New Zealand ANZ Consumer Confidence (Feb) M/M 0.6% (Prev. 4.2%)
New Zealand Building Permits (Jan) 0.2% (Prev. -9.6%)


ECB Sources stated an ECB policy shift is unlikely in March meeting, but there may be a discussion on easing bias being dropped. (Newswires)

UK PM May spokesperson said good progress has been made in reaching agreement on transition period, following May’s meeting with EU Council President Tusk. (Newswires)

EU’s Barnier said UK is closing the door on Brexit solutions and he suggests the only model left is a free trade agreement. Barnier added all other models available if the UK is willing to accept balance of rights and obligations. (Newswires)

UK Markit/CIPS Manufacturing PMI (Feb) 55.2 vs. Exp. 55.0 (Prev. 55.3). (Newswires)


After it emerged that the US will impose steel and aluminium tariffs on imports next week, the DXY began giving back some of the gains it had printed in the day (as high as 90.932). While EUR was magnetic to 1.22, after EU’s Juncker complained and suggested that the EU would take its own action in response, the single currency printed fresh highs; meanwhile, the CAD dropped from fresh YTD highs just beneath 1.2895, moving back towards the 1.2850 mark.

After US stocks tanked on protectionist fears, and the SPX tripped through its 100dma, there was a broad flight away from the USD (and the bid in Tsys), led by USDJPY moving lower, breaking the bottom-end of its overnight range (near 106.50), to find support around 106.20 – a level that was in focus in the early part of Feb.


Crude is still nursing losses incurred after this week’s bearish inventory data rounds-off the first negative month for oil prices since August 2017. The sour equity tone also weighed which saw crude drop towards to lows near USD 60/bbl for WTI before paring some of the losses post-settlement.


Fed Chair Powell said we are not currently seeing strong evidence for a decisive move higher in wages. Powell also said he expects more wage increases and gradual rate hikes to be appropriate, while he added that fiscal policy will likely put upward pressure on inflation this year. (Newswires)

Fed’s Dudley (Voter) is gaining confidence that rate hikes will be required and said that 4 rate hikes would be gradual. (Newswires)

US President Trump said steel and aluminium companies are treated unfairly and that he will rebuild their industries. Trump also announced that the US will institute steel & aluminium tariffs next week, in which reports stated would consist of 25% tariffs for steel and 10% for aluminium. (Newswires)

White House is said to be preparing to replace Trump National Security Adviser McMaster. (Newswires)

US ISM Manufacturing PMI (Feb) 60.8 vs. Exp. 58.7 (Prev. 59.1)
US Personal Income MM (Jan) 0.4% vs. Exp. 0.3% (Prev. 0.4%)
US Personal Consumption Real MM (Jan) -0.1% vs. Exp. -0.1% (Prev. 0.3%, Rev. 0.2%)
US Consumption, Adjusted MM (Jan) 0.2% vs. Exp. 0.2% (Prev. 0.4%)
US Construction Spending MM (Jan) 0.0% vs. Exp. 0.3% (Prev. 0.7%)
US Core PCE Price Index MM (Jan) 0.3% vs. Exp. 0.3% (Prev. 0.2%)
US Core PCE Price Index YY (Jan) 1.5% vs. Exp. 1.5% (Prev. 1.5%)


A combination of protectionism/trade war fears (Trump set to announce aluminium and steel tariffs next week) and in the background, the growing narrative that the US may see four hikes this year weighed on equities. The former was the key driver, and while steel names were firmer, companies in the industrial and autos sector bemoaned the likely production cost hikes (O&G names, as well as autos). The result was the EMINI tumbling through multiple technical levels to print lows around 2660, before consolidating around 2670. SPX -1.3%, DJI -1.7%, NDX -1.5%.

Yields continued to narrow across the curve, with most of the action in the belly, where yields were as much as 6bps lower. The narrowing the short end saw 2s yields back to the bottom of its recent range, a reprieve after printing new cyclical highs this week. The long-end underperformed. The Tplex was bid all day, but found fresh buying impetus amid risk-off inspired by protectionist news that the US would impose tariffs on steel and aluminium imports next week.