Headlines:
- Tentative mood awaiting Powell
- AUD/USD bounces on RBA but still faces Powell hurdle
- Fed's Kashkari: Nobody should overreact to one report
- Fed's Kashkari: If financial conditions are easier, we would have to do more on rates
- ECB's Villeroy: We are not very far from the peak of inflation
- Germany December industrial production -3.1% vs -0.7% m/m expected
- France December trade balance -€14.9 billion vs -€13.8 billion prior
- UK January Halifax house prices 0.0% vs -1.5% m/m prior
- Switzerland January seasonally adjusted unemployment rate 1.9% vs 1.9% expected
Markets:
- AUD leads, EUR and GBP lag on the day
- European equities slightly higher; S&P 500 futures up 0.1%
- US 10-year yields flat at 3.632%
- Gold up 0.2% to $1,871.78
- WTI crude up 1.6% to $75.27
- Bitcoin up 0.3% to $22,984
It was a bit of a slower session as markets are feeling more pensive awaiting remarks from Fed chair Powell later in the day.
The dollar was lightly lower in Asia trading before finding steadier footing early on in Europe but is now trading more mixed across the board. The euro and pound are slight laggards against the greenback, with Fed policymaker Kashkari helping the dollar as he reaffirmed that he is unfazed by the hot US jobs report from Friday.
The yen is a modest gainer as USD/JPY loses a bit of altitude, dropping just under 132.00 before sticking around there now. Meanwhile, the commodity currencies are also slightly higher with the aussie benefiting from a more hawkish RBA earlier in the day. AUD/USD may have erased some of its post-RBA gains but is still up 0.6% to 0.6925 currently.
Equities and bonds aren't doing much as the mood remains more tentative, with all eyes on Powell now.
