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Modest China Growth Target Puts A Dent In Metals & Commodities

Asian equities carried over the strength seen a the close of trading last week on Wall Street, once again the Nasdaq was the outperformer stateside, the positive impetuous in Asian markets waned somewhat as China reduced its economic growth target to circa 5%, this underwhelmed investors as the China re-opening narrative and growth expectations underpinned Asian markets last week, the reduced growth target is now set at the slowest pace in nearly two decades, the move has led to investors paring exposure to commodities and metals the go to proxies for the China reopening plays.

The key investor focus for the week ahead will be on the next US Non Farm payrolls report, Friday, this report will be particularly parsed following the upside surprise seen in payrolls data for January. A robust read in February will only add to inflationary pressures giving the Fed further cover to maintain their higher for longer rates mantra.  Ahead of Friday’s report, Fed Chair Jerome Powell will give his semi-annual report on monetary policy to Congress on Tuesday and the Senate on Wednesday, markets expect that the Fed Chair will likely stick to the well worn script regarding progress in the inflation battle but that Fed remains data dependent and as such it is too early to declare victory, whilst nascent signs of disinflation are developing, the broader inflation picture remains challenging and well above the 2% mandated target.

In the UK, construction PMI data for February is due this morning, in January the headline confirmed contraction printing under the pivotal 50 level, and investors are poised for another sub-50 print as the restrictive rates environment and cooling in the housing market continue to act as headwinds to sentiment. In the Eurozone, investors will eye the January retail sales report, market expectations for a January uptick follow the dire 2.7% decline in December and will likely mean that net sales activity will still be negative on the year. The German Sentix survey is believed to post a fifth successive monthly advance, (Bloomberg consensus: -5.5 vs -8.0 in December), which would deliver the best sentiment levels seen in over the past 12 months.

FX Options Expiration New York Cut

• EUR/USD: 1.0450 550m 1.0650 864m
• GBP/USD: 1.2060 2.7b 1.2150 300m
• USD/JPY: 135.00 547m 135.75 615m 137.00 1.5b
• AUD/USD: 0.6735 582m 0.6760 644m 0.6775 1.2b
   

Overnight News of Note

• Powell Set To Lay Groundwork For Higher Rates On Capitol Hill
• Dollar Subdued As Traders Eye Powell Testimony, Jobs Report
• Asia Stocks Edge Up, China Sets Lower Bar On Growth
• Fed’s Daly Says More Hikes Likely Needed To Dampen Inflation
• US Assesses Ukrainian Pilots Ahead Of Potential Training Effort
• Biden Closes In On Order To Restrict Investment In China Tech
• China Unveils Conservative Growth Target As Challenges Loom
• UBS Raises China’s Growth Forecast As Rebound Gathers Pace
• Japan Unions Ask Average 4.5% Wage Hike, Biggest Since 1990s
• Australia To Raise Key Rate Even As Economic Impulse Softens
• ECB’s Lagarde Reiterates Half-Point March Hike Seen Very Likely
• Surge In Rate Expectations Prompts Bank Of England Pushback
• Tesla Cuts Prices Of Model S, X In US For Second Time This Year
• Former Top Credit Suisse Shareholder Sells Entire Stake In Bank

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4030

• Primary support is 3885
• Primary objective is 4384
• Below 3880 opens 3835
• 20 Day VWAP bearish, 5 Day VWAP bullish

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EURUSD Bias: Intraday Bullish Above Bearish below 1.07

• Primary resistance is 1.0805
• Primary objective is 1.0430
• Above 1.0710 opens 1.09
• 20 Day VWAP bearish, 5 Day VWAP bullish

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GBPUSD Bias: Intraday Bullish Above Bearish below 1.2080

• Primary resistance  is 1.2265
• Primary objective 1.1785
• Above 1.2265 opens 1.2337
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bias: Intraday Bullish above Bearish Below 135.50

• Primary support  is 133.50
• Primary objective is 137.26
• Below 133.40 opens 132.80
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

AUDUSD Bias: Intraday Bullish Above Bearish below .6790

• Primary resistance is .7030
• Primary objective is .6635
• Above .7050 opens .7150
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 23800

• Primary support 2100
• Primary objective is 26700
• Below 20300 opens 19500
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

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