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China Growth At Decade Highs, Hang Seng Surges

Overnight data from China confirmed the re-opening narrative is alive and well, with Chinese PMI’s registering the largest expansion in over a decade, Chinese equities surged with the growth-sensitive HangSeng in the green by almost 5%. The robust data out of China was countered by less favorable data out of Australia with soggy growth and CPI releases weighing on the ASX200. The upbeat Asian session has seen US equity futures reverse the final day of February’s declines, with European bourses also set to open the new month on a positive footing.

Bank of England consumer finance data for January will reveal the extent of the slowdown in the UK housing landscape. From the highs of August, mortgage approvals have taken a 50% haircut into December and markets expect further declines in January. Data for other consumer credit will show whether households are relying on credit to manage the cost-of-living inflation. Bank of England Governor Bailey speaks this morning, his remarks will be parsed for any indication of pushback against rising interest rate expectations. Markets are now pricing a further 75 basis points of interest rate rises despite the subtle suggestions at the BoE’s last policy update that rates may have reached their terminal rate for this cycle.

In today’s European session markets await February manufacturing PMI data in the UK and the Eurozone, these releases are a second look, although there will be fresh information on some constituent Eurozone economies. The first estimates for both remained anchored below the pivotal 50 level signaling contraction but the output indices finally surfaced above 50 indicating nascent signs that activity in the sector may have bottomed out. German February CPI data will give some clues on the likely level for tomorrow’s harmonized inflation rate for the Euro Area as a whole. Data yesterday for Spain and France both showed renewed increases in annual inflation rates in relation to January as rises in other prices offset falls in energy prices. However, market watchers expect German inflation to have retreated last month and that remains the favored outcome for the Euro Area print as well. 

Stateside in the US January economic data generally surprised on the upside leading to a rapid repricing in terminal rate expectation for US rates. The debate amongst market watchers is the extent to which this bump in activity data was due to milder-than-usual weather and so February releases are expected to give a cleaner read on the underlying nature of activity in the US. Today’s ISM manufacturing metrics and its services counterpart on Friday will be among the first of these February readings and so they are likely to be parsed particularly closely by investors, with consensus coalescing around a continued sub 50 contractionary prints.
 

FX Options Expiration New York Cut

• EUR/USD: 1.0600 (EU1.46B), 1.0510 (EU1.15B), 1.0725 (EU913.2M)
• USD/JPY: 113.30 ($1.91B), 122.40 ($900M), 104.20 ($900M)
• USD/CNY: 7.2500 ($2.02B), 6.9000 ($637.5M), 7.1800 ($600M)
• AUD/USD: 0.6776 (AUD654.7M), 0.6790 (AUD594.9M), 0.6735 (AUD457.7M)
• GBP/USD: 1.2000 (GBP482M)
• USD/CAD: 1.3750 ($800M), 1.3295 ($580M), 1.3580 ($499.7M)
• NZD/USD: 0.6250 (NZD1.17B), 0.6330 (NZD695.5M), 0.6165 (NZD640M)
• EUR/GBP: 0.8850 (EU1.19B), 0.8900 (EU414M), 0.9100 (EU307.7M)
• USD/MXN: 18.40 ($926.9M)
   

Overnight News of Note

• Asian Stocks Jump As Strong China Data Revives Reopening Optimism
• China Factory Activity Surges To Decade High, Boosting Recovery
• Asia’s Manufacturing Enjoys Gradual Recovery On Chinese Demand
• Australian Economy Slows As Interest Rate Hikes Begin To Bite
• ANZ: Australia Data Miss Fuels Bets On Earlier RBA Pause
• Korea’s Export Slump Deepens On Drag From Global Slowdown, Chips
• BoJ's Nakagawa: Must Maintain Ultra-Easy Policy For Time Being
• Two Fed Bank Boards Sought No Change To Rates Ahead Of Feb Meeting
• Inflation In UK Shops Hits Record High With Little Relief Ahead
• JP Morgan Becomes First Bank To Predict UK Will Avoid Recession
• Australian, NZ Dollars Reverse Losses Wednesday On Upbeat China PMIs
• Hong Kong Dollar Doldrums Renew Doubts Over U.S. Peg-Nikkei
• Bitcoin Traders Set Sights On $30,000 Even As Momentum Wanes
• Bond Traders Downgrade 2023 Fed Rate-Cut Odds To A Coin Toss
• Bond Binge Pushes US Corporate Debt Sales To Record Start
• Oil Prices Rise As China Factory Bounce Boosts Demand Outlook
• Russian Diesel Stuck At Sea As Mild Temps Fend Off Energy Crisis
• HP Misses First-Quarter Revenue Estimates As PC Market Recovery Eludes
• Novavax Says Substantial Doubt On Continuing As Going Concern

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

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4020

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

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EURUSD Bias: Intraday Bullish Above Bearish below 1.0680

• Primary resistance is 1.0805
• Primary objective is 1.0430
• Above 1.0860 opens 1.09
• 20 Day VWAP bearish, 5 Day VWAP bullish

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GBPUSD Bias: Intraday Bullish Above Bearish below 1.2150

• 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 DayVWAP 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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