FOMC released minutes of the January 25-26 meeting. The FOMC raised
its GDP forecast for 2011 for the 3.4-3.9% range vs. the prior
3.0-3.6% range; but the committee expressed 'disappointment' on jobs.
Additionally, most FOMC members said 'risk of further disinflation'
had declined. The slightly upbeat minutes gave a boost to risk
appetite resulting in advancing stock markets and weighing on the
dollar. EUR/USD went back above the 1.35 figure to current levels of
around 1.3560.
It was a busy day in terms of economic data with better than expected
U.S. housing data, a strong core PPI figure, and weak industrial
production. January housing starts came in higher than the anticipated
539K with a print of 596K (prior 520K) and building permits also
surprised to the upside slightly beating expectations of 559K with a
print of 562K although this was a decline from the previous 627K. The
January headline PPI showed a MoM change of +0.8% as expected while
the prior month's +1.1% was revised lower to +0.9%. Core PPI (ex food
& energy) was unexpectedly higher surging to +0.5% (cons. +0.2% and
prior +0.2%). This is the highest core PPI reading since late 2008.
Industrial production came in softer than the anticipated +0.5% with a
disappointing print of -0.1% (prior +1.2%), but this is likely a
result of severe weather.
U.S. equities climbed higher with the DJIA and the S&P 500 gaining by
about +0.49% and +0.61% respectively. Commodities were mixed with
gains in gold and oil while silver declined roughly -0.24%. The yellow
metal rose by nearly +0.11% and oil was higher by about +0.81% due to
tensions in the Middle East.
On the data front for the upcoming Asia/Pacific session are New
Zealand producer prices for Q4, January business NZ PMI and ANZ
consumer confidence surveys for Feb. NZ Finance Minister William
English is scheduled to speak and Japan will release its weekly
securities investment abroad data as well as the December final
coincident and leading index.
Source: ActionForex.Com
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