Equities trade cautiously ahead of Yellen testimony

Tuesday, February 24, 2015

Asian benchmark equity indices pushed tentatively higher during overnight trading as investors held out for further details regarding Greece’s renegotiated deal with its creditors as well as Janet Yellen’s testimony to the Senate Banking Panel later on today. Mainland Chinese markets remained shut for the Lunar New Year celebrations as trading volumes remained choppy throughout the session as investors adopted a wait-and-see approach ahead of key macroeconomic events later today. The yen once again found firm support at the 50 day MA as it continued to consolidate sideways despite weakening against the dollar. After gaining ground against the greenback on Monday the yen traded back towards 119.20 as investors positioned themselves ahead of Yellen’s testimony later today.

Investors will be paying close attention to today’s conference call between eurozone finance ministers after Greece submitted its revised proposal yesterday. The euro dipped lower towards 1.1295 against the dollar yesterday as a cautious outlook was adopted by the majority of investors in the region. Trading activity in the single currency has been largely rangebound over the past couple of weeks as it trades sideways in consolidation. Comments from the Fed or further developments on the Greek outlook could see a potential breakout above 1.15 on any encouraging signs or see a breach of 1.13 on the downside if the outlook is less than optimistic, back towards multi-year lows.

Front month Brent futures slid lower on the tentative outlook with prices for the April contract losing over 2.3% yesterday, dropping back below $60/bbl. Investors had been encouraged in recent weeks to enter long positions in the global crude benchmark after prices consolidated under firm resistance at $50/bbl throughout the majority of January. Front month Brent prices rallied almost 30% since the start of February as progress in the eurozone was made and a ceasefire between Russia and Ukraine was reached, however, prices have been unable to hold onto territory above $60/bbl for any length of time. With prices seemingly resuming the downtrend after a brief correction major media outlets report that OPEC President Diezani Alison-Madueke has floated the idea of calling an emergency OPEC meeting if prices continue to decline.

JPY holds above support at the 50 day MA

JPY Curncy Japanese Yen Spot 2015 02 24 07 45 06

EUR slips lower but remains rangebound

CO1 Comdty Generic 1St CO Fut 2015 02 24 07 59 58

Front month Brent futures resume their slide lower

CO1 Comdty Generic 1St CO Fut 2015 02 24 07 59 58

Events for today

CN Market Holiday 

0700

DE

Q4

GDP

1000

EZ

Jan

CPI Core

1445

US

Feb

Markit Services PMI

1500

US

Feb

Consumer Confidence

1500

US

Feb

Richmond Fed Manufacturing Index

FN: 

Mar   Crude WTI (NYMEX) 

Topics: US Fed, Crude oil, Brent, EUR, JPY
More from: Kash Kamal