All three major indices are back in positive territory as the Nasdaq continues to lead the way with a 0.6% gain. Treasuries trade near their worst levels of the session with the FOMC interest rate decision just more than two hours away.
Current price: Y82.30
Current price: $1.5877
Support 1: $1.5840
Support 3: $1.5780
Support 3: $1.5680
Comments: Кate looks optimistic, holding near resistance at session high on $1.5900. Stronger level comes at $1.6020 (Tuesday's high), then - at $1.6240 (channel resistance line from Jan 07). Support is near hourly lows on $1.5840 with stronger level - at $1.5780 (channel line). Break under will target $1.5680.
Current price: $1.3702
Support 1: $1.3650
Support 2: $1.3570
Support 3: $1.3540
GBP/USD pushes into the area of reported resistance between $1.5890/00, with stops above this area. A break here to open a move on toward $1.5915/20 ahead of stronger area between $1.5950/60.
GBP/USD retreats from recovery highs of $1.5892 found support at $1.5845. Failure to back above $1.5881 (76.4% $1.5892/45) to push above this latter level seen keeping a slight bearish tone on the rate in the short term. A break below $1.5845 to expose stops, which if triggered to open a deeper move toward $1.5830 ahead of $1.5800. Offers remain in place above $1.5880, more between $1.5892/$1.5900 with stops placed on a break above.
U.S. stocks were poised for a higher open Wednesday, as investors await the Federal Reserve's latest pronouncement on the nation's economy, new home sales data and corporate results.
Optimism sparked from President Obama's State of the Union address late Tuesday may also help push stocks higher.
Economy: The Federal Reserve is expected to hold its benchmark interest rate near rock-bottom, when it concludes a two-day meeting Wednesday. A policy statement is expected around 19:15 GMT.
New home sales data will be released by the Commerce Department after the market opens. Economists expect sales rose to an annual rate of 300,000 in December from 290,000 in November, according to a consensus of estimates from Briefing.com.
Companies: Toyota (TM) announced it is recalling more than 1.5 million vehicles worldwide for issues that could result in fuel leakage. News of the recall sent shares of the automaker more than 1% lower in premarket trading.
Xerox (XRX, Fortune 500) logged earnings that fell from a year earlier, but were in line with expectations and announced its Chief Financial Officer Larry Zimmerman will retire next month. Shares of Xerox dropped more than 3% following the report.
Dow component United Technologies (UTX, Fortune 500) posted a quarterly profit that also slightly beat forecasts. Shares of the company edged about 1% lower.
Boeing (BA, Fortune 500)'s lower quarterly profit also met expectations, but its revenue and outlook disappointed - pushing shares of the company down 2.4%.
After the market close Wednesday, coffee chain Starbucks (SBUX, Fortune 500) is slated to report its quarterly earnings.
EUR/GBP extends corrective pullback, off earlier highs of stg0.8673. Rate probes support area between stg0.8620/15. A break below here to allow for a deeper move toward stg0.8600 ahead of stg0.8585/80.
EUR/USD probes under $1.3680, but move meets frsh demand. If rate can clear below $1.3670 ($1.3673 76.4% $1.3657/1.3723) to allow for a deeper move toward $1.3655/50.
Traders suggest French name joining the bid in the EUR/USD, along with semi-official buyer. This French name was conspicuous in the euro rally through $1.3650 Monday. rate currently holds around $1.3682, a bit higher earlier low near $1.3670.
EUR/GBP holding steady around stg0.8630, the rate having extended recent recovery highs to stg0.8672, meeting supply between stg0.8670/75. Cross corrected to stg0.8620. Demand remains in place to stg0.8620/15, a break to allow for a deeper move toward stg0.8585/80. Resistance remains in place to stg0.8675, a break to open a move toward stg0.8690/95. Earlier talk noted strong offers between stg0.8710/20.
The pound rose against the dollar after Bank of England minutes showed Martin Weale became the second policy maker to call for higher interest rates.
The euro extended gains, appreciating to more than $1.37 for the second day.
The pledge by Japan and China to buy European debt is encouraging Asian funds to follow suit as agencies start selling bonds to finance Ireland’s bailout.
A 5 billion euro ($6.84 billion) sale yesterday drew 44.5 billion euros in orders as the Japanese government snapped up more than 20 percent of the issue. Asian investors bought about 38 percent and government agencies 43 percent, according to two people familiar with the transaction. State institutions took 38.5 percent of the securities at a similar issue on Jan. 5, according to the European Commission in Brussels.
“I heard these issues will be hot,” said Masataka Horii, one of four managers in Tokyo of the $33.9 billion Kokusai Global Sovereign Open Fund, Asia’s largest bond fund. “Investors may see the new bonds as safe because central banks are buying.” He declined to say whether he would bid.
Kokusai, Daiwa SB Investments Ltd. and Fukoku Mutual Life Insurance Co. say they are interested in the AAA rated bonds sold to fund bailouts, even after investors sent the debt of Greece, Ireland, Portugal and Spain tumbling. ICBC Credit Suisse Asset Management Co. said it is interested in buying European government debt. German Chancellor Angela Merkel said her nation will do whatever is needed to save the 17-nation currency, while Europe’s economy is showing signs of improvement
The European Financial Stability Facility’s five-year 2.75 percent bonds were sold at 2.89 percent, or 6 basis points more than the benchmark swap rate, according to data compiled by Bloomberg. That’s down from the range of 8 basis points to 10 basis points where the bonds were initially marketed. German five-year debt with the same AAA rating has a yield spread of 44 basis points below the swap rate.
The much awaited FOMC decision is due at 1915GMT.
Offers: $1.3725/30, $1.3640, $1.3750, $1.3785
Bids: $1.3685/80, $1.3655/50, $1.3635/30, $1.3610/00
Offers: $0.9990/00, $0.9998, $1.0120
Bids: $0.9960/70, $0.9920/30, $0.9900 (stops), $0.9880, $0.9830
Offers: Y112.75, Y112.90, Y114.00
Bids: Y112.15, Y111.90/80, Y111.60, Y111.30, Y110.75
Offers: Y82.30, Y82.70/75, Y83.00, Y83.15/20
Bids: Y81.80/00, Y81.70 (stops), Y81.20/00
Slow rally extends to $86.70 ahead of resistance $87.33 as oil continues to track stocks. Break through $87.33 targets $88.50.
Edges higher after being repulsed from a move through Y82.00 to Y82.23, with some euro-yen demand assisting as euro-dollar took out the $1.3720 barrier. Cross rallied to Y112.74 before easing back with the euro-dollar to Y112.60. Offers lie ahead at Y82.30 and cross has tech resistance towards Y112.80/90.
Extends highs to the barrier at $1.3720. Stops noted above, though further offers seen at $1.3725/30. Further offers into $1.3740, with next barrier seen at $1.3750 and expected to draw sell interest ahead.
Spiked to $1.5874 from around $1.5825 as BOE MPC Minutes showed a 6-2-1 split, Weale joining Sentance in calling for a 25bp hike. Stops were triggered on the break of $1.5840, with rate quickly easing back to $1.5830. Analysts may judge this move to join Sentance as a react to the increase in UK inflation, with MPC not seeing yesterday's poor GDP ahead of release.
Offers now seen from recent recovery high at $1.5870 through to earlier high at $1.5880, with talk of stops now placed on a break of $1.5885. Support seen back at $1.5785/80 ahead of $1.5770 and $1.5750. Stops remain below $1.5740.
Monetary Policy Committee members Martin Weale and Andrew Sentance voted for a 25 basis point rate hike at the MPC's January meeting, while expectations were only Sentance to have backed a hike. Adam Posen again vote for an extra stg50 billion of QE.
European shares rose on Wednesday on improving sentiment about the global economic recovery after U.S. President Barack Obama proposed to cut corporate tax rates, while BG Group gained on a new oil find.
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