Article Highlights

  • Trump to ease stance on trade negotiations with Canada?
  • Canadian PM Trudeau and Trump commit to energy cooperation
  • IMF head Lagarde: No special deals for Greece in financial aid
  • OPEC Sec Gen Barkindo: Members showing high level of compliance in output deal
  • New Zealand food price index up by 2.8% in January
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No data, no problem? Currency-specific headlines sparked plenty of movement in the forex charts, with traders showing more love for the dollar and yen.

Major Events:

Trump’s “wonderful” meeting with Trudeau – Based on his tweet, the U.S. President had a “wonderful meeting with Canadian PM Trudeau and a group of leading CEOs and businesswomen from Canada and the United States.” This sentiment was underscored by their joint statement, which confirmed that both nations will work towards closer economic and security ties.

“We affirm the importance of building on this existing strong foundation for trade and investment and further deepening our relationship, with the common goal of strengthening the middle class,” the statement indicated. The leaders also agreed to increase efficiency across the border, commit to energy cooperation, and continue dialogue on regulations that are business-friendly but don’t compromise health, safety, and the environment.

During the presser, Trump and Trudeau were all smiles as they reiterated that the U.S. and Canada will remain BFFs in terms of trade and economic prosperity. Trudeau admitted that they won’t always agree on everything while Trump acknowledged that America is truly fortunate to have a neighbor like Canada. The Donald also appeared to ease on his hardline stance on border tax reform, citing that their arrangement with Canada is different from “unfair trade” in Mexico.

Greek debt troubles back in the spotlight – It looks like the IMF ain’t willing to give Greece the easy way out, as Chief Christine Lagarde reiterated that they won’t be cutting any special deals for the debt-ridden country. Keep in mind that Greece is already at its third bailout since 2010 and that the future of this financial aid plan rests on the IMF’s assessment of its progress on economic reform.

The European Commission has projected a strong pickup in GDP growth of 2.7% this year and 3.1% next year, but Greece’s central bank head Yannis Stournaras said that this could be in jeopardy without any aid from the IMF. “We have been asked to help, but can only help at terms and conditions that are even-handed. In other words, we cannot cut a special sweet deal for a particular country because it is that country,” Lagarde told Reuters in an interview.

Euro zone finance ministers are scheduled to have a huddle on February 20 to discuss Greece’s next bailout steps, and Greek officials are hoping to reach an agreement with the bloc’s ruling elite. If so, Greece can unlock the next tranche of funds worth 86 billion EUR that could help them meet their debt obligation of 7.2 billion EUR due in a few months.

Positive OPEC updates – So far so good on the OPEC output deal, as Secretary General Mohammed Barkindo reported that preliminary numbers showed a high level of compliance among members of the cartel. With that, he expressed confidence that the supply cut could bring stockpiles down to the 5-year industry average and put more upside pressure on crude oil prices down the line. For now, he says that it’s still premature to gauge if the oil mafia will extend its output deal past June.

Major Market Movers:

EUR – The shared currency chalked up sharp losses to the safe-haven currencies but managed to hold steady against most of the comdolls.

EUR/USD tanked from 1.0641 to a low of 1.0590 before consolidating, EUR/JPY fell from the 121.00 area to a low of 120.38, EUR/GBP slid from .8500 to .8460, and EUR/AUD is holding steady around 1.3850.

USD & JPY  A bit of risk aversion was still evident in the forex arena, as the lower-yielding dollar and yen racked up gains.

USD/JPY is cruising just below 114.00, AUD/JPY is down from 87.30 to 86.86, AUD/USD fell from .7675 to a low of .7637, NZD/JPY dropped from 82.00 to a low of 81.49, and NZD/USD tumbled below the .7200 mark.

Watch Out For:

  • 12:30 am GMT: Australia NAB business confidence
  • 1:30 am GMT: Chinese CPI y/y (2.4% expected, 2.1% previous)
  • 1:30 am GMT: Chinese PPI y/y (6.6% expected, 5.5% previous)
  • 4:30 am GMT: Japanese revised industrial production

See also:

London Session Recap

Asian Session Recap

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