Themes

• General mood is “risk off”
• Fed’s George: Current accommodative policy out of synch with the economy
• Fed’s Bostic: 50bp hike not preferred for the March meeting

What’s Moving

It was a wide-ranging session dominated by Fed speakers overnight, but the upshot was that the Dollar ended slightly weaker on the day.

Early dealings saw a better-than-expected Chicago PMI (65.2 from 61.7 talk) which supported the Dollar out of the chute.

Then came the mixed Fed speakers. Fed’s George implied that the Fed was behind the curve, while Fed’s Bostic talked down the risk of a 50bp hike in March.

Thoughts

For today, expect consolidation of overnight ranges, with local volumes expected to be light amid the Chinese New Year holidays. Bias is to light USD short covering.

Local data today sees:

• Japanese Unemployment (E: 2.8%)
• Australian Retail Sales (E: -1.9%)
• Australian RBA meeting (E: No change to rates)

Pivot Points