Market Roundup
•US Jan ADP Nonfarm Employment Change 174K, 49K, -123K previous
•US Jan Markit Composite PMI 58.7,58.0 previous
•US Jan Services PMI 58.3,57.5 previous
•Brazil Foreign Exchange Flows 2.797B,3.367B previous
• US Jan ISM Non-Manufacturing PMI 58.7, 56.8, 57.7 previous
• US Jan ISM Non-Manufacturing Business Activity 59.9,57.3, 60.5 previous
•US Jan ISM Non-Manufacturing Prices 64.2, 64.4 previous
•US Jan ISM Non-Manufacturing Employment 55.2,48.7 previous
•US Jan ISM Non-Manufacturing New Orders 61.8,58.6 previous
•US Crude Oil Inventories-0.994M, 0.446M forecast, -9.910M previous
Looking Ahead – Economic Data (GMT)
•23:50 Japan Foreign Bonds Buying 752.6B previous
•23:50 Japan Foreign Investments in Japanese Stocks 209.2B previous
•00:30 Australia Dec Imports (MoM) 10% previous
•00:30 Australia Dec Exports (MoM) 3% previous
•00:30 Australia Dec Trade Balance 5.022B previous
•00:30 Australia NAB Quarterly Business Confidence -10 previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Fxbeat
EUR/USD: The euro traded near a 2-month low against the dollar on Wednesday, as investors looked to a widening disparity between the strength of U.S. and European pandemic recoveries . The view was bolstered by moves in Washington toward fast-tracking more stimulus spending that contrasted with concerns about extended European lockdowns and expectations for a decline in euro zone growth this quarter. The euro was last down 0.06% against dollar at $1.2035. Immediate resistance can be seen at 1.2059 (38.2% fib), an upside break can trigger rise towards 1.2105 (11DMA).On the downside, immediate support is seen at 1.2000 (Psychological level), a break below could take the pair towards 1.1947 (50%fib).
GBP/USD: Sterling declined against dollar on Wednesday ahead of a Bank of England meeting this week, while Britain’s COVID-19 vaccine roll-out offered some support to the pound. Market participants are focusing on the Bank of England’s meeting on Thursday at which it is set to publish the findings of a consultation on what negative rates would mean for banks’ operations. Pound was down 0.2% at $1.3639 against a stronger dollar, after touching a one-week low against the greenback on Tuesday. Immediate resistance can be seen at 1.3680 (23.6% fib), an upside break can trigger rise towards 1.2375 (9 DMA).On the downside, immediate support is seen at 1.3620 (Daily low), a break below could take the pair towards 1.3590 (38.2%fib).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Wednesday, with the currency holding on to gains from the day before as oil prices rose to a one-year high and equity markets gained ground globally. The Canadian dollar was trading nearly unchanged at 1.2779 to the greenback, or 78.25 U.S. cents, after having rallied 0.5% on Tuesday. It traded in a range of 1.2763 to 1.2811. World shares rose, lifted by strong results from Alphabet Inc and upbeat earnings in Europe, while the price of oil, one of Canada's major exports, settled 1.7% higher at $55.69 a barrel. Immediate resistance can be seen at 1.2800 (38.2%fib), an upside break can trigger rise towards 1.2862 (50%fib).On the downside, immediate support is seen at 1.2766 (30 EMA), a break below could take the pair towards 1.2727(21 DMA).
USD/JPY: The dollar rose strongly against the Japanese yen on Wednesday as optimism about U.S. fiscal stimulus supported dollar. The dollar also benefited from a massive bout of short-covering, against the yen where hedge funds had racked up their biggest short bets against the greenback since October 2016. The dollar's advances have come despite a rally in equities and improving risk sentiment, defying the currency's historical inverse directional relationship with stocks.. Strong resistance can be seen at 105.15 (23.6%fib), an upside break can trigger rise towards 105.43 (Nov 12th high).On the downside, immediate support is seen at 104.86 (2nd Feb low), a break below could take the pair towards 104.66 (38.2%fib).
Equities Recap
European shares rose for the third session on Wednesday as focus remained on a busy day of earnings, with positive sentiment spilling over from Asian markets on hopes of a faster global economic recovery.
UK's benchmark FTSE 100 closed down by 0.14 percent, Germany's Dax ended up by 0.71 percent, France’s CAC finished the day down by 0.00 percent.
U.S. stocks rose in Wednesday afternoon trading and were set to register a third straight day of gains, with Alphabet Inc’s shares jumping following its strong quarterly results.
Dow Jones closed up by 0.12% percent, S&P 500 closed up by 0.10% percent, Nasdaq settled down by 0.02% percent.
Treasuries Recap
U.S. Treasury yields rose and the yield curve steepened on Wednesday amid stronger economic data and a push in Washington to pass a massive relief plan to aid the coronavirus-battered economy.
The benchmark 10-year yield was last up 3.2 basis points at 1.1391%. The 30-year yield in late trade climbed to levels last seen in March 2020. It was last up 4.9 basis point at 1.9267%.
Commodities Recap
Silver rose on Wednesday, helped by hopes global stimulus measures would prompt a pick-up in industrial demand, after a sharp decline from a near eight-year peak scaled with the help of a social media-inspired buying frenzy.
Spot silver rose 0.6% to $26.76 per ounce at 1:49 p.m. EST (1849 GMT). It fell more than 8% on Tuesday.
Oil prices rose almost 2% on Wednesday, with U.S. crude reaching its highest settlement level in a year after stockpiles fell to their lowest levels since March.
U.S. West Texas Intermediate (WTI) crude futures rose 93 cents, or 1.7%, to settle at $55.69 a barrel, the highest since Jan. 22, 2020, after touching a high of $56.33 earlier in the session.
Brent crude futures rose $1, or 1.7%, to settle at $58.46 a barrel, the highest since Feb. 21, 2020.
