Market Roundup
•US Employment Wages (QoQ) (Q4) 1.00%, 1.30% previous
•US Employment Cost Index (QoQ) (Q4) 1.00%,1.1% forecast,1.2% previous
•US Employment Benefits (QoQ) (Q4) 0.80%,1.00% previous
•Canada Nov GDP (MoM) 0.1%, 0.1% forecast,0.1% previous
• Canada GDP (YoY) 2.80%,3.50% forecast,3.10% previous
•US Redbook (YoY) 4.9%,4.6% previous
•US Nov House Price Index (MoM) -0.1%, -0.4% forecast,0.0% previous
•US Nov House Price Index 392.3, 392.7 previous
•US Nov S&P/CS HPI Composite - 20 n.s.a. (YoY) 6.8%, 6.8% forecast,8.6% previous
•US Nov S&P/CS HPI Composite - 20 s.a. (MoM) -0.5%, -0.6% forecast,-0.5% previous
•US Nov House Price Index (YoY) 8.2%,9.8% previous
•US Nov S&P/CS HPI Composite - 20 n.s.a. (MoM) -0.8%, -0.8% previous
•US Jan Chicago PMI 44.3, 45.1 forecast,44.9 previous
•US Jan CB Consumer Confidence 107.1,109.0 forecast,108.3 previous
•US Jan Dallas Fed Services Revenues 4.9, -0.6 previous
•US Jan Texas Services Sector Outlook -15.0,-19.8 previous
Looking Ahead - Economic data (GMT)
• 01:45 China Jan Caixin Manufacturing PMI 49.5 forecast,49.0 previous
•05:30 Australia Commodity Prices (YoY) 15.6% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro initially declined on Tuesday but recovered ground after data showed U.S. labor costs increased less than expected in the fourth quarter. The Employment Cost Index, the broadest measure of labor costs, rose 1.0% last quarter. That was the smallest advance since the fourth quarter of 2021 and followed a 1.2% gain in the July-September period. Other data on Tuesday also showed that house price growth slowed considerably in November, with a 9.2% increase in the month. The euro gained 0.21% on the day to $1.0867, after earlier falling to $1.0802.Immediate resistance can be seen at 1.0867(5DMA), an upside break can trigger rise towards 1.0940 (23.6%fib).On the downside, immediate support is seen at 1.0809(Daily low), a break below could take the pair towards 1.0773(38.2%fib).
GBP/USD: Sterling declined on Tuesday as investors awaited a slew of central bank decisions this week. Investors have their eyes on the Bank of England, first of the major central banks to turn hawkish, which is expected to deliver its 10th rate hike since December 2021 on Thursday. Traders have priced in a 50 bps rate hike, followed by another 25 bps in March before the BoE pauses. The Fed's decision is also scheduled at 1900 GMT on Wednesday, followed by a press conference from Fed Chair Jerome Powell. The U.S. central bank is widely expected to increase rates by 25 basis points. Immediate resistance can be seen at 1.2435(23.6%fib), an upside break can trigger rise towards 1.2531(Higher BB).On the downside, immediate support is seen at 1.2242(20DMA), a break below could take the pair towards 1.2186 (38.2%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Tuesday, adding to its gains since the start of the year, as investors cheered U.S. data showing labor costs increasing at a slower pace. U.S. labor costs increased at their slowest pace in a year in the fourth quarter as wage growth slowed, giving the Federal Reserve, which is due to make an interest rate decision on Wednesday, a boost in its fight against inflation.The loonie was trading 0.6% higher at 1.33 to the greenback, or 75.19 U.S. cents, at near its strongest level in more than two months, which it touched on Monday at 1.3297. Immediate resistance can be seen at 1.3325 (5DMA), an upside break can trigger rise towards 1.3425 (38.2%fib).On the downside, immediate support is seen at 1.3290(23.6%fib), a break below could take the pair towards 1.3265 (Lower BB).
USD/JPY: The dollar edged dipped against yen on Tuesday as investors assessed economic data ahead of a run of central bank policy announcements. U.S. labor costs increased at their slowest pace in a year in the fourth quarter as wage growth slowed, Labor Department data showed. The U.S. central bank on Wednesday is expected to hike the Fed funds rate by 25 basis points, following a 2022 in which the Fed aggressively boosted rates to control soaring inflation.The yen was up 0.1% at 130.34 per dollar and was set for its third monthly gain, with markets anticipating a shift in Japanese monetary policy. Strong resistance can be seen at 130.67(20DMA), an upside break can trigger rise towards 131.68 (38.2%fib).On the downside, immediate support is seen at 129.42 (23.6%fib), a break below could take the pair towards 127.28 (Lower BB).
Equities Recap
European stocks fell on Tuesday as investors geared up for a fresh round of interest rate hikes from top central banks, but the index still recorded its biggest January percentage gain since 2015..
UK's benchmark FTSE 100 closed up by 1.09 percent, Germany's Dax ended down by 0.80 percent, France’s CAC finished the day down by 0.78percent.
Major U.S. stock indexes closed over 1% higher on Tuesday as labor cost data encouraged investors about the Federal Reserve's aggressive approach to taming inflation a day ahead of the central bank's critical policy decision.
Dow Jones closed down by 2.79% percent, S&P 500 closed by 3.88% percent, Nasdaq settled down by 4.68% percent.
Treasuries Recap
Benchmark U.S. 10-year notes were down 3.5 basis points to 3.516% in the wake of the data, after hitting a two-week high of 3.574% on Monday.
Commodities Recap
Gold prices on Tuesday were on track for their third straight monthly gain, helped by an overall weaker dollar and expectations around slower rate hikes from the U.S. Federal Reserve.
Spot gold was near its session-highs, up 0.3% to $1,928.81 per ounce by 1:40 p.m. ET (1840 GMT). Bullion has gained 5.7% in January.U.S. gold futures settled up 0.3% to $1,945.3.
Oil prices closed steady on Tuesday after recovering from a near three-week low, drawing support from a weakening dollar and on data showing that demand for U.S. crude and petroleum products rose in November.
The more active second-month Brent contract settled at $85.46 a barrel, up 96 cents or 1%, while the U.S. West Texas Intermediate crude futures settled at $78.87 a barrel, up 97 cents or 1.3%.
