Market Roundup
• Cheers, jeers on border as Trump pushes wall in State of Union
• "Special place in hell" for Brexiteers, says EU's Tusk
• U.S.'s Mnuchin to visit China next week for trade talks -CNBC interview
• Uncertainty over U.S. trade policies hitting Canada -Bank of Canada
• US Nov International Trade $, -49.3 bln, -54.0 bln forecast, -55.5 bln previous, -55.7 bln revised
• US MBA Mortgage Applications, -2.5%, -3.0% previous
• US Mortgage Market Index, 378.9, 388.7 previous
• CA Jan Ivey PMI, 49.5, 48.2 previous
• CA Jan Ivey PMI SA, 54.7, 56.0 forecast, 59.7 previous
• CA Dec Building Permits M/M, 6.0%, -1.0% forecast, 2.6% previous, 2.1% revised
Looking Ahead - Economic Data (GMT)
• 6 Feb 21:30 Australia Jan AIG Construction Index, 42.6 previous
• 6 Feb 21:45 New Zealand Q4 HLFS Unemployment Rate, 4.1%, forecast, 3.9% previous
• 6 Feb 21:45 New Zealand Q4 HLFS Job Growth Q/Q, 0.3% forecast, 1.1% previous
• 6 Feb 21:45 New Zealand Q4 HLFS Participation Rate, 71.0% forecast, 71.1% previous
• 6 Feb 21:45 New Zealand Q4 Labour Cost Index - Q/Q, 0.6% forecast, 0.5% previous
• 6 Feb 21:45 New Zealand Q4 Labour Cost Index - Y/Y, 2.0% forecast, 1.9% previous
Looking Ahead - Events, Other Releases (GMT)
• 00:00 Fed's Jerome Powell delivers opening remarks and answers questions via livestream before an event in Washington D.C.
• 08:35 Bank of England's External member of the Financial Policy Committee Martin Taylor to give speech at Queen's University during a regional visit to Northern Ireland in Belfast.
• 12:00 Bank of England to release inflation report in London.
• 12:00 Bank of England to announce rate decision and to publish the minutes of meeting, after the rate decision in London.
• 12:15 ECB executive board member Yves Mersch to deliver a speech at the American European Community Association in Brussels, Belgium.
• 14:15 Dallas Fed's Robert Kaplan to participate in a moderated question-and-answer session before the University of Texas at Austin McCombs School of Business Outlook Series in Dallas.
Currency Summaries
EUR/USD: The euro slipped lower against the U.S. dollar on Wednesday, as stronger greenback and concerns about slowing growth in Germany adding to the pressure on euro. Weaker demand from abroad unexpectedly dragged down German industrial orders in December, data showed on Wednesday, in the latest sign that exporters in Europe's largest economy are being hurt by a slowing world economy and rising trade barriers.The dollar index, tracking the unit against six major currencies, rose 0.34 percent, with the euro down 0.4 percent to $1.1366. The index was on pace for a fifth day of gains. Immediate resistance can be seen at 1.1390 (38.2% retracement level), an upside break can trigger rise towards 1.1436 (100 DMA).On the downside, immediate support is seen at 1.1394 (50 DMA), a break below could take the pair towards 1.1305 (23.6% retracement level).
GBP/USD: The British pound edged lower against the dollar on Wednesday, as seller stepped in, after a report showed that UK cabinet ministers are discussing plans to delay Brexit by eight weeks. The pound slumped sharply on Tuesday after a survey suggested the British economy was flat-lining. That bucked a trend of the currency largely ignoring economic data and instead swinging wildly on news about the Brexit talks. In late US trade, sterling was down 0.09 percent at $1.2933, not far off a two-week low of $1.2923. It was down 0.3 percent against the euro at 87.9 pence. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.3015 (5 DMA), an upside break can trigger rise towards 1.3071 (11 DMA).On the downside, immediate support is seen at 1.2915 (50% retracement level), a break below could take the pair towards 1.2846 (61.8% retracement level).
USD/CAD: The Canadian dollar weakened to a 1-week low against the greenback on Wednesday, as Canadian dollar was weighed down by weaker oil prices and stronger greenback. The price of oil, one of Canada's main products, fell after a report showed a rise in U.S. crude inventories, contrary to expectations the market will tighten in 2019 as a result of OPEC-led supply cuts and U.S. sanctions on Venezuela. U.S. crude prices were down 0.7 percent at $53.29 a barrel. At (1930 GMT), the Canadian dollar was trading 0.6 percent lower at 1.3202 to the greenback. Immediate resistance can be seen at 1.3200 (100 DMA), an upside break can trigger rise towards 1.3237 (21 DMA).On the downside, immediate support is seen at 1.3170 (61.8% retracement level), a break below could take the pair towards 1.3100 (Psychological level).
USD/JPY: The U.S. dollar edged higher against the yen on Wednesday, as greenback strengthened after data that showed the U.S. trade deficit fell in November for the first time in six months as cheaper oil and higher domestic petroleum production helped to curb the country's import bill, leading economists to boost their economic growth estimates for the fourth quarter. Traders were focused on the near-term outlook for monetary policy as well as any sign of progress in trade negotiations between Washington and Beijing as a March 2 deadline for an increase in U.S. tariffs on Chinese goods nears.The dollar was 0.01 higher versus the Japanese yen at 109.94. Strong resistance can be seen at 110.70 (50 DMA), an upside break can trigger rise towards 111.00 (Psychological level).On the downside, immediate support is seen at 109.48 (9 DMA), a break below could take the pair towards 109.00 (61.8% retracement level).
Equities Recap
European shares inched up to touch 12-week highs on Wednesday, fuelled by strong gains in Italian banks and tech stocks, while Ubisoft sank following a revenue warning from U.S. videogame maker Electronic Arts.
UK's benchmark FTSE 100 closed down by 0.01 percent, the pan-European FTSEurofirst 300 ended the day up by 0.5 percent, Germany's Dax ended down by 0.4 percent, France’s CAC finished the day down by 0.2 percent.
U.S. stocks edged lower on Wednesday as videogame makers reported disappointing revenue forecasts and investors awaited developments on U.S.-China trade relations.
Dow Jones closed up by 4.98 percent, S&P 500 ended up 4.95 percent, Nasdaq finished the day up by 5.80 percent.
Treasuries Recap
U.S. Treasury yields turned flat on Wednesday, paring their earlier decline, following soft demand at a $27 billion auction of 10-year notes, the second of this week's quarterly government refunding to investors.
The yield on benchmark 10-year Treasury notes on the open market was 2.702 percent, down 0.2 basis points from late on Tuesday. It hit a session low of 2.673 percent earlier Wednesday.
Commodities Recap
Gold eased on Wednesday on a firmer dollar as investors waited for signs of resolution in U.S.-China trade talks, while keeping an eye on the Federal Reserve's monetary policy.
Spot gold traded 0.6 percent lower at $1,307 per ounce at (1914 GMT). U.S. gold futures settled down 0.4 percent at $1,313.40.
Oil prices rose about 1 percent on Wednesday, boosted by signs of strong U.S. demand for distillate products and tightening global crude supply, but gains were capped by a rising U.S. dollar and ongoing concerns about a global economic slowdown.
Brent crude futures gained 71 cents, or 1.15 percent, to settle at $62.69. The benchmark earlier fell to a session low of $61.05.
U.S. West Texas Intermediate (WTI) crude futures gained 35 cents, or 0.65 percent, to settle at $54.01 a barrel, up from a session low of $52.86.
