Market Roundup
- UK PM May will seek "pragmatic" solution to Brexit deal in Brussels
- Nissan scraps plan to build new X-Trail model in Britain
- Trump says U.S. military intervention in Venezuela 'an option;' Russia objects
- Fed's Kashkari: Rate hike pause keeps U.S. growth on track
- Taiwan takes dig at China's lack of democracy in new year message
- Australia Dec Building Approvals, -8.4%, 1.8% f'cast, -9.1% prev, -9.8% rvsd
- China Jan Caixin Services PMI, 53.6, 53.9 prev
- New Zealand Dec Building Consents, 5.1%, -2.0% prev, -1.9% rvsd
Economic Data Ahead
- (0430 ET/0930 GMT) EZ Feb Sentix Index, -0.6 f'cast, -1.5 prev
- (0430 ET/0930 GMT) Great Britain Jan Markit/CIPS Cons PMI, 52.4 f'cast, 52.8 prev
- (0500 ET/1000 GMT) EZ Dec Producer Prices YY, 3.2% f'cast, 4.0% prev
Key Events Ahead
- No Significant Event Scheduled
FX Beat
DXY: The dollar index surged, extending gains for the third straight session, supported by stronger-than-expected U.S. jobs and factory data. The greenback against a basket of currencies trades 0.1 percent up at 95.74, having touched a low of 95.16 on Thursday, its lowest since December 10. FxWirePro's Hourly Dollar Strength Index stood at 103.60 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro edged lower, reversing some of its previous session gains, as the greenback was marginally higher after the benchmark 10-year U.S. Treasury yield rebounded from a 4-week low of 2.619 percent set last week. The European currency traded 0.1 percent down at 1.1445, having touched a high of 1.1514 on Thursday, its highest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at 2.78 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, EZ sentix investor confidence index, producer price index, and ECB member Mersch's speech ahead of the U.S.ISM-NY business conditions Index. Immediate resistance is located at 1.1474 (December 21 High), a break above targets 1.1540 (January 11 High). On the downside, support is seen at 1.1422 (Jan. 8 Low), a break below could drag it till 1.1370 (Jan. 17 Low).
USD/JPY: The dollar rallied to a 1-week peak after data released on Friday showed that the U.S. economy created 304,000 jobs in January, the highest in 11 months, trimming expectations the Fed would need to cut interest rates to support the economy later this year. The major was trading 0.2 percent up at 109.75, having hit a high of 109.98 on Thursday, its highest since January 25. FxWirePro's Hourly Yen Strength Index stood at -105.58 (Highly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S.ISM-NY business conditions Index. Immediate resistance is located at 110.47 (Dec. 31 High), a break above targets 111.19 (Dec. 24 High). On the downside, support is seen at 108.80 (Jan. 30 Low), a break below could take it lower at 108.37 (Jan. 16 Low).
GBP/USD: Sterling consolidated near a 1-1/2 week peak as British Prime Minister Theresa May aims to get parliament's approval for a revised deal on Feb. 13, but if she fails, the parliament will vote on the future course on Feb. 14. The major traded flat at 1.3075, having hit a high of 1.3217 last month; it’s highest since October 16. FxWirePro's Hourly Sterling Strength Index stood at -22.10 (Neutral) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3170, a break above could take it near 1.3257 (October 12 High). On the downside, support is seen at 1.3021 (November 6 Low), a break below targets 1.3000. Against the euro, the pound was trading flat at 87.51 pence, having hit a low of 87.93 on Friday, it’s lowest since Jan. 22.
AUD/USD: The Australian dollar declined to a near 1-week low after domestic data showed approvals to build new homes plunged 8.4 percent in December, confounding forecasts of a 1.8 percent gain that added more impetus to speculation about a cut in interest rates. The Aussie trades 0.2 percent down at 0.7234, having hit a high of 0.7295 on Thursday; it’s highest since December 5. FxWirePro's Hourly Aussie Strength Index stood at -5.66 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7197 (Dec. 12 Low), a break below targets 0.7115 (Jan. 22 Low). On the upside, resistance is located at 0.7300 (November 20 High), a break above could take it near 0.7327 (November 28 High).
NZD/USD: The New Zealand dollar edged lower after China's Caixin/Markit services purchasing managers' index (PMI) fell slightly to 53.6 in January from 53.9 in December. The Kiwi trades 0.05 percent down at 0.6890, having touched a high of 0.6941 on Friday, its highest level December 5. FxWirePro's Hourly Kiwi Strength Index was at -1.17 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6944 (Dec. 5 High), a break above could take it near 0.6998 (May 30 High). On the downside, support is seen at 0.6856 (Dec. 6 Low), a break below could drag it below 0.6799 (Jan. 15 Low).
Equities Recap
Asian shares consolidated near 4-month highs amid subdued trading activity with China's financial markets closed all week, while South Korean markets are shut until Thursday.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat
Tokyo's Nikkei rallied 0.5 percent to 20,883.77 points, Australia's S&P/ASX 200 index rose 0.5 percent to 5,891.20 points and Hong Kong’s Hang Seng traded 0.2 percent higher at 27,990.21 points.
Commodities Recap
Crude oil prices steadied after rising to a 2-week peak in the prior session on expectations of shrinking supply and signs that U.S.-China trade tensions could ease. International benchmark Brent crude was trading flat at $62.83 per barrel by 0452 GMT, having hit a high of $62.94 on Friday, its highest since January 21. U.S. West Texas Intermediate was trading 0.1 percent lower at $55.26 a barrel, after rising as high as $55.61 on Friday, its highest since the November 21.
Gold prices declined as the dollar held gains on upbeat U.S. jobs and factory data that prompted markets to reduce bets on a rate cut later this year. Spot gold was down 0.4 percent to $1,312.66 per ounce by 0508 GMT, having touched a high of $1,326.15 on Thursday, its highest level since April 26. U.S. gold futures dipped 0.2 percent at $1,320.1 an ounce
Treasuries Recap
The Japanese government bonds remained mixed towards close of Asian session Monday amid a silent trading session that witnessed data of little economic significance, ahead of the country’s long-term 10-year and super-long 3-year bond auctions, scheduled to be held back-to-back on February 6 and 7 by 23:50GMT and 03:35GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell a little over 1 basis point to 0.012 percent, the yield on the long-term 30-year edged tad higher to 0.606 percent while the yield on short-term 2-year plunged nearly 17 basis points to -0.168 percent.
The Australian government bonds traded modestly lower across the curve during Asian trading session tracking strong U.S. employment report. Investor sentiment was mildly positive on hopes for Sino-U.S. trade talks and amid mixed U.S. economic data, including a large lift in U.S. non-farm payrolls. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose over 1 basis point to 2.18 percent, the yield on the long-term 30-year bond climbed ½ basis point to 2.75 percent and the yield on short-term 2-year jumped 1-1/2 basis points to 1.84 percent.
