Market Roundup
- Oil rises amid optimism over China coronavirus
- China cuts U.S. import tariffs
- Gold eases on robust U.S. private payrolls
Economic Data Ahead
- (0200ET/0700 GMT) German factory orders n.s.a YoY
- (0200ET/0700 GMT) German factory orders s.a MoM
Key Events Ahead
- (0300 ET/0800 GMT) ECB President Lagarde's speech
- (0315 ET/0815 GMT) ECB's De Guindos speech
- (0500 ET/1000 GMT) European Commission releases Economic Growth Forecasts
FX Beat
DXY: The dollar index surged to a 2-month peak after the ADP National Employment Report showed that U.S. private-sector payrolls increased by 291,000 in January, while U.S. services sector activity picked up last month, with industries reporting increases in new orders. The greenback against a basket of currencies traded 0.05 percent up at 97.93, having touched a high of 98.33 earlier, its highest since Dec. 2.
EUR/USD: The euro eased, extending losses for the fourth straight session, as the greenback surged following a strong private-sector payrolls report for January, indicating the U.S. economy was on a stable growth path. The European currency traded down at 1.0997, having touched a low of 1.0994 earlier, its lowest since November 29. Investors’ attention will remain on a series of data from the Eurozone economies and ECB officials' speeches, ahead of the U.S. unemployment benefit claims and Fed Kaplan's speech. Immediate resistance is located at 1.1009, a break above targets 1.1025. On the downside, support is seen at 1.0981, a break below could drag it below 1.0957.
USD/JPY: The dollar rallied to a 2-week peak as risk appetite rose on reports of a possible treatment for the new coronavirus out of China and on strong U.S. private-sector payrolls report. China’s central bank injected substantial liquidity into the financial system to cushion the economic fallout from the virus. The ADP National Employment Report showed that U.S. private-sector payrolls increased by 291,000 in January, above expectations for an increase of 156,000 jobs. The major was trading 0.1 percent up at 109.95, having hit a high of 109.98 earlier, its highest since Jan. 22. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims and Fed Kaplan's speech. Immediate resistance is located at 110.10, a break above targets 110.29. On the downside, support is seen at 109.50, a break below could take it near at 109.26.
GBP/USD: Sterling slumped below the 1.3000 handle, weighed down by a stronger dollar following better-than-expected U.S. jobs data and concerns that Britain’s fiscal expansion may not be adequate as previously expected. The major traded 0.1 percent lower at 1.2982, having hit a low of 1.2941 on Tuesday, it’s lowest since Dec. 24. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3055 (21-DMA), a break above could take it near 1.3083. On the downside, support is seen at 1.2954, a break below targets 1.2922. Against the euro, the pound was trading 0.2 percent down at 84.71 pence, having hit a low of 85.37 on Tuesday, it’s lowest since Jan. 20.
AUD/USD: The Australian dollar rallied, extending gains for the fourth consecutive session, after data showed Australian exporters had another solid month in December, suggesting exports too added to GDP growth in the December quarter. The Aussie trades 0.2 percent up at 0.6743, having hit a high of 0.6774 on Wednesday, it’s highest since Jan. 29. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6716 (5-DMA), a break below targets 0.6700. On the upside, resistance is located at 0.6779, a break above could take it near 0.6800.
NZD/USD: The New Zealand dollar declined, extending losses from the prior session, as investors turned cautious ahead of Reserve Bank of New Zealand's monetary policy decision. The RBNZ is widely expected to keep the OCR unchanged at 1 percent next Wednesday, indicating that they expect to remain on the sidelines for the time being. The Kiwi trades 0.1 percent down at 0.6469, having touched a low of 0.6449 on Tuesday, its lowest level since Dec. 2. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6521 (10-DMA), a break above could take it near 0.6552. On the downside, support is seen at 0.6449, a break below could drag it below 0.6424.
Equities Recap
Asian shares surged, boosted by record closes in Wall Street benchmarks following encouraging U.S. economic data, and after China announced a cut in tariffs on some imported goods from the United States.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.7 percent.
Tokyo's Nikkei surged 2.4 percent to 23,873.59 points, Australia's S&P/ASX 200 index rose 1.1 percent to 7,049.20 points and South Korea's KOSPI rallied 2.8 percent to 2,226.84 points.
Shanghai composite index rose 1.4 percent to 2,856.99 points, while CSI 300 index traded 1.5 percent down at 3,885.50 points.
Hong Kong’s Hang Seng traded 2.5 percent higher at 27,458.69 points. Taiwan shares added 1.5 percent to 11,749.68 points
Commodities Recap
Crude oil prices surged, extending gains for the second straight session amid investor optimism over unconfirmed reports of possible advances in combating the coronavirus outbreak in China. International benchmark Brent crude was trading 1.3 percent higher at $56.37 per barrel by 0539 GMT, having hit a low of $53.68 on Tuesday, its lowest since Jan. 2019. U.S. West Texas Intermediate was trading 1.7 percent up at $52.01 a barrel, after falling as low as $49.42 on Tuesday, its lowest since Jan. 2019.
Gold prices eased following strong U.S. economic data, however, fears over a rapidly spreading coronavirus outbreak and its impact on the global economy limited downside. Spot gold was trading 0.2 percent down at $1,554.02 per ounce by 0544 GMT, having touched a low of $1547.55 on Wednesday, its lowest since Jan. 15. U.S. gold futures fell 0.2 percent to $1,559.30.
Treasuries Recap
The Australian bonds remained flat during Asian session after investors experienced a disappointment in the country’s retail sales for the month of December, released early today ahead of the Reserve Bank of Australia (RBA) Governor Philip Lowe’s speech, due later today by 22:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.097 percent, the yield on the long-term 30-year bond slipped 1 basis point to 1.702 percent and the yield on short-term 2-year also barely lost 1 basis point to trade at 0.789 percent.
