Market Roundup
•At least seven U.S. Fed officials due to speak this week
•Focus on Tuesday's U.S. consumer price index report
•Finnish Dec Current Account 0.00B, 2.20B previous
Looking Ahead Economic Data(GMT)
•13:55 French 12-Month BTF Auction 3.358% previous
•13:55 French 3-Month BTF Auction3.825% previous
•13:55 French 6-Month BTF Auction 3.739% previous
•16:00 US Consumer Inflation Expectations 3.00% previous
•16:00 US 6-Month Bill Auction 5.045% previous
•16:30 US 3-Month Bill Auction 5.235% previous
•19:00 US Jan Federal Budget Balance -39.3B forecast, -129.0B previous
Looking Ahead Events And Other Releases(GMT)
•13:15 ECB's Lane Speaks
•17:00 US FOMC Member Barkin Speaks
•18:00 US FOMC Member Kashkari Speaks
•18:00 UK BoE Gov Bailey Speaks
Currency Forecast
EUR/USD: The euro edged lower against dollar on Monday as investors awaited economic data for insights into the European Central Bank's rate outlook. This week is packed with economic data, including euro zone's fourth-quarter GDP growth, consumer price inflation from Spain and other regions, and ZEW survey to gauge industry expectations on the state of the region's economy. Across the Atlantic, investors will closely monitor the U.S. January CPI print on Tuesday for clues on the potential timing of a rate cut by the Federal Reserve. The euro was down a whisker at $1.0778, edging off a 10-day high touched in early trading . Immediate resistance can be seen at 1.0809(Daily high), an upside break can trigger rise towards 1.0857( 38.2%fib).On the downside, immediate support is seen at 1.0745(23.6%fib), a break below could take the pair towards 1.0732(Lower BB).
GBP/USD: The British pound dipped against dollar on Monday as investors awaited key U.S. CPI data as well as U.K inflation readings due this week. Traders wait for U.S. inflation data on Tuesday, as well as British inflation data and euro zone GDP on Wednesday. The US inflation data will impact market expectations of when the Federal Reserve may begin to ease policy rates. On Wednesday, a reading of British CPI inflation will similarly influence opinion on when the Bank of England will start to cut interest rates it is currently seen lagging the Fed and European Central Bank. Investors are currently pricing in a 17.5% chance of a rate cut in March and about 63% in May, according to CME's FedWatch tool. Immediate resistance can be seen at 1.2661(38.2%fib), an upside break can trigger rise towards 1.2722(Jan 30th high).On the downside, immediate support is seen at 1.2585(50%fib), a break below could take the pair towards 1.2566(Lower BB).
USD/CHF: The U.S. dollar strengthened against Swiss franc on Monday as investors focus turned to Tuesday's U.S. consumer price index report. The U.S. CPI data is due on Tuesday, followed by retail sales data on Thursday and producer price index (PPI) data on Friday, while markets also await comments from at least seven Fed officials this week.The poll for U.S. January CPI projects a 0.2% monthly rise, down from 0.3% in December, which could fuel expectations of a Fed rate cut in May. Core CPI is expected up 0.3%, unchanged from December. Several Fed policymakers, including Chairman Jerome Powell, last week said they would wait to cut rates until they were more confident that inflation would fall to 2%.Immediate resistance can be seen at 0.8733(23.6%fib), an upside break can trigger rise towards 0.8793(Higher BB).On the downside, immediate support is seen at 0.8730(Daily low), a break below could take the pair towards 0.8691(38.2%fib)
USD/JPY: The dollar declined against the yen on Monday in the lead-up to the U.S. inflation data. Data due Tuesday is expected to show that U.S. consumer prices rose by 0.2% month-on-month while the more important core measure increased 0.3%.The data comes after a robust U.S. jobs report and repeated pushback from Federal Reserve officials against imminent rate cuts. Both of these have prompted a significant cool-off in expectations around a rate cut at the March meeting.The U.S. Labor Department on Friday published the annual consumer price index revisions. The December headline inflation rate was revised down and there were slight upward revisions to both the November and October prints. Strong resistance can be seen at 149.59(23.6%fib),an upside break can trigger rise towards 149.77(Higher BB).On the downside, immediate support is seen 148.01 (Feb 5th low)a break below could take the pair towards 147.84(50%fib).
Equities Recap
European shares climbed on Monday, buoyed by the momentum on Wall Street that propelled the S&P 500 to close above 5,000 for the first time, while investors assessed earnings and economic data for insights into the European Central Bank's rate outlook.
At (GMT 13:08 ) UK's benchmark FTSE 100 was down by 0.41 percent, Germany's Dax was up by 0.31 percent, France’s CAC was up by 0.36 percent.
Commodities Recap
Gold edged lower on Monday due to an uptick in the dollar, although prices were stuck in a tight range as investors looked forward to U.S. inflation data and comments from Federal Reserve officials this week.
Spot gold was down 0.2% at $2,021.13 per ounce, oscillating in a $5 range, at 1219 GMT. U.S. gold futures also fell 0.2% to $2,035.60 per ounce.
Oil prices slipped on Monday as investors indulged in some profit-taking after both benchmarks ended last week about 6% higher on Middle East tensions and as refining outages squeezed refined products markets.
Brent crude futures were down 89 cents, or about 1.1%, at $81.30 a barrel, while U.S. West Texas Intermediate crude futures slipped 83 cents, also about 1.1%, to $76.01 a barrel at 1239 GMT.
