Market Roundup
- Italy Q4 2018 GDP prelim qq decrease to -0.2 % (forecast -0.1 %) vs previous -0.1 %
- Greece Nov 2018 retail sales yy increase to 3.2 % vs previous -4.1 % (revised from -4 %)
- Italy Q4 2018 GDP prelim yy decrease to 0.1 % (forecast 0.3 %) vs previous 0.6 % (revised from 0.7 %)
- Italy Q4 2018 GDP prelim qq increase to 0.2 % (forecast -0.1 %) vs previous -0.1 %
- Eurozone Dec 2018 unemployment rate stays flat at 7.9 % (forecast 7.9 %) vs previous 7.9 %
- Eurozone Q4 2018 GDP flash prelim yy decrease to 1.2 % (forecast 1.2 %) vs previous 1.6 %
- Eurozone Q4 2018 GDP flash prelim qq stays flat at 0.2 % (forecast 0.2 %) vs previous 0.2 %
- Italy Dec 2018 unemployment rate decrease to 10.3 % (forecast 10.6 %) vs previous 10.5 %
- Germany Jan 2019 unemployment total sa decrease to 2.263 person vs previous 2.265 person (revised from 2.261 person)
- Germany Jan 2019 unemployment total nsa increase to 2.406 person vs previous 2.21 person
- Germany Jan 2019 unemployment rate sa stays flat at 5 % (forecast 5 %) vs previous 5 %
- Germany Jan 2019 unemployment chg sa increase to -2 person (forecast -10 person) vs previous -14 person
- Switzerland Dec 2018 official reserves assets chf decrease to 776512.68 chf vs previous 795371.66 chf
- France Jan 2019 CPI prelim mm nsa increase to -0.5 %
- France Jan 2019 CPI (EU norm) prelim mm decrease to -0.6 % vs previous 0.1 %
- France Jan 2019 CPI prelim yy nsa decrease to 1.3 % vs previous 1.6 %
- France Jan 2019 CPI (eu norm) prelim yy decrease to 1.4 % (forecast 1.3 %) vs previous 1.9 %
- Germany Dec 2018 retail sales mm real decrease to -4.3 % (forecast -0.6 %)
- United Kingdom Jan 2019 nationwide house price yy decrease to 0.1 % vs previous 0.5 %
- United Kingdom Jan 2019 nationwide house price mm increase to 0.3 % (forecast 0.2 %) vs previous -0.7 %
Economic Data Ahead
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 16,000 to a seasonally adjusted 215,000 for the week ended Jan. 25, while continuing claims for the week ended Jan. 11 came in at 1.713 million.
- (0830 ET/1330 GMT) The U.S. Labor Department will release its employment cost index for the fourth quarter. The index is expected to remain steady at 0.8 percent.
- (0830 ET/1330 GMT) The Statistics Canada releases its Raw Material Price Index for the month of December. The index posted a decline of 11.7 percent in November.
- (0830 ET/1330 GMT) Statistics Canada will report its industrial producer prices for the month of December. The indicator rose 0.2 percent in the prior month.
- (0830 ET/1330 GMT) Statistics Canada is expected to report that gross domestic product decreased 0.1 percent in November, after rising 0.3 percent in the previous month.
- (0945 ET/1445 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions eased to 61.5 in January from 65.4 last month.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending January 25.
Key Events Ahead
- N/A U.S. President Donald Trump meets Chinese Vice Premier Liu He during his visit to Washington for high-level trade talks.
- (1100 ET/1600 GMT) Bundesbank's Jens Weidmann speaks about future of European Monetary Union - Frankfurt
- (1230 ET/1730 GMT) BoC's Carolyn A. Wilkins speaks on "How the labour market is changing and how this influences monetary policy" - Toronto
FX Beat
DXY: The dollar index plunged to a 3-week low, as dollar bull's sentiment weakened after the Federal Reserve pledged to be patient with further interest rate hikes. The greenback against a basket of currencies trades 0.1 percent down at 95.33, having touched a low of 95.16, its lowest since December 10. FxWirePro's Hourly Dollar Strength Index stood at -58.97 (Bearish) by 1000 GMT.
EUR/USD: The euro retreated from a near 3-week peak touched earlier in the session after data showed the euro zone economy stuck to its lowest pace of growth in four years in the final three months of 2018. Moreover, separate data showing German retail sales plummeted by 4.3 percent on the month in December, the fastest rate in 11 years further intensified the selling pressure around the major. The European currency traded 0.05 percent down at 1.1477, having touched a high of 1.1514 earlier, its highest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at -41.82 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1540 (January 11 High), a break above targets 1.1596 (January 10 High). On the downside, support is seen at 1.1458 (Jan. 11 Low), a break below could drag it till 1.1370 (Jan. 17 Low).
USD/JPY: The dollar slumped to a fresh 2-week trough, weighed down by concerns over U.S.-China trade dispute and Federal Reserve's dovish stance on further interest rate hikes. The major was trading 0.4 percent down at 108.60, having hit a low of 108.52, its lowest since January 16. FxWirePro's Hourly Yen Strength Index stood at 121.58 (Highly Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Challenger Job Cuts and unemployment benefit claims. Immediate resistance is located at 109.88 (Jan. 18 High), a break above targets 110.47 (Dec. 31 High). On the downside, support is seen at 108.37 (Jan. 16 Low), a break below could take it lower at 107.98 (Jan. 14 Low).
GBP/USD: Sterling rose, extending previous session gains, as Britain prepared to resume negotiations with the European Union over the Irish border arrangements after Brexit. The major traded 0.1 percent up at 1.3127, having hit a high of 1.3217 on Friday; it’s highest since October 16. FxWirePro's Hourly Sterling Strength Index stood at -138.77 (Highly Bearish) 1000 GMT. 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 0.1 percent down at 87.43 pence, having hit a low of 87.64 earlier, it’s lowest since Jan. 23.
USD/CHF: The Swiss franc rebounded from a near 2-month low hit in the prior session, as investors remained cautious ahead of high-level U.S.-China trade talks aimed at easing a months-long tariff war. The major trades 0.1 percent down at 0.9928, having touched a high of 0.9994 on Tuesday; it’s highest since December 5. FxWirePro's Hourly Swiss Franc Strength Index stood at -40.42 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9986 January 22 High) and any break above will take the pair to next level till 1.0008 (December 5 High). The near-term support is around 0.9889 (December 7 Low), and any close below that level will drag it till 0.9840 (December 27 Low).
Equities Recap
European shares surged, boosted by a rally in the oil stocks and on a dovish tone from the U.S. Federal Reserve, while sterling extended gains as investors shifted their focus on February Brexit vote.
The pan-European STOXX 600 index advanced 0.1 percent at 358.99 points, while the FTSEurofirst 300 index surged 0.1 percent to 1,409.26 points.
Britain's FTSE 100 trades 0.4 percent up at 6,972.13 points, while mid-cap FTSE 250 gained 0.1 to 18,842.68 points.
Germany's DAX rose 0.1 percent at 11,190.84 points; France's CAC 40 trades 0.3 percent higher at 4,988.12 points.
Commodities Recap
Crude oil prices surged, as lower-than-expected U.S. fuel stock rises and U.S. sanctions on Venezuelan output boosted investor confidence, however, U.S.-China trade tensions limited gains. International benchmark Brent crude was trading 0.3 percent up at $61.84 per barrel by 1051 GMT, having hit a low of $59.47 on Monday, its lowest since January 15. U.S. West Texas Intermediate was trading 0.1 percent lower at $54.12 a barrel, after falling as low as $51.31 on Monday, its lowest since the January 17.
Gold prices steadied near an 8-1/2-month high touched in the previous session and was poised for its fourth straight monthly gain, as the dollar weakened after the U.S. Federal Reserve paused its monetary tightening cycle. Spot gold was trading 0.2 percent higher at $1,322.27 per ounce by 1053 GMT, having touched a high of $1,323.25 on Wednesday, its highest level since May 11. U.S. gold futures were up 0.8 percent at $1,318.60 per ounce.
Treasuries Recap
The German bunds remained mixed after the country’s unemployment change for the month of January disappointed market sentiments, while Eurozone’s jobless rate remained unchanged during the month of December. The German 10-year bond yields, which move inversely to its price, fell nearly 1-1/2 basis points to 0.171 percent, the yield on 30-year note also lost 1-1/2 basis points to 0.765 percent and the yield on short-term 2-year hovered around -0.559 percent.
The Japanese government bonds gained during the Asian session, tracking a similar movement in the United States Treasuries after the Federal Reserve adopted a "patient" approach to further monetary policy decisions, hinting at a slower pace of rate hikes this year. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.001 percent, the yield on the long-term 30-year fell nearly 2 basis points to 0.644 percent and the yield on short-term 2-year plunged nearly 17 basis points to -0.167 percent.
The Australian government bonds gained across the curve during Asian trading session after the Federal Reserve signalled patience and flexible monetary policy going ahead. Markets now believe that the Fed has effectively abandoned its hiking bias but stopped short of inciting bearish expectations. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell over 1 basis point to 2.24 percent, the yield on the long-term 30-year bond remained steady around 2.77 percent and the yield on short-term 2-year slumped 2 basis points to 1.852 percent.
