Market Roundup
- Eurozone Dec 2018 industrial production yy decrease to -4.2 % (forecast -3.2 %) vs previous -3 % (revised from -3.3 %)
- Eurozone Dec 2018 industrial production mm increase to -0.9 % (forecast -0.4 %) vs previous -1.7 %
- United Kingdom Jan 2019 CPI nsa decrease to 106.3 vs previous 107.14
- United Kingdom Jan 2019 PPI input prices yy nsa decrease to 2.9 % (forecast 3.8 %) vs previous 3.2 % (revised from 3.7 %)
- United Kingdom Jan 2019 RPI-X (retail prices) mm decrease to -0.9 % vs previous 0.4 %
- United Kingdom Jan 2019 RPI yy decrease to 2.5 % (forecast 2.6 %) vs previous 2.7 %
- United Kingdom Jan 2019 CPI yy decrease to 1.8 % (forecast 1.9 %) vs previous 2.1 %
- United Kingdom Jan 2019 core CPI yy stays flat at 1.9 % (forecast 1.9 %) vs previous 1.9 %
- United Kingdom Jan 2019 PPI output prices yy nsa decrease to 2.1 % (forecast 2.2 %) vs previous 2.4 % (revised from 2.5 %)
- United Kingdom Jan 2019 PPI core output mm nsa increase to 0.4 % (forecast 0.2 %) vs previous 0.1 % (revised from 0.2 %)
- United Kingdom Jan 2019 PPI core output yy nsa stays flat at 2.4 % (forecast 2.3 %) vs previous 2.4 % (revised from 2.5 %)
- United Kingdom Jan 2019 PPI input prices mm nsa increase to -0.1 % (forecast 0.3 %) vs previous -1.6 % (revised from -1 %)
- United Kingdom Jan 2019 RPI index decrease to 283 vs previous 285.6
- United Kingdom Jan 2019 RPIX yy decrease to 2.5 % vs previous 2.7 %
- United Kingdom Jan 2019 RPI mm decrease to -0.9 % (forecast -0.8 %) vs previous 0.4 %
- United Kingdom Jan 2019 CPI mm decrease to -0.8 % (forecast -0.7 %) vs previous 0.2 %
- United Kingdom Jan 2019 core CPI mm decrease to -0.8 % (forecast -0.8 %) vs previous 0.3 %
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. consumer price index likely increased 0.1 percent in January after recording a drop of 0.1 percent in December, while in the 12 months through January, the CPI is expected to have risen 1.5 percent. Excluding food and energy, the core CPI probably rose 0.2 percent, matching the gain in the previous month.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 8.
- (1400 ET/1900 GMT) The U.S. reports its monthly budget statement for the month of December. The government is likely to show a budget deficit narrowed to $11 billion from $205 billion in the previous month.
Key Events Ahead
- (0850 ET/1350 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic participates in discussion on economic outlook and monetary policy before European Financial Forum - Dublin
- (0850 ET/1350 GMT) Federal Reserve Bank of Cleveland President Loretta Mester speaks on "A View From the Federal Reserve" before "What's Next for Kentucky in the Global Economy" 2019 Economic Conference - Lexington
- (1200 ET/1700 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on economic outlook before Jewish Business Network Power Lunch - Philadelphia
FX Beat
DXY: The dollar index gained after U.S. President Donald Trump said that he could let the March 1 deadline for a trade agreement with China slide for a little while if both the sides were ready to close a deal. The greenback against a basket of currencies trades 0.1 percent up at 96.79, having touched a high of 97.20 the day before, its highest since December 17. FxWirePro's Hourly Dollar Strength Index stood at 17.80 (Neutral) by 1000 GMT.
EUR/USD: The euro eased, reversing some of its previous session gains after data showed Eurozone industrial production fell more than expected in December, weighed down by a decline in the output of capital goods, used for investment. The European currency traded 0.1 percent down at 1.1317, having touched a low of 1.1257 on Tuesday, its lowest since Nov. 13. FxWirePro's Hourly Euro Strength Index stood at 32.87 (Neutral) by 0500 GMT. Immediate resistance is located at 1.1368 (Feb.7 High), a break above targets 1.1417 (Jan. 25 High). On the downside, support is seen at 1.1289 (Jan. 24 Low), a break below could drag it till 1.1216 (Nov. 13 Low).
USD/JPY: The dollar surged to a fresh near 7-week peak, amid hopes of a deal between the United States and China over a long-drawn trade war. The major was trading 0.2 percent up at 110.70, having hit a high of 110.76 earlier, its highest since December 28. FxWirePro's Hourly Yen Strength Index stood at -90.71 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. consumer price index and Fed officials' speeches. Immediate resistance is located at 110.94 (Aug. 13 Low), a break above targets 111.40 (Dec. 26 Low). On the downside, support is seen at 109.75 (10-DMA), a break below could take it lower at 109.16 (Jan. 28 Low).
GBP/USD: Sterling edged lower after data showed British inflation fell to a 2-year low in January, drifting below the Bank of England's target, while markets firmly focused on the progress of Brexit negotiations. The major traded 0.1 percent down at 1.2882, having hit a low of 1.2832 on Tuesday; it’s lowest since January 21. FxWirePro's Hourly Sterling Strength Index stood at -75.84 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.2984 (10-DMA), a break above could take it near 1.3080 (January 23 High). On the downside, support is seen at 1.2827 (November 12 Low), a break below targets 1.2800. Against the euro, the pound was trading flat at 87.84 pence, having hit a low of 88.21 last week, it’s lowest since Jan. 22.
USD/CHF: The Swiss franc rebounded from a 3-month low hit earlier in the week, as greenback's rally paused amid optimism that the United States and China might be able to agree on a deal to resolve their nearly year-long trade dispute. The major trades 0.1 percent lower at 1.0056, having touched a high of 1.0096 on Monday; it’s highest since November 14. FxWirePro's Hourly Swiss Franc Strength Index stood at -81.79 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0111 (November 12 High) and any break above will take the pair to next level till 1.0150. The near-term support is around 0.9961 (January 22 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares surged, as optimism about Washington and Beijing trade talks boosted investor sentiment.
The pan-European STOXX 600 index rallied 0.3 percent at 363.89 points, while the FTSEurofirst 300 index surged 0.3 percent to 1,432.04 points.
Britain's FTSE 100 trades 0.4 percent up at 7,164.15 points, while mid-cap FTSE 250 gained 0.6 to 18,944.05 points.
Germany's DAX rose 0.1 percent at 11,134.39 points; France's CAC 40 trades 0.3 percent higher at 5,069.36 points
Commodities Recap
Crude oil prices surged, after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production, and as U.S. oil inventories eased. International benchmark Brent crude was trading 0.9 percent up at $63.16 per barrel by 1033 GMT, having hit a low of $60.58 on Thursday, its lowest since February 1. U.S. West Texas Intermediate was trading 0.5 percent higher at $53.54 a barrel, after falling as low as $51.22 on Monday, its lowest since the January 17.
Gold prices nudged higher, supported by a weaker dollar on hopes of a deal between the United States and China over a long-drawn trade war. Spot gold was 0.05 percent up at $1,311.21 per ounce by 1035 GMT, having touched a low of $1,302.71 on Thursday, its lowest level since Jan. 29. while U.S. gold futures gained 0.1 percent to $1,315.3 an ounce.
Treasuries Recap
The U.S. Treasury yields traded flat during late European session as investors wait to watch the country’s core consumer price inflation (CPI) data for the month of January, scheduled to be released today by 13:30GMT and a host of speeches by FOMC members Bostic, Mester and Harker, due today at 13:50GMT and 17:00GMT respectively. The yield on the benchmark 10-year Treasury yield hovered around 2.682 percent, the super-long 30-year bond yields traded nearly flat at 3.019 percent and the yield on the short-term 2-year traded tad higher at 2.514 percent.
The German bunds remained narrowly mixed during European session ahead of the country’s gross domestic product (GDP) for the fourth quarter of 2018, scheduled to be released on February 14 by 07:00GMT and the eurozone’s Q4’18 GDP as well, due on the same day by 10:00GMT for further insight into the debt market. The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to 0.123 percent, the yield on 30-year note hovered around 0.751 percent while the yield on short-term 2-year remained tad higher at -0.566 percent.
The Japanese government bonds remained mixed towards the end of Asian session, despite a surge in global risk sentiments after a fresh round of trade talks started between the United States and China, thus pushing global stock prices higher. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1-1/2 basis points to -0.013 percent, the yield on the long-term 30-year jumped nearly 2-1/2 basis points to 0.602 percent and the yield on short-term 2-year plunged 16 basis points to -0.160 percent.
The Australian government bonds slumped across the curve during Asian trading session after U.S. President Donald Trump softened his stance on trade negotiations overnight. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose about 4 basis points to 2.15 percent, the yield on the long-term 30-year bond also climbed 4 basis points to 2.70 percent and the yield on short-term 2-year jumped over 2-1/2 basis points to 1.77 percent.
