Market Roundup
- Italy Jan 2019 CPI nsa increase to 102.4 vs previous 102.3
- Eurozone Dec 2018 producer prices yy decrease to 3 % (forecast 3.2 %) vs previous 4 %
- Eurozone Dec 2018 producer prices mm decrease to -0.8 % (forecast -0.6 %) vs previous -0.3 %
- Italy Jan 2019 CPI (EU norm) prelim mm decrease to -1.7 % (forecast -1.9 %) vs previous -0.1 %
- Italy Jan 2019 consumer price prelim yy decrease to 0.9 % vs previous 1.1 %
- Italy Jan 2019 consumer price prelim mm increase to 0.1 % vs previous -0.1 %
- Italy Jan 2019 CPI (EU norm) prelim yy decrease to 0.9 % (forecast 0.8 %) vs previous 1.2 %
- Eurozone Feb 2019 Sentix index decrease to -3.7 diff.idx (forecast -0.6 diff.idx) vs previous -1.5 diff.idx
- United Kingdom Jan 2019 Markit/CIPS cons PMI decrease to 50.6 diff.idx (forecast 52.4 diff.idx) vs previous 52.8 diff.idx
Economic Data Ahead
- (0945 ET/1445 GMT) The NAPM-New York releases ISM-New York Index for the month of January. The index stood at 65.4 in the previous month.
- (1000 ET/1500 GMT) The United States is likely to report that factory orders increased 0.2 percent in November after posting a fall of 2.1 percent in the prior month.
- (1400 ET/1900 GMT) The Federal Reserve releases its Loan Officer Survey.
Key Events Ahead
- (1930 ET/0030 GMT) Federal Reserve Bank of Cleveland President Loretta Mester speaks on the economic outlook and monetary policy before the 50 Club of Cleveland monthly meeting.
FX Beat
DXY: The dollar index rallied across the board, as the benchmark 10-year U.S. Treasury yield rebounded from a 4-week low of 2.619 percent hit last week. The greenback against a basket of currencies trades 0.1 percent up at 95.72, having touched a low of 95.16 on Thursday, its lowest since December 10. FxWirePro's Hourly Dollar Strength Index stood at 80.98 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro eased after data showed Eurozone producer prices fell more than expected month-on-month in December, weighed down by cheaper energy. The European currency traded 0.1 percent down at 1.1444, having touched a high of 1.1514 on Thursday, its highest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at -14.14 (Neutral) by 1000 GMT. 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 fresh 1-week peak, as strong U.S. jobs data and expanding stimulus in China boosted appetite for the greenback. However, indications from the U.S. Federal Reserve that interest rate increases may be over for now limited the upside. The major was trading 0.3 percent up at 109.90, having hit a high of 109.92 earlier, its highest since January 25. FxWirePro's Hourly Yen Strength Index stood at 108.96 (Highly Bearish) by 1000 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 declined, extending losses for the third straight session after a business survey showed growth in Britain's construction industry ebbed in January, as uncertainty around Brexit dragged on commercial building work. The major traded 0.2 percent down at 1.3054, having hit a high of 1.3217 last month; it’s highest since October 16. FxWirePro's Hourly Sterling Strength Index stood at -98.26 (Slightly 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 0.2 percent down at 87.69 pence, having hit a low of 87.93 on Friday, it’s lowest since Jan. 22
USD/CHF: The Swiss franc slumped to a 5-day low, as the greenback gained after data released on Friday showed nonfarm payrolls jumped by 304,000 jobs last month, exceeding estimates and the largest gain since February 2018. The major trades 0.2 percent up at 0.9973, having touched a high of 0.9994 on Wednesday; it’s highest since December 5. FxWirePro's Hourly Swiss Franc Strength Index stood at -85.43 (Slightly Bearish) 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 gained as stronger than expected U.S. economic data helped to ease downside risks to the U.S, economy.
The pan-European STOXX 600 index edged higher 0.05 percent at 359.73 points, while the FTSEurofirst 300 index rose 0.05 percent to 1,414.77 points.
Britain's FTSE 100 trades 0.3 percent up at 7,038.75 points, while mid-cap FTSE 250 gained 0.1 to 18,829.06 points.
Germany's DAX rose 0.1 percent at 11,183.47 points; France's CAC 40 trades 0.3 percent higher at 5,009.85 points
Commodities Recap
Crude oil prices rallied to a 2-month high above $63 a barrel as OPEC-led supply cuts and U.S. sanctions against Venezuela's petroleum industry offset forecasts of weaker demand and an economic slowdown. International benchmark Brent crude was trading 1.1 percent higher at $63.52 per barrel by 1013 GMT, having hit a high of $63.61 earlier, its highest since December 7. U.S. West Texas Intermediate was trading 0.6 percent higher at $55.68 a barrel, after rising as high as $55.72, its highest since the November 21.
Gold prices declined as risk-aversion waned amid some signs of progress in U.S.-China trade talks. Spot gold slumped 0.5 percent to $1,311.30 per ounce by 1016 GMT, having touched a high of $1,326.15 on Thursday, its highest level since April 26. U.S. gold futures fell 0.4 percent to $1,316.8 per ounce.
Treasuries Recap
The United Kingdom’s gilts remained nearly flat during the late afternoon session after the country’s construction PMI failed to cheer market investors ahead of the Bank of England’s (BoE) monetary policy meeting, scheduled to be held by end of this week, which shall provide further direction to the debt market. The yield on the benchmark 10-year gilts, hovered around 1.247 percent, the super-long 30-year bond yields steadied at 1.751 percent and the yield on the short-term 2-year too remained flat at 0.769 percent.
The Japanese government bonds remained mixed towards the close of Asian session 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 1/2 basis point to 2.75 percent and the yield on short-term 2-year jumped 1-1/2 basis points to 1.84 percent.
