Market Roundup
• Spanish Jan Manufacturing PMI 48.5, 48.9 forecast, 47.4 previous
• Italian Jan Manufacturing PMI 48.9, 47.5 forecast, 46.2 previous
• French Jan Manufacturing PMI 51.1, 51.0 forecast, 51.0 previous
• German Jan Manufacturing PMI 45.3, 45.2 forecast, 43.7 previous
• EU Jan Manufacturing PMI 47.9, 47.8 forecast, 46.3 previous
• UK Jan Manufacturing PMI 50.0, 49.8 forecast , 47.5 previous
Looking Ahead - Economic Data (GMT)
14:30 Canada Jan RBC Manufacturing PMI 49.6 forecast, 50.4 previous
• 13:00 Russia GDP Quarterly (YoY) 1.7% previous
• 14:45 US Jan Manufacturing PMI 51.7 forecast, 52.4 previous
• 15:00 US Dec Construction Spending (MoM) 0.5%,0.6% previous
• 15:00 US Jan ISM Manufacturing Employment 46.6 forecast, 45.1 previous
• 15:00 US Jan ISM Manufacturing New Orders Index 46.8 previous
• 15:00 US Jan ISM Manufacturing PMI 48.5 forecast, 47.2 previous
Looking Ahead - Events, Other Releases (GMT)
• 18:00 ECB President Lagarde Speaks
• 18:15 German Buba President Weidmann Speaks
Currency Summaries
EUR/USD: The euro declined against the U.S. dollar on Monday, as investors were relieved that the UK had finally exited the EU, although ongoing fears over the virus dampened enthusiasm. The moves came as risk appetite stabilised following big falls on Chinese markets, as Beijing took steps to shore up the economy hit by travel curbs and business shutdowns because of the coronavirus outbreak, including cutting interest rates. The euro was down 0.29 percent at $1.1063.Immediate resistance can be seen at 1.1091 (21 DMA), an upside break can trigger rise towards 1.1126 (200 DMA).On the downside, immediate support is seen at 1.1044 (5 DMA), a break below could take the pair towards 1.1000 (Psychological level).
GBPUSD: Sterling fell sharply against dollar on Monday after Prime Minister Boris Johnson set out tough terms for European Union talks, rekindling fears Britain would reach the end of an 11-month transition period without agreeing a trade deal. The sides have until the end of the year, when a standstill transitional period expires, to secure a deal on trade and future relations but Johnson is striking a tough tone, saying Britain will not adhere to the bloc’s rules and regulations. Immediate resistance can be seen at 1.3188 (Daily high), an upside break can trigger rise towards 1.3250 (Jan 2nd high).On the downside, immediate support is seen at 1.3043 (Daily low), a break below could take the pair towards 1.3000 (Psychological level).
USD/CHF: The dollar edged higher against the Swiss franc on Monday, as fears surrounding the spread of coronavirus in China ebbed. Chinese markets took a beating in the first trading session after an extended Lunar New Year break.Yet this was mostly a product of selling pressure that had built up over the holiday and not a reflection of new market fears. At( GMT 12:43),Greenback edged higher 0.09% versus the Swiss franc to 0.9640. Immediate resistance can be seen at 0.9682(5 DMA), an upside break can trigger rise towards 0.9714 (Jan 31st high).On the downside, immediate support is seen at 0.9611 (Jan 16th low), a break below could take the pair towards 0.9600 (Psychological level).
USD/JPY: The dollar was little changed against the Japanese yen on Monday, as investors remained cautious as they assessed the economic repercussions from the spread of a coronavirus. The virus, which is centred on China, has spread to more than 20 other countries and regions. Looking ahead, traders will keep an eye on the start of a U.S. state-by-state process to pick presidential nominees, with Iowa holding caucuses on Monday. Strong resistance can be seen at 106.45 (5 DMA), an upside break can trigger rise towards 107.09 (Aug 6th high).On the downside, immediate support is seen at 105.52 (Lower Bollinger Band), a break below could take the pair towards 105.00 (Psychological level).
Equities Recap
European shares inched up on Monday, recovering from their worst week in nearly seven months as jitters remained over the economic fallout from a virus outbreak in China.
At (GMT 12:56),UK's benchmark FTSE 100 was last trading higher at 0.42 percent, Germany's Dax was up by 0.11 percent, France’s CAC finished was up by 0.22 percent.
Commodities Recap
Gold fell 1% on Monday, retreating from its highest level in nearly four weeks as China’s steps to protect its economy from the impact of the coronavirus epidemic and a buoyant dollar stemmed some inflows into safe haven assets.
Spot gold fell as much as 1% and was down 0.7% at $1,578.26 per ounce as of 1033 GMT.Prices touched the highest since Jan. 8 earlier in the session. U.S. gold futures shed 0.3% to $1,582.90.
Oil prices fell on Monday to their lowest in more than a year, dragged down by worries about lower demand in top crude importer China after a new coronavirus outbreak spread from there to around 20 other countries.
Brent crude was at $56.26 a barrel by 0926 GMT, down 36 cents. Prices dropped by more than a $1 earlier in the session to $55.42, the lowest since January 2019.
U.S. West Texas Intermediate (WTI) crude fell 5 cents to $51.51 a barrel, after earlier hitting a session low of $50.42, the lowest since January 2019.
Treasuries Recap
U.S.: The U.S. Treasuries slumped during Monday’s afternoon session ahead of the country’s ISM manufacturing PMI for the month of January, scheduled to be released today by 15:00GMT, amid an otherwise muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury yield surged nearly 2 basis points to 1.536 percent, the super-long 30-year bond yield surged 1-1/2 basis points to 2.025 percent and the yield on the short-term 2-year remained 1 basis point higher at 1.339 percent.
EUR: The German bunds remained nearly flat during European trading session Monday after the country’s manufacturing PMI for the month of January cheered market investors, rising above expectations ahead of the European Central Bank (ECB) President Christine Lagarde’s speech, scheduled to be delivered today by 18:00GMT. The German 10-year bond yield, which move inversely to its price, hovered around -0.438 percent, the long-term 30-year yield traded flat at 0.064 percent and the yield on short-term 2-year too remained steady at -0.676 percent.
AUS: The Australian bonds rallied during Asian session of the first trading day of the week Monday, ahead of the Reserve Bank of Australia’s (RBA) monetary policy meeting, scheduled to be held on February 4 by 03:30GMT amid an increase in the death tolls as well as number of affected cases from the Coronavirus. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged nearly 6 basis points to 0.915 percent, the yield on the long-term 30-year bond slumped nearly 7 basis points to 1.508 percent and the yield on short-term 2-year lost nearly 4 basis points to trade at 0.619 percent.
