Market Roundup
•U.S. consumer price index data due at 1330 GMT
• French Unemployment Rate (Q4)7.5%,7.4% forecast,7.4%previous
•UK Jan Claimant Count Change 14.1K,15.2K forecast,11.7K previous
•UK Dec Unemployment Rate 3.8%,4.0% forecast,3.9% previous
•UK Dec Average Earnings Index +Bonus 5.8%, 5.6% forecast, 6.5% previous
•UK Dec Employment Change 3M/3M (MoM) 72K ,73K forecast,108K previous
•UK Dec Average Earnings ex Bonus 6.2%,6.0% forecast,6.6% previous
•Swiss Jan CPI (YoY) 1.3%,1.7% forecast,1.7% previous
•Swiss Jan CPI (MoM) 0.2%,0.6% forecast,0.0% previous
•German Feb ZEW Current Conditions -81.7,-79.0 forecast,-77.3 previous
•EU Feb ZEW Economic Sentiment 25.0 ,20.1 forecast,22.7 previous
•German Feb German ZEW Economic Sentiment 19.9,17.4 forecast,15.2 previous
Looking Ahead Economic Data(GMT)
•13:30 US Jan Core CPI (YoY) 3.7% forecast,3.9% previous
•13:30 US Jan Real Earnings (MoM) -0.2% previous
•13:30 US Jan CPI, n.s.a (MoM -0.10% previous
•13:30 US Jan CPI Index, s.a 308.85 previous
•13:30 US Jan Core CPI Index 313.22 previous
•13:30 US Jan CPI Index, n.s.a 307.99 forecast, 306.75 previous
•13:30 US Jan CPI (YoY) 2.9% forecast, 3.4% previous
•13:30 US Jan Core CPI (MoM) 0.3% forecast,0.3% previous
•13:30 US Jan CPI (MoM) 0.2% forecast,0.3% previous
•13:55 US Redbook (YoY) 6.1% previous
•16:00 US Jan Cleveland CPI (MoM) 0.4% previous
• 21:30 US API Weekly Crude Oil Stock 2.600M forecast,0.674M previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro was little changed against dollar on Tuesday as investors were cautious ahead of U.S. consumer pricing data, which is critical in determining the Federal Reserve's interest rate path. All eyes will be on the January consumer price index (CPI) in the United States, which will be released at 1330 GMT. Economists surveyed predict year-over-year headline CPI to fall by 50 basis points (bps) to 2.9%, bringing it within one percentage point of the Fed's 2% goal. The odds for at least a 25 bps rate reduction by the Fed in May have dropped to 56%, from over 95% at the start of 2024, as per the CME FedWatch Tool.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 strengthened against dollar on Tuesday as investors slightly scaled back their bets on BoE rate cuts in 2024 after stronger-than-forecast wage data. Wages excluding bonuses increased by 6.2% in October-November compared to the same period a year ago. This was down from 6.7% in the three months to November, although it topped the consensus prediction of 6.0% in a survey of analysts. The unemployment rate fell to 3.8%, below expectations of a decline to 4.0%. Sterling was also up 0.3% against the dollar at $1.2668, its highest since Feb. 2. Immediate resistance can be seen at 1.2678(38.2%fib), an upside break can trigger rise towards 1.2732(23.6%fib).On the downside, immediate support is seen at 1.2642(50%fib), a break below could take the pair towards 1.2600(61.8%fib).
USD/CHF: The U.S. dollar strengthened to nine-week high against Swiss franc on Tuesday after Swiss consumer price inflation slowed by more than forecast in January. Swiss consumer prices rose 1.3% from a year ago in January, down from 1.7% in December and below the 1.7% forecast from economists polled . The numbers released today strengthen belief that the Swiss National Bank (SNB) will likely be the first central bank among the G10 nations to reduce interest rates within this monetary policy cycle. The Swiss franc declined 0.5% to 0.8797 per dollar , its weakest level Dec. 11.Immediate resistance can be seen at 0.8815(Daily high), an upside break can trigger rise towards 0.8793(23.6%fib).On the downside, immediate support is seen at 0.8750(38.2%fib), a break below could take the pair towards 0.8682(50%fib)
USD/JPY: The dollar rose to eleven week high against the yen on Tuesday as investors awaited U.S. inflation report that could offer more clues on the timing of widely expected interest rate cuts from the Federal Reserve.The yen, which has tumbled more than 5% against the dollar year-to-date, is under persistent pressure as investors pare back their expectations of the scale and pace of the Federal Reserve's easing cycle.Yen bears are also being emboldened by signs the Bank of Japan will resist aggressively hiking rates even if it exits negative interest rates this year as markets are wagering. Strong resistance can be seen at 149.83(23.6%fib),an upside break can trigger rise towards 150.06(Higher BB).On the downside, immediate support is seen 148.96 (Feb 12th low)a break below could take the pair towards 148.084(38.2%fib).
Equities Recap
European shares fell on Tuesday as investors turned cautious ahead of U.S. consumer price data that is crucial to determine the Federal Reserve's interest rate trajectory, and also assessed corporate earnings updates.
At (GMT 12:58 ) UK's benchmark FTSE 100 was down by 0.28 percent, Germany's Dax was down by 0.57 percent, France’s CAC was down by 0.50 percent.
Commodities Recap
Gold prices edged higher on Tuesday as caution set in ahead of a U.S. inflation report that could offer more clues on the timing of widely expected interest rate cuts from the Federal Reserve.
Spot gold was up 0.4% at $2,027.99 an ounce by 1145 GMT, having briefly slipped to a more than two-week low of $2,011.72 in the previous session.
Oil prices edged up on Tuesday as uncertainty over fighting in the Middle East kept markets on edge, but gains were capped by concerns that continued high interest rates may weigh on energy demand.
Brent futures were up 54 cents to $82.54 a barrel at 1224 GMT. U.S. West Texas Intermediate (WTI) crude was up 50 cents at $77.42 a barrel. Saudi state oil company Aramco has started trading WTI, which underpins the global Brent benchmark.
