Market Roundup
- Eurozone Dec 2018 retail sales yy decrease to 0.8 % (forecast 0.5 %) vs previous 1.8 % (revised from 1.1 %)
- Eurozone Dec 2018 retail sales mm decrease to -1.6 % (forecast -1.6 %) vs previous 0.8 % (revised from 0.6 %)
- United Kingdom Jan 2019 new passenger cars registration increase to 161013 no. of vs previous 144089 no. of
- United Kingdom Jan 2019 reserve assets total increase to 180845.17 usd vs previous 176576.56 usd
- United Kingdom Jan 2019 Markit/CIPS service PMI decrease to 50.1 diff.idx (forecast 51 diff.idx) vs previous 51.2 diff.idx
- Eurozone Jan 2019 Markit composite final PMI increase to 51 diff.idx (forecast 50.7 diff.idx) vs previous 50.7 diff.idx
- Eurozone Jan 2019 Markit service final PMI increase to 51.2 diff.idx (forecast 50.8 diff.idx) vs previous 50.8 diff.idx
- Germany Jan 2019 Markit composite final PMI stays flat at 52.1 diff.idx (forecast 52.1 diff.idx) vs previous 52.1 diff.idx
- Germany Jan 2019 Markit services PMI decrease to 53 diff.idx (forecast 53.1 diff.idx) vs previous 53.1 diff.idx
- France Jan 2019 Markit composite PMI increase to 48.2 diff.idx (forecast 47.9 diff.idx) vs previous 47.9 diff.idx
- France Jan 2019 Markit service PMI increase to 47.8 diff.idx (forecast 47.5 diff.idx) vs previous 47.5 diff.idx
- Italy Jan 2019 Markit/IHS service PMI decrease to 49.7 diff.idx (forecast 50 diff.idx) vs previous 50.5 diff.idx
Economic Data Ahead
- (0830 ET/1330 GMT) The Statistics Canada reports its international merchandise trade for the month of December.
- (0945 ET/1445 GMT) Financial firm Markit releases final U.S. composite PMI for the month of January. The index posted a final reading of 54.5 in the previous month.
- (0945 ET/1445 GMT) Markit Economics reports final U.S. services PMI for the month of January. The index posted a final reading of 54.2 in December.
- (1000 ET/1500 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index eased to a final reading of 57.1 in January from 58.0 in December.
- (1000 ET/1500 GMT) The Investor's Business Daily (IBD)/ TechnoMetrica Institute of Policy and Politics (TIPP) will release U.S. Economic Optimism index for the month of February. The indicator rose to 52.3 in January.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- No Significant Event Scheduled
FX Beat
DXY: The dollar index surged to a 1-1/2 week peak ahead of the U.S. President Donald Trump's State of the Union address. The greenback against a basket of currencies trades 0.2 percent up at 95.98, having touched a high of 95.99, its highest since January 25. FxWirePro's Hourly Dollar Strength Index stood at 50.85 (Bullish) by 1100 GMT.
EUR/USD: The euro plunged to a 6-day low after data showed Eurozone businesses expanded at their weakest rate since mid-2013 in January as a manufacturing slowdown spread to services, with demand declining for the first in over four years. The European currency traded 0.2 percent down at 1.1417, having touched a low of 1.1411 earlier, its lowest since Jan. 30. FxWirePro's Hourly Euro Strength Index stood at -11.19 (Neutral) by 1100 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 1.1394 (Jan. 7 Low), a break below could drag it till 1.1370 (Jan. 17 Low).
USD/JPY: The dollar rose, hovering towards an over 1-month peak hit in the prior session, as investors await U.S. President Donald Trump's State of the Union address that could hint at progress in U.S.-China trade talks. The major was trading 0.1 percent up at 109.94, having hit a high of 110.16 on Monday, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at -45.16 (Neutral) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. service PMI from both Markit and ISM. 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 109.16 (Jan. 28 Low), a break below could take it lower at 108.80 (Jan. 30 Low).
GBP/USD: Sterling slumped to a near 2-week low after Britain’s services sector reported job cuts for the first time in six years and falling new orders. The Markit/CIPS UK Services Purchasing Managers' Index fell to 50.1 in January from 51.2 in December, its lowest level since July 2016. The major traded 0.2 percent lower at 1.3006, having hit a low of 1.3000 earlier; it’s lowest since January 23. FxWirePro's Hourly Sterling Strength Index stood at -100.92 (Highly Bearish) 1100 GMT. Immediate resistance is located at 1.3103 (February 4 High), a break above could take it near 1.3160 (January 31 High). On the downside, support is seen at 1.2964 (November 5 Low), a break below targets 1.2936 (October 23 Low). Against the euro, the pound was trading 0.1 percent down at 87.77 pence, having hit a low of 87.93 on Friday, it’s lowest since Jan. 22.
USD/CHF: The Swiss franc tumbled to a 2-1/2 month trough as a modest recovery in investors' risk appetite gave an overnight boost to U.S. yields. The major trades 0.4 percent up at 1.0014, having touched a high of 1.0020; it’s highest since November 16. FxWirePro's Hourly Swiss Franc Strength Index stood at -110.99 (Highly Bearish) by 1100 GMT. On the higher side, near-term resistance is around 1.0048 November 2 High) and any break above will take the pair to next level till 1.0070 (November 8 High). The near-term support is around 0.9961 (January 22Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares surged to a 9-week high, boosted by a recovery in banks and gains in oil stocks, while sterling plunged following weak services PMI.
The pan-European STOXX 600 index rallied 0.8 percent at 362.75 points, while the FTSEurofirst 300 index rose 0.9 percent to 1,427.36 points.
Britain's FTSE 100 trades 1.2 percent up at 7,118.99 points, while mid-cap FTSE 250 gained 0.2 to 18,880.62 points.
Germany's DAX rose 1.1 percent at 11,291.48 points; France's CAC 40 trades 0.9 percent higher at 5,045.21 points
Commodities Recap
Crude oil prices rallied as investors expect U.S. sanctions on Venezuela and production cuts led by OPEC and its allies to reduce any glut. International benchmark Brent crude was trading 0.4 percent up at $62.94 per barrel by 1054 GMT, having hit a high of $63.61 on Monday, its highest since December 7. U.S. West Texas Intermediate was trading 0.5 percent higher at $55.11 a barrel, after rising as high as $55.73 on Monday, its highest since the November 21.
Gold prices rebounded from a near 1-week low touched in the previous session; however, improved appetite for riskier assets capped the safe havens gains. Spot gold gained 0.1 percent to $1,313.75 per ounce by 1056 GMT, having touched a low of $1,318.89 on Monday, its lowest level since Jan. 29. U.S. gold futures were firm at $1,318.10 an ounce.
Treasuries Recap
The U.S. Treasuries traded lower during late European session ahead of the country’s ISM non-manufacturing PMI for the month of January and the 3-year note auction, both scheduled to for today at 15:00GMT and 18:00GMT respectively. The yield on the benchmark 10-year Treasury yield rose 1 basis point to 2.734 percent, the super-long 30-year bond yields also edged nearly 1 basis point higher to 3.068 percent and the yield on the short-term 2-year too traded 1 basis point up at 2.543 percent.
The United Kingdom’s gilts rose during late afternoon session after the country’s services PMI for the month of January failed to cheer market investors ahead of the Bank of England’s (BoE) monetary policy meeting, scheduled to be held on February 7 by 12:00GMT, which shall provide further direction to the debt market. The yield on the benchmark 10-year gilts, slipped nearly 1 basis point to 1.269 percent, the super-long 30-year bond yields slumped nearly 2-1/2 basis points to 1.763 percent and the yield on the short-term 2-year remained tad lower at 0.783 percent.
The Japanese government bonds remained mixed during late Asian session ahead of the country’s super-long 30-year bond auction, scheduled to be held on February 7 by 03:35GMT and the household spending data for the month of December, due for release on the same day by 23:30GMT. The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell 1-1/2 basis points to -0.014 percent, the yield on the long-term 30-year edged 1 basis point higher to 0.617 percent while the yield on short-term 2-year plunged 16-1/2 basis points to -0.164 percent.
The Australian government bond yield pared gains across the curve during Asian trading session as retail sales were much weaker than expected in December, while volumes for the quarter were also disappointing. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose about 2 basis points to 2.24 percent, the yield on the long-term 30-year bond also climbed 2 basis points to 2.77 percent and the yield on short-term 2-year jumped 1-1/2 basis points to 1.85 percent.
