Market Roundup
- France Q1 industrial investment (current year) stays flat at 4 % vs previous 4 %
- France Dec budget balance increase to -67.8 bln eu vs previous -84.7 bln eu
- Germany Dec industrial orders mm increase to 3.8 % (forecast 0.7 %) vs previous -0.4 %
- Anti-Brexit lawmakers will appeal against Scottish court decision not to refer to European court of justice case on whether Britain could unilaterally stop Brexit - lawyer
- Legal case to decide if Britain could unilaterally stop Brexit should not be referred to European court of justice -Scottish court
- Sweden Dec industrial production yy increase to 8.1 % vs previous 6.5 %
- Sweden Dec industrial production mm decrease to 0.8 % vs previous 0.9 %
- Sweden Dec construction production yy decrease to 5.3 % vs previous 5.4 % (revised from 4.3 %)
- Sweden Dec services production yy decrease to 2.6 % vs previous 7.5 % (revised from 7.1 %)
- Sweden Dec industrial production val yy increase to 7.5 % vs previous 6.2 % (revised from 6.1 %)
- Sweden Dec private production yy decrease to 5.3 % (forecast 4.2 %) vs previous 7.2 % (revised from 6.6 %)
- Sweden Dec new orders manufacturing YY decrease to 5.8 % vs previous 7.7 % (revised from 7.9 %)
Economic Data Ahead
- (0830 ET/1330 GMT) The United States releases trade balance figures for the month of December. The economy's trade deficit is expected to have expanded to $52.0 billion from 50.5 billion in November.
- (0830 ET/1330 GMT) The Statistics Canada is likely to report that international trade deficit narrowed to C$2.20 billion in December from C$2.54 billion in November.
- (1000 ET/1500 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of December. The report is expected to show job openings rose to 5.999 million from 5.879 million in November.
- (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 55.1 in January.
- (1000 ET/1500 GMT) The Richard Ivey School of Business releases Canada's seasonally adjusted Ivey Purchasing Managers Index for the month of January. The index posted a reading of 60.4 in the prior month.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
- (1645 ET/2145 GMT) The Statistics New Zealand reports its unemployment rate for the fourth quarter. The indicator stood at 4.6 percent in the third quarter.
- (1830 ET/ 2330 GMT) The Australian Industry Group (AiG) releases its Performance of Construction Index for the month of January. The index stood at 52.8 in the month of December.
- (1850 ET/2350 GMT) Japan releases Foreign Exchange Reserves report for the month of January.
Key Events Ahead
- (0850 ET /1350 GMT) St. Louis Fed President James Bullard gives a presentation on the U.S. economy and monetary policy before the 29th Annual Gatton College of Business and Economics Economic Outlook Conference in Lexington.
FX Beat
DXY: The dollar index nudged down as the yield on the benchmark 10-year Treasuries plunged 6 basis points. The greenback against a basket of currencies traded 0.3 percent down at 89.50, having touched a high of 89.43 on Friday, its highest since Jan. 30. FxWirePro's Hourly Dollar Strength Index stood at 88.88 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro rebounded after falling to a 1-week low earlier in the day after data showed German industrial orders rose more than expected in December, supporting expectations that Europe's largest economy is on track for another year of growth after expanding by 2.2 percent in 2017. The European currency traded 0.4 percent up at 1.2411, having touched a low of 1.2351 earlier, its lowest since Jan. 30. FxWirePro's Hourly Euro Strength Index stood at -27.81 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2435, a break above targets 1.2500. On the downside, support is seen at 1.2351 (50.0% retracement of 1.2264 and 1.2537), a break below could drag it lower 1.2307 (38.2% retracement).
USD/JPY: The dollar edged up after falling to a 1-week trough on a sell-off across world stock markets that sent investors rushing into safe-haven assets. The major was trading 0.1 percent up at 109.16, having hit a high of 110.48 on Friday, its highest since Jan. 23. FxWirePro's Hourly Yen Strength Index stood at 179.38 (Highly Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. trade balance and Fed Bullard's speech for further momentum. Immediate resistance is located at 109.31 (5-DMA), a break above targets 109.75. On the downside, support is seen at 108.41, a break below could take it lower 108.00.
GBP/USD: Sterling steadied near a 2-week low hit earlier in the day amid Brexit concerns and uncertainty around British Prime Minister May’s government. The major traded flat at 1.3963, having hit a low of 1.3937 earlier, it’s lowest since Jan 23. FxWirePro's Hourly Sterling Strength Index stood at -161.09 (Highly Bearish) by 1000 GMT. Immediate resistance is located at 1.4134 (5-DMA), a break above could take it near 1.4200. On the downside, support is seen at 1.3918 (21-DMA), a break below targets 1.3900. Against the euro, the pound was trading 0.4 percent down at 88.85 pence, having hit a low of 88.91 pence, it’s lowest since Jan. 17.
USD/CHF: The Swiss franc eased after rising to a 2-1/2 year high on Friday as the greenback regained some lost ground against a basket of currencies. The major trades 0.3 percent up at 0.9346, having touched a low of 0.9255 last week, it’s lowest since August. 2015. FxWirePro's Hourly Swiss Franc Strength Index stood at -93.90 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9415 (61.8% retracement of 0.9666 and 0.9255) and any break above will take the pair to next level till 0.9464 (50.0% retracement). The near-term support is around 0.9230 and any close below that level will drag it till 0.9200.
Equities Recap
European shares tumbled as U.S. stocks plunged to its biggest intraday decline in history, while the euro bounced back from 1-week lows following upbeat German industrial orders report.
The pan-European STOXX 600 index slumped 1.9 percent to 374.79 points, while the FTSEurofirst 300 index edged down 2.0 percent to 1,468.85 points.
Britain's FTSE 100 trades 2.03 percent lower at 7,185.82 points, while mid-cap FTSE 250 eased 2.2 percent to 19,267.39 points.
Germany's DAX fell 1.9 percent at 12,440.28 points; France's CAC 40 trades 1.6 percent down at 5,200.05 points.
Commodities Recap
Crude oil price extended losses for the third straight session as a rout in global equities triggered losses across bonds and commodities. International benchmark Brent crude was trading flat at $66.99 per barrel by 1005 GMT, having hit a low of $66.81 earlier, its lowest since Jan. 3. U.S. West Texas Intermediate was trading 0.3 percent up at $63.62 a barrel, after falling as low as $63.27, its weakest since Jan. 22.
Gold prices rose, extending previous session gains as a rout in global equities prompted investors to seek shelter in safe havens, however, expectations of more U.S. rate hikes this year capped upside. Spot gold was up 0.3 percent to $1,343.36 per ounce at 1007 GMT, having hit a low of 1,327.36 on Friday, lowest since Jan 19. U.S. gold futures for April delivery rose 0.7 percent to $1,345.60 per ounce on Tuesday.
Treasuries Recap
The U.S. Treasuries jumped as investors fled to safe-haven bonds amid a worsening equity sell-off. Treasuries have been on a wild ride over the past month, with yields steadily climbing throughout January as an improving economy spurred fears of inflation and increased borrowing costs. The yield on the benchmark 10-year Treasuries plunged 6 basis points to 2.73 percent, the super-long 30-year bond yields slumped 3-1/2 basis points to 3.03 percent and the yield on the short-term 2-year traded 5 basis points lower at 2.03 percent.
The UK gilts surged on rise in safe-haven demand as Brexit worries made a comeback ahead of the Bank of England’s (BoE) monetary policy decision, scheduled to be unveiled on February 8 by 12:00GMT for detailed insight into the bond market. The yield on the benchmark 10-year gilts, slumped 4 basis points to 1.52 percent, the super-long 30-year bond yields plunged 3 basis points to 1.92 percent and the yield on the short-term 2-year traded nearly 3 basis points lower at 0.60 percent.
The German bunds jumped as investors wait to watch the country’s 10-year auction, scheduled to be held on February 7 by 10:40GMT and the trade balance for the month of December, due on the following day at 07:00GMT. The German 10-year bond yields, which move inversely to its price, slumped nearly 4 basis points to 0.70 percent, the yield on 30-year note plunged nearly 4 basis points to 1.35 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points lower at -0.57 percent.
The Japanese government bonds gained in a muted trading session that witnessed least data of major economic significance and as investors await the country’s 30-year auction scheduled to be held later this week. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped 1 basis point to 0.07 percent, the yield on the long-term 30-year note also fell nearly 1 basis point to 0.81 percent and the yield on short-term 2-year too traded 1 basis point lower at -0.14 percent.
The Australian 10-year government bond yields sank to a 3-week low after the country’s retail sales for the month of December worsened below market expectations. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 14-1/2 basis points to 2.76 percent, the yield on the long-term 30-year note plunged 12-1/2 basis points to 3.40 percent and the yield on short-term 2-year traded nearly 6-1/2 basis points lower at 1.99 percent.
