Market Roundup
• US Feb NY Empire State Manufacturing Index 12.10, 6.00 forecast, 3.50 previous
• Canada Dec Foreign Securities Purchases by Canadians 26.94B, 7.58B previous
• Canada Dec Foreign Securities Purchases 5.08B, 11.78B previous
• New Zealand GlobalDairyTrade Price Index 3.0%,1.8% previous
Looking Ahead - Economic Data (GMT)
•23:50 Japan Dec Core Machinery Orders (YoY) -3.0% forecast, -11.3% previous
•23:50 Japan Jan Imports (YoY) -6.0%forecast,-11.6% previous
•23:50 Japan Jan Trade Balance -600.0B, 749.6B previous
•23:50 Japan Dec Core Machinery Orders (MoM) -6.2%forecast, 1.5% previous
Looking Ahead - Economic events and other releases (GMT)
• 01:00 Australia RBA Assist Gov Kent Speaks
Fx Beat
EUR/USD: The euro edged lower against dollar on as Tuesday as bullish comments from a U.S. Federal Reserve official and upbeat manufacturing data helped arouse investor risk appetite. St. Louis Fed President James Bullard said in an interview on CNBC that financial conditions in the United States were "generally good," and that inflation was likely to heat up this year, something the central bank would take into account.The New York Fed's Empire State manufacturing report offered a robust upside surprise and a rosier economic picture than suggested by data released last week.Immediate resistance can be seen at 1.2135(50%), an upside break can trigger rise towards 1.2211(61.8%fib).On the downside, immediate support is seen at 1.2096 (9DMA), a break below could take the pair towards 1.2068 (38.2%fib).
GBP/USD: Sterling hit two-and-a-half-year highs against the dollar on Tuesday as investors continued to bet that rapid COVID-19 vaccinations would set Britain up to recover from its biggest drop in output in 300 years. Investors betting on a rebound in global growth - known as the reflation trade - have also contributed to sterling’s gains as the currency is considered correlated with growth and risk sentiment. The pound rose to $1.3955 against the dollar its highest since April 2018. It was last trading at $1.3900. Immediate resistance can be seen at 1.3955(Daily high), an upside break can trigger rise towards 1.4000(Psychological level).On the downside, immediate support is seen at 1.3862 (5EMA), a break below could take the pair towards 1.3895 (38.2%fib).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Tuesday, pulling back from its strongest level in nearly four weeks which it notched earlier in the session as optimism about global economic recovery bolstered equity markets. Global shares hit record highs and were on track for their longest winning streak in 17 years as investors bet the rollout of COVID-19 vaccines would lead to a durable economic recovery and draw a line under a year of lockdowns. The Canadian dollar was trading 0.2% lower at 1.2691 to the greenback. The currency touched its strongest intraday level since Jan. 21 at 1.2610.Immediate resistance can be seen at 1.2702 (9DMA), an upside break can trigger rise towards 1.2781 (38.2%fib).On the downside, immediate support is seen at 1.2642 (23.6%fib), a break below could take the pair towards 1.2600 (Psychological level).
USD/JPY: The dollar declined against the Japanese yen on Tuesday as traders unwound their bullish bearish bets on dollar after comments from Federal Reserve official. Financial conditions in the United States were “generally good” right now, with the potential for its economic growth to outpace China, St. Louis Fed president James Bullard said on Tuesday as the country heads into its second year of the COVID-19 pandemic. Bullard also noted recent volatility in the markets with GameStop and other equities but said it appeared to be normal trading Strong resistance can be seen at 106.16 (38%fib), an upside break can trigger rise towards 106.55(23.6%fib ).On the downside, immediate support is seen at 105.85 (50%fib), a break below could take the pair towards 105.55 (61.8%fib).
Equities Recap
European shares hovered near one-year highs on Tuesday as investors bet a bumper U.S. stimulus package will power global economic growth this year, while Glencore led a rally among mining stocks after it reinstated its dividend.
UK's benchmark FTSE 100 closed down by 0.11 percent, Germany's Dax ended down by 0.32 percent, France’s CAC finished the day down by 0.01 percent.
The Dow hit an all-time high on Tuesday, while the S&P 500 and the Nasdaq retreated slightly from record levels, as investors bet on more fiscal aid to lift the world’s biggest economy from a coronavirus-driven slump.
Dow Jones closed up by 0.20%percent, S&P 500 closed down by 0.06% percent, Nasdaq settled down by 0.34%% percent.
Treasuries’ Recap
The 10-year U.S. Treasury yield rose above 1.3% for the first time in nearly a year on Tuesday and the yield curve steepened as expectations of extended fiscal and monetary stimulus alongside hopes of an economic upswing added momentum to the reflation trade.
Commodities Recap
Gold prices fell as much as 1.7% on Tuesday to their lowest in more than a week on stronger U.S. Treasury yields while platinum eased in choppy trading after a rally that took it to a 6-1/2 year high.
Spot gold fell 1.2% to $1,796.50 an ounce by 2 p.m. EST (1900 GMT), having touched its lowest since Feb. 4.
Oil prices settled near 13-month highs on Tuesday, supported by a deep freeze in the U.S. South that shut wells and oil refineries in Texas.
U.S. West Texas Intermediate (WTI) crude futures settled up 1% to $60.05, after touching their highest since early January 2020. Brent settled up 5 cents, or 0.1%, to $63.35 a barrel, near the 13-month peak reached the previous session.
