Market Roundup
• Japan Coincident Indicator (MoM) (Dec) -0.4%, -1.0% previous
•Japan Leading Index (Dec) 110.2, 109.8 forecast, 109.9 previous
•German Trade Balance (Dec): 17.1B, 14.1B forecast, 13.6B previous.
•German Industrial Production (MoM) (Dec): -1.9%, -0.2% forecast, 0.2% previous.
•UK Halifax House Price Index (MoM) (Jan): 0.7%, 0.1% forecast, -0.5% previous.
•UK Halifax House Price Index (YoY) (Jan): 1.0%, 0.4% previous.
Looking Ahead Economic Data (GMT)
•10:00 UK Mortgage Rate (GBP) (Jan) 6.77% previous.
Looking Ahead Events And Other Releases (GMT)
• No events Ahead
Currency Forecast
EUR/USD : The euro edged on Friday after the European Central Bank left interest rates on hold as expected on Thursday and played down the impact of dollar moves on its future decisions. At a press conference following the decision, central bank President Christine Lagarde said the outlook for inflation was more uncertain than usual and that a stronger euro could lower price pressures by more than policymakers currently expect. The euro zone's central bank has been on hold since ending a year-long run of rate cuts in June, and surprisingly resilient growth has taken nearly all pressure off policymakers to provide any further support. Immediate resistance can be seen at 1.1908(38.2%fib), an upside break can trigger rise towards 1.1978(Jan 30th high).On the downside, immediate support is seen at 1.1786(50%fib), a break below could take the pair towards 1.1762(SMA 20).
GBP/USD: Sterling inched higher on Friday, a day after the Bank of England kept interest rates unchanged in a closely contested 5–4 vote, signaling that a rate cut could follow if inflation continues to moderate as anticipated. The tight vote caught markets off guard and underscored increasing divisions within the Monetary Policy Committee over the future path of policy. Governor Andrew Bailey was among the five members who backed holding rates steady, but he suggested his position could change if inflation expected to fall to the Bank’s 2% target from April shows a sustained decline rather than a temporary slowdown. The Bank’s cautious messaging strengthened expectations that policy easing may be nearing . Immediate resistance can be seen at 1.3676(38.2%fib), an upside break can trigger rise towards 1.3728(Feb 4th high).On the downside, immediate support is seen at 1.3547 (50%fib), a break below could take the pair towards 1.3419(61.8%fib).
AUD/USD: The Australian dollar edged higher but gains were limited on Friday as a broad selloff in global equities and metals weighed on risk appetite.The cautious mood followed sharp declines on Thursday, with silver tumbling another 5.2% and Bitcoin falling 3.3%, highlighting a broader retreat from higher-risk investments.Aussie gains made early in the week when the Reserve Bank of Australia hiked its cash rate a quarter point to 3.85% and left the door open to further tightening if inflation stayed stubborn in coming months.Appearing before lawmakers on Friday, RBA Governor Michele Bullock reiterated that higher rates were needed to slow the economy and bring demand back into line with limited supply..Markets imply around a 70% chance rates will rise to 4.10% at the RBA's May meeting, following inflation data for the first quarter due in late April. Immediate resistance can be seen at 0.6748(Feb 3rd high), an upside break can trigger rise towards 0.7084(Higher BB).On the downside, immediate support is seen at 0.6941(38.2%fib), a break below could take the pair towards 0.6835(SMA 20)
USD/JPY: The U.S. dollar slipped against the yen on Friday as the Japanese currency strengthened ahead of this weekend’s lower house elections. Japan’s first female Prime Minister, Sanae Takaichi, is seeking to reinforce her grip on power in Sunday’s national vote, with opinion polls indicating a strong victory for her conservative party. Surveys released this week suggest that Takaichi’s Liberal Democratic Party, together with its coalition partner the Japan Innovation Party (Ishin), could win around 300 seats in the 465-member lower house of parliament.Takaichi’s proposal to help households cope with rising living costs by suspending the 8% sales tax on food triggered a market selloff last month, as investors raised concerns about the fiscal consequences of the plan.The election has left investors cautious, with fiscal concerns already fueling sharp volatility in currency and bond markets. Any further declines could have broader ripple effects across global financial markets. Immediate resistance can be seen at 157.89(Dec 18th high) an upside break can trigger rise towards 159.21(23.6%fib) .On the downside, immediate support is seen at 155.37(Daily low) a break below could take the pair towards 154.36 (50%fib).
Equities Recap
Asian shares edged lower on Friday as investors continued to pull back from technology stocks, reflecting persistent caution toward the sector.
Hang Sang was up 1.21%, Japan’s Nikkei 225 was up by 0.89% ,South Korea’s KOSPI was down at 1.44 %
Commodities Recap
Gold prices rose on Friday as a sharp selloff in global equity markets boosted safe-haven demand, while increased volatility led U.S. exchange operator CME to raise margin requirements on precious metals again to manage market risks.
Spot gold rose 1.6% to $4,848.25 per ounce by 0758 GMT. U.S. gold futures for April delivery lost 0.4% to $4,870.10 per ounce.
Oil prices climbed more than 1% on Friday following a sharp decline in the previous session, but remained on track for their first weekly loss in nearly two months as supply concerns eased and investors turned their attention to the outcome of U.S.-Iran talks scheduled later in the day.
Brent crude futures rose 78 cents, or 1.2%, to $68.33 a barrel by 0658 GMT, while U.S. West Texas Intermediate crude was up 80 cents, or 1.3%, at $64.09 a barrel
