Europe Roundup: Euro tumbles to seven-week lows after PMI data, European shares rise,Gold eases, Oil falls below $62-january 24th,2020

Market Roundup 

• French Jan Markit Composite PMI 51.5    , 51.5 forecast, 52.0 previous

• French Jan Services PMI  51.7, 52.2 forecast, 52.4 previous

• German Jan Composite PMI  51.1, 50.5     forecast, 50.2 previous

• German Jan Manufacturing PMI  45.2, 44.5 forecast, 43.7 previous

• German Jan Services PMI  54.2 , 53.0 forecast, 52.9 previous

• Italian Dec Trade Balance Non-EU  5.77B, 4.16B previous

• EU Jan Manufacturing PMI  47.8, 46.8 forecast, 46.3 previous

• EU Jan Markit Composite PMI  50.9, 51.2 forecast, 50.9 previous

• UK Composite PMI  52.4    , 50.5 forecast, 49.3 previous

• UK Manufacturing PMI 49.8, 47.6 forscast    , 47.5 previous

• UK Services PMI  52.9, 49.4 forecast, 50.0 previous        
            
Looking Ahead - Economic Data (GMT)    

• 13 30:  Canada Core Retail Sales (MoM)  0.4 forecast, -0.5% previous

• 13 30: Canada Nov Retail Sales (MoM)  0.4% forecast, -1.2% previous

• 14 :00: Belgium Jan NBB Business Climate  -3.0 forecast, -3.4 previous

• 14 :45 US Jan Manufacturing PMI  52.5 forecast, 52.4 previous

• 14 :45 US Jan Services PMI  52.9    forecast, 52.8 previous    
     
Looking Ahead - Events, Other Releases (GMT)

• No significant events

Fx Beat

EUR/USD: The euro declined against the U.S. dollar on Friday, as lacklustre PMI data weighed on single currency. Euro zone business activity remained lacklustre at the start of the year, a survey showed, a day after ECB rate-setters did not make any policy change, standing by their pledge to keep buying bonds and, if needed, cut interest rates until euro zone inflation headed back to their goal. Immediate resistance can be seen at 1.1072 (5 DMA), an upside break can trigger rise towards 1.1100 (11 DMA).On the downside, immediate support is seen at 1.1028 (Daily low), a break below could take the pair towards 1.1000 (Psychological level).

GBP/USD: Sterling declined against dollar on Friday as  some investors still expected an interest rate cut next week even though business surveys pointed to a post-election bounce in the UK economy. The ‘flash’ early readings of the IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) showed Britain’s vast services sector returned to growth in January for the first time since August, while a downturn in manufacturing eased. Sterling jumped to as high as $1.3180 immediately after the surveys were released before falling back. It was last down 0.2% at $1.3102.Immediate resistance can be seen at 1.3153 (Daily high), an upside break can trigger rise towards 1.3200 (Psychological level).On the downside, immediate support is seen at 1.3059 (5 DMA), a break below could take the pair towards 1.3900 (Psychological level)

USD/CHF: The dollar gained against the Swiss franc on Friday, as signs of a recovery European economy and  easing worries over the coronavirus outbreak in China improved  investors sentiment. In some of the first glimpses of the health of the region’s economy this year, a Purchasing Managers’ Index (PMI) survey showed Germany’s private sector gaining momentum, with growth in services up and a pullback in manufacturing easing. And while euro zone-wide PMI showed business activity remaining weak there were some signs that the worst may be over.At (GMT 12:51), Greenback gained 0.03% versus the Swiss franc to 0.9681. Immediate resistance can be seen at 0.9714 (Daily high), an upside break can trigger rise towards 0.9750 (Higher BB).On the downside, immediate support is seen at 0.9684 (11 DMA), a break below could take the pair towards 0.9625 (Lower BB).

USD/JPY: The dollar strengthened against the Japanese yen on Friday, although gains were limited by lack of direction from China and rising death toll and case count from a new coronavirus. Trading volumes were thin, with financial markets in China, Taiwan and South Korea closed for the Lunar New Year.The World Health Organisation (WHO) on Thursday declared the virus outbreak an emergency for China but stopped short of declaring it an international concern, offering some comfort to investors. Strong resistance can be seen at 109.96 (9 DMA), an upside break can trigger rise towards 110.51 (Higher BB).On the downside, immediate support is seen at 109.21 (Daily low), a break below could take the pair towards 109.00(Psychological level). 

Equities Recap

European shares on Friday were set to post their first daily gain this week on signs of a recovery ahead for growth, with easing worries over the coronavirus outbreak in China also emboldening investors.

At (GMT 12:51),UK's benchmark FTSE 100 was last trading lower at 1.64 percent, Germany's Dax was up by 1.55 percent, France’s CAC was last down by 1.17 percent.

Commodities recap

Gold edged down on Friday as the dollar rose and appetite for riskier assets improved after the World Health Organisation tempered fears of a global coronavirus outbreak.

Spot gold was 0.1% lower at $1,561.18 per ounce by 1039 GMT but holding above the key $1,550 support level and en route to a post small weekly gain of about 0.3%, as bets on easy monetary policy globally and lingering uncertainties on the world stage buoyed appetite for the safe haven.U.S. gold futures slipped 0.3% to $1,560.80 per ounce.    

Oil slipped below $62 a barrel on Friday and was heading for a weekly decline as concern that a virus in China may spread, curbing travel and oil demand, overshadowed supply cuts.    

Global benchmark Brent was down 28 cents to $61.76 at 1115 GMT. The contract is down almost 5% this week, its third consecutive weekly drop. U.S. crude slipped 25 cents to $55.34 and was also on course for a weekly decline.    

Treasuries Recap

U.S.: The U.S. Treasuries remained steady during Friday’s afternoon session ahead of the country’s manufacturing and composite PMI for the month of January, scheduled to be released today by 14:45GMT, amid an otherwise, muted trading day that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury yield hovered around 1.743 percent, the super-long 30-year bond yield remained flat at 2.191 percent and the yield on the short-term 2-year too remained steady at 1.524 percent.

UK: The United Kingdom’s gilts remained mixed during European trading hours Friday following a better-than-expected set of the country’s flash PMIs for the month of January, released today. The yield on the benchmark 10-year gilts, remained flat at 0.589 percent, the 30-year yield rose 1 basis point to 1.090 percent and the yield on the short-term 2-year lost 1/2 basis point to 0.415 percent.

EUR: The German bunds remained tad down during European trading session Friday following an upbeat manufacturing PMI for the month of January, released early today. The German 10-year bond yield, which moves inversely to its price, rose 1 basis point to -0.300 percent, the long-term 30-year yield also gained 1 basis point to 0.213 percent and the yield on short-term 2-year remained flat at -0.605 percent.