Market Roundup
• Coronavirus fears boost safety buying of Treasuries
• Fed expected to leave rates unchanged on Wednesday
• Spanish Unemployment Rate (Q4) 13.78% , 14.00% forecast,13.92% previous
• UK Jan CBI Distributive Trades Survey 0, 3 forecast, 0 previous
• Ireland Dec Retail Sales (YoY) 5.8%,1.4% previous
• Ireland Dec Retail Sales (MoM) 3.6%,-3.3% previous
Looking Ahead - Economic Data (GMT)
• 13:30 US Dec Core Durable Goods Orders (MoM) 0.2% forecast, -0.1% previous
• 13:30 US Dec Durable Goods Orders (MoM) 0.4%,-2.1% previous
• 13:30 US Dec Durables Excluding Defense (MoM) 0.7% previous
• 13:30 US Dec Goods Orders Non Defense Ex Air (MoM) 0.2% forecast, 0.2% previous
• 13:55 US Dec Redbook (YoY) 5.3% previous
• 13:55 US Dec Redbook (MoM) 0.0% previous
• 14:00 US Nov S&P/CS HPI Composite - 20 n.s.a. (YoY) 2.4% forecast, 2.2% previous
• 15:00 US Jan CB Consumer Confidence 128.0 forecast, 126.5 previous
• 15:00 US Jan Richmond Manufacturing Index 9 forecast, -5 previous
• 15:30 US Jan Dallas Fed Services Revenues 17.9 previous
• 15:30 US Texas Services Sector Outlook 13.5 previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Fx Beat
EUR/USD: The euro declined against the U.S. dollar on Tuesday, as concerns about the economic fallout from the coronavirus outbreak in China sent investors switch to safe haven assets. Meanwhile, greenback gained ahead of the start of a two-day U.S. Federal Reserve meeting later on Tuesday, with policymakers largely expected to reiterate that interest rates will remain on hold this year. Immediate resistance can be seen at 1.1038 (5 DMA), an upside break can trigger rise towards 1.1078 (11 DMA).On the downside, immediate support is seen at 1.1000 (Psychological level), a break below could take the pair towards 1.0980 (29th Nov low).
GBP/USD: Sterling slipped to a one-week low against the dollar on Tuesday, as concern about Britain’s future relationship with the European Union weighed on British currency. Sterling was last down 0.35% at $1.3007, a one-week low. The British currency was a third of a percent weaker against the euro at 84.66 pence, its lowest level in almost a week. Immediate resistance can be seen at 1.3060 (11 DMA), an upside break can trigger rise towards 1.3100 (Psychological level).On the downside, immediate support is seen at 1.2960 (Lower BB), a break below could take the pair towards 1.2900 (Psychological level)
USD/CHF: The dollar strengthened against the Swiss franc on Tuesday, as Swiss franc dipped as investors focused on the economic fallout from a new coronavirus in China, though broader market sentiment stabilised. At (GMT 12:51), Greenback gained 0.27% versus the Swiss franc to 0.9719. An index that tracks the dollar versus a basket of six major currencies was up 0.15 at 98.08 on Tuesday. Immediate resistance can be seen at 0.9722 (Daily High), an upside break can trigger rise towards 0.9745 (Higher BB).On the downside, immediate support is seen at 0.9676 (Daily Low), a break below could take the pair towards 0.9640 (Lower BB).
USD/JPY: The dollar gained against the Japanese yen on Tuesday, as investors awaited Federal Reserve meeting. The Federal Reserve is widely expected to stand pat at its policy meeting this week, but markets will be sensitive to any changes to its economic outlook. Futures imply around 35 basis points of easing by year end . The Federal Reserve is widely expected to stand pat at its policy meeting this week, but markets will be sensitive to any changes to its economic outlook. Strong resistance can be seen at 109.30 (5 DMA), an upside break can trigger rise towards 109.68 (11 DMA).On the downside, immediate support is seen at 108.73 (Daily low), a break below could take the pair towards 108.07 (Lower BB).
Equities Recap
European stocks edged higher on Tuesday, after posting their worst day in about four months in the previous session on heightened concerns about the potential impact on businesses from the coronavirus outbreak.
At (GMT 12:21),UK's benchmark FTSE 100 was last trading higher at 0.45 percent, Germany's Dax was up by 0.29 percent, France’s CAC was last up by 0.40 percent.
Commodities Recap
Gold prices edged down on Tuesday from the previous session’s near three-week high as equities regained some ground, but concerns the coronavirus outbreak could impact the global economy cushioned safe-haven bullion’s losses.
Spot gold was down 0.2% to $1,578.95 per ounce at 1030 GMT, having touched its highest since Jan. 8 on Monday. U.S. gold futures were up 0.1% to $1,578.60.
Oil futures slipped on Tuesday, extending losses into a sixth session as the spread of a new virus in China and other countries raised concerns about a hit to economic growth and slower oil demand.
Brent crude was down 15 cents, or 0.3%, to $59.17 at around 0114 GMT, after touching a three-month low on Monday at $58.50.
U.S. West Texas Intermediate was down 12 cents, or 0.2%, at $53.02, after slipping to its lowest since early October in the previous session at $52.13.
Treasuries Recap
U.S.: The U.S. Treasuries traded tad down during Tuesday’s afternoon session ahead of the country’s 7-year auction, scheduled to be held today by 18:00GMT. However, of utmost importance will be the Federal Reserve’s monetary policy meeting, due to be concluded on January 29 by 19:00GMT, which shall pave the way for future direction in the debt market. The yield on the benchmark 10-year Treasury yield lost 1 basis point to 1.594 percent, the super-long 30-year bond yield also edged tad 1 basis point down to 2.043 percent and the yield on the short-term 2-year remained 1-1/2 basis points down at 1.419 percent.
UK: The United Kingdom’s gilts remained flat during European trading hours Tuesday ahead of the Bank of England’s (BoE) monetary policy meeting, scheduled to be held on January 30 by 12:00GMT, followed by Governor Mark Carney’s speech, due to be delivered by 12:30GMT on the same day. The yield on the benchmark 10-year gilts, hovered around 0.502 percent, the 30-year yield remained flat at 1.006 percent and the yield on the short-term 2-year too traded steady at 0.399 percent.
EUR: The German bunds remained tad higher during European trading session Tuesday ahead of the country’s unemployment change for the month of January and eurozone’s consumer price inflation (CPI) for the similar period, scheduled to be released on January 30 and 31 by 08:55GMT and 10:00GMT respectively. The German 10-year bond yield, which moves inversely to its price, slipped 1 basis point to -0.397 percent, the long-term 30-year yield suffered nearly 2 basis points to 0.112 percent and the yield on short-term 2-year edged nearly 1 basis point down to -0.637 percent.
AUS: The Australian 10-year bond yield plunged to over 3-month low during Asian session Tuesday as investors remained risk-averse amid the increase in the number of casualties from Coronavirus as well as the number of countries reporting confirmed cases. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 13 basis points, the lowest since October 2019 to 0.964 percent, the yield on the long-term 30-year bond slumped nearly 14 basis points to 1.561 percent while the yield on short-term 2-year suffered 8-1/2 basis points to trade at 0.673 percent.
