Market Roundup
•UK Jan CPI (YoY) 4.0%, 4.1%forecast,4.0% previous
•UK Jan CPI (MoM) -0.6%,-0.3% forecast,0.4% previous
•UK Jan CPI n.s.a 131.50,132.20 previous
•UK Jan CPI Core CPI (MoM) -0.9%,-0.8% forecast,0.6% previous
•UK Jan Core CPI (YoY) 5.1%,5.2% forecast,5.1% previous
•UK Jan PPI Input (MoM) -0.8%, 0.1% forecast, -1.2% previous
•UK Jan PPI Output (MoM) -0.2%,-0.2% forecast,-0.1% previous
•UK Jan PPI Input (YoY) -3.3%,-3.0% forecast,-2.8% previous
•UK Jan PPI Output (YoY) -0.6%, -0.5% forecast,0.1% previous
•EU Employment Overall (Q4)167,479.4K,166,966.2K previous
•EU GDP (YoY) (Q4)0.1%,0.1% forecast,0.0% previous
•EU Dec Industrial Production (MoM) 2.6%,-0.2% forecast,-0.3% previous
•EU Dec Industrial Production (YoY) 1.2%,-4.1% forecast,-6.8% previous
•EU Employment Change (YoY)1.3%,1.1% forecast,1.3% previous
•EU Employment Change (QoQ) 0.3%,0.3% forecast,0.2% previous
•EU GDP (QoQ) 0.0%,0.0% forecast,-0.1% previous
Looking Ahead Economic Data (GMT)
•13:30 Canada New Motor Vehicle Sales (MoM) 143.7K previous
•15:30 US Cushing Crude Oil Inventories -0.033M previous
•15:30 US Crude Oil Inventories 3.300M forecast,5.521M previous
•15:30 US Gasoline Inventories-1.160M forecast,-3.145M previous
•15:30 US Heating Oil Stockpiles-0.222M previous
•15:30 US Distillate Fuel Production-0.028M previous
•15:30 US Gasoline Production -0.270M previous
Looking Ahead Events And Other Releases(GMT)
• 21:00 US Fed Vice Chair for Supervision Barr Speaks
Currency Forecast
EUR/USD: The euro edged higher on Wednesday after as investors digested slew of euro zone economic data. Euro zone employment rose by 0.3% quarter-on-quarter and by 1.3% year-on-year in the fourth quarter. According to a Reuters poll, employment had been expected to rise 0.2% quarter-on-quarter and 1.1% year-on-year.Economic growth in the region was flat in the last three months of 2023 against the previous quarter and up 0.1% against the same period of 2022. Investors will now focus on U.S. retail sales data due on Thursday and producer price index numbers due on Friday. At least five Fed officials are due to speak this week. Immediate resistance can be seen at 1.1165(23.6%fib), an upside break can trigger rise towards 1.1281 (Jul 20th high).On the downside, immediate support is seen at 1.0701(23.6%fib), a break below could take the pair towards 1.0688 (Lower BB).
GBP/USD: The pound declined on Wednesday after data showed UK inflation did not accelerate in January as expected, possibly relieving some of the pressure on the Bank of England to keep rates where they are for longer. British inflation unexpectedly held steady at 4.0% in January, defying forecasts of a rise, official data showed, offering relief for the Bank of England (BoE) and Prime Minister Rishi Sunak too ahead of a national election expected this year.Economists polled by Reuters had expected an increase in the annual rate to 4.2%.Consumer price inflation - which surged as high as a 11.1% in October 2022 - is expected to fall further in the coming months, paving the way for the BoE to start cutting borrowing costs from their 16-year high. Immediate resistance can be seen at 1.2600(38.2%fib), an upside break can trigger rise towards 1.2649 (50%fib).On the downside, immediate support is seen at 1.2542(23.6%fib), a break below could take the pair towards 1.2511(Lower BB).
USD/CHF: The dollar eased against the Swiss franc on Wednesday as traders pushed back bets for a Federal Reserve interest rate cut following surprisingly hot U.S. inflation figures.Data on Tuesday showed U.S. consumer prices rose more than expected in January, at a 3.1% annual rise, above forecasts of a 2.9% increase.Traders now see three 25-basis-point rate cuts in 2024, down from four, in line with the Fed's "dot plot" released in December. The Fed may wait until June before cutting interest rates.According to the CME Fed Watch Tool, opens new tab, traders now expect around 78% chance of a rate cut in June. Immediate resistance can be seen at 0.8877 (Higher BB), an upside break can trigger rise towards 0.8945(23.6%fib).On the downside, immediate support is seen at 0.8833(38.2%fib), a break below could take the pair towards 0.8743(50%fib).
USD/JPY: The dollar eased against yen on Wednesday after top Japan's currency officials warned against what they described as rapid and speculative yen moves. Japan's top currency diplomat Masato Kanda said the nation would take appropriate actions on forex if needed.The dollar fell 0.1% against the yen to 150.60, and was not too far from a three-month high reached against the Japanese currency on Tuesday. The dollar has added about 10 yen in price since the start of this year.Japan intervened in the currency market three times in 2022 when the yen plunged to 32-year lows near 152 yen to the dollar, conducting rare dollar-selling, yen-buying intervention. Strong resistance can be seen at 151.02 (23.6%fib) an upside break can trigger rise towards 151.40(Nov 15th high).On the downside, immediate support is seen 150.00(Psychological level), a break below could take the pair towards 149.59(38.2%fib )
Equities Recap
European shares edged higher on Wednesday as a softer-than-expected UK inflation boosted hopes of imminent interest-rate cuts by the Bank of England, while investors awaited more economic data from euro zone later in the day.
At (GMT 13:34 ),UK's benchmark FTSE 100 was last trading up at 0.87 percent, Germany's Dax was up by 0.35 percent, France’s CAC finished was up by 0.62 percent.
Commodities Recap
Gold prices extended declines on Wednesday, languishing below the key $2,000-per-ounce mark, pressured by a stronger-than-expected U.S. inflation report that caused investors to pull back on bets of rate cuts by the Federal Reserve.
Spot gold fell 0.1% to $1,991.10 per ounce as of 1130 GMT its lowest since Dec. 13. Bullion fell about 1.4% on Tuesday, its biggest daily loss since Dec. 4.
Oil prices were little changed on Wednesday, holding on to Tuesday's gains on a robust demand growth forecast from OPEC and a sharp decline in U.S. fuel stocks.
Brent crude futures rose by 12 cents, or 0.14%, to $82.89 a barrel by 1235 GMT. U.S. West Texas Intermediate (WTI) crude futures were up 5 cents, or 0.06%, at $77.92.
