Europe Roundup: Sterling gains on upbeat UK services PMI data,European shares surge,Gold near two-week low, Oil jumps 3% on reports of effective coronavirus drug-February 5th,2020

Market Roundup

•Italian Jan Composite PMI  50.4, 49.3 previous    

• Italian Jan  Services PMI  51.4, 50.2 forecast, 51.1 previous    

• French Jan Markit Composite PMI  51.1, 51.5 forecast, 52.0 previous

• French Jan Services PMI  51.0, 51.7 forecast, 52.4 previous

• German Jan Composite PMI 51.2, 51.1 forecast,  52.0 previous    

• French Jan Services PMI 51.0, 51.7 forecast, 52.4 previous    

• German Jan Composite PMI  51.2, 51.1 forecast, 50.2 previous  
 
• German Jan  Services PMI  54.2, 54.2 forecast, 52.9 previous

• Russian Feb Forex Intervention 214.2B, 232.5B forecast, 309.9B previous

• EUR Jan Markit Composite PMI  51.3, 50.9 forecast, 50.9 previous

• EUR Jan Services PMI  52.5, 52.2 forecast, 52.8    previous

• UK Jan Composite PMI  53.3, 52.4 forecast, 49.3 previous

• UK Jan Services PMI  53.9, 52.9 forecast, 50.0 previous

• EUR Dec Retail Sales (YoY)  1.3%, 2.4%    forecast, 2.3% previous    

• EUR Dec Retail Sales (MoM) -1.6%, -0.9% forecast, 0.8% previous    

Looking Ahead - Economic Data (GMT)

• US Jan ADP Nonfarm Employment Change  156K forecast, 202K previous    
    
• 13:30 US Exports 209.00B previous

• 13:30 US Imports 252.00B previous    

• 13:30 US Trade Balance -48.20B forecast, -43.10B previous

• 13:30 Canada Dec Exports 50.10B forecast, 48.70B previous    

•13:30 Canada Dec Imports  50.30B forecast, 49.78B previous

•14:45 US Jan Markit Composite PMI  53.1 forecast, 52.7 previous
    
• 14:45 US Jan Services PMI  53.2 forecast, 52.8 previous    

• 15:00 US Jan ISM Non-Manufacturing Business Activity 56.5 forecast, 57.2 previous    

• 15:00 US Jan ISM Non-Manufacturing Employment 55.2 previous    

• 15:00 US Jan ISM Non-Manufacturing New Orders  54.9 previous

• 15:00 US Jan ISM Non-Manufacturing PMI  55.0 forecast, 55.0 previous

Looking Ahead - Events, Other Releases (GMT)    

• 17:30 Canada BoC Gov Council Member Wilkins Speaks    

Currency Summaries

EUR/USD: The euro declined against the U.S. dollar on Wednesday, as investors regained their confidence in the market after an outbreak of coronavirus in China. The newly identified coronavirus has created alarm because it is spreading quickly and there is little known about it. The death toll rose sharply to 132 on Wednesday, with nearly 1,500 new cases identified for a total of nearly 6,000.The euro was down 0.26 percent at $1.1015. Immediate resistance can be seen at 1.1036 (9 DMA), an upside break can trigger rise towards 1.1077 (21 DMA).On the downside, immediate support is seen at 1.1000 (Psychological level), a break below could take the pair towards 1.0990 (29th Jan low).

GBP/USD: Sterling strengthened against dollar on Wednesday after better-than-expected service activity data offset fears of a hard Brexit. The IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) rose to 53.9 January, a full point higher than a preliminary reading for the month and up from 50.0 in December. It was the strongest reading since September 2018 and higher than all forecasts in a Reuters poll of economists, which had pointed to a reading of 52.9. The pound fell 0.1% against the U.S. dollar to $1.3017. It was up 0.1% against the euro at 84.50 pence. Immediate resistance can be seen at 1.3060 (21 DMA), an upside break can trigger rise towards 1.3100 (Psychological level).On the downside, immediate support is seen at 1.2935 (Feb 4th low), a break below could take the pair towards 1.2900 (Psychological level).

USD/CHF: The dollar strengthened against the Swiss franc on Wednesday, as China’s responses to the coronavirus outbreak decreased demand for safe haven assets . Gains for riskier currencies translated into weakness for currencies perceived as safe-havens such as the Japanese yen and the Swiss franc with both of them weakening against the dollar. At( GMT 12:43),Greenback edged higher 0.42% versus the Swiss franc to 0.9732. Immediate resistance can be seen at 0.9770(50 DMA), an upside break can trigger rise towards 0.9800  (Psychological level).On the downside, immediate support is seen at 0.9611 (Jan 16th low), a break below could take the pair towards 0.9600 (Psychological level).

USD/JPY: The dollar strengthened against the Japanese yen on Wednesday, as reports of medical breakthroughs in the fight against the new coronavirus boosted greenback. Media reported that a Chinese university had found a drug to treat people with the virus, while researchers in Britain had made a “significant breakthrough” in finding a vaccine. Strong resistance can be seen at 109.33 (Dec 20th high), an upside break can trigger rise towards 110.00 (Psychological level).On the downside, immediate support is seen at 109.68(100 DNA), a break below could take the pair towards 109.00 (Psychological level). 

Equities Recap

European shares on Wednesday jumped more than 1% after media reports of significant breakthroughs in treating people affected with the new coronavirus, with a slate of upbeat earnings reports also lifting the mood.

At (GMT 12:56),UK's benchmark FTSE 100 was last trading higher at 0.58 percent, Germany's Dax was up by 1.36 percent, France’s CAC finished was up by 0.98 percent.

Commodities Recap

Gold prices steadied after touching their lowest in two weeks on Wednesday, as reports of drug breakthroughs in treating the coronavirus lifted European shares and dented some of bullion’s safe haven appeal.

Spot gold inched 0.1% lower at $1,551.38 per ounce by 1103 GMT, having fallen to its lowest since Jan. 21 at $1,546.90. U.S. gold futures were flat at $1,555.50.

Oil prices jumped by more than 3% on Wednesday on media reports that scientists have developed an drug against the fast-spreading coronavirus that continued to weigh heavily on global economic activity.

Brent crude oil futures and U.S. West Texas Intermediate (WTI) crude jumped by more than 3% in morning trade. By 1220 GMT Brent was up $1.35, or 2.5%, at $55.31 a barrel and (WTI) was up $1.25, or 2.5%, at $50.86.

Treasuries Recap

U.S.: The U.S. Treasuries continued to suffer losses during Wednesday’s afternoon session ahead of the country’s ADP non-farm employment for the month of January, scheduled to be released today by 18:45GMT, besides, the ISM non-manufacturing PMI for the similar period, also due later today. The yield on the benchmark 10-year Treasury yield jumped 3-1/2 basis points to 1.635 percent, the super-long 30-year bond yield surged 3 basis points to 2.109 percent and the yield on the short-term 2-year gained 2 basis points to trade at 1.435 percent.

EUR: The German bunds suffered during European trading session Wednesday even as the eurozone’s retail sales for the month of December, released today disappointed market sentiments, also reversing previous gains in November ahead of the European Central Bank (ECB) President Christine Lagarde’s speech, also due to be delivered today by 12:15GMT. The German 10-year bond yield, which moves inversely to its price, jumped nearly 3-1/2 basis points to -0.372 percent, the long-term 30-year yield also surged nearly 3-1/2 basis points to 0.144 percent and the yield on short-term 2-year remained tad 1 basis point higher at -0.643 percent.

AUS: The Australian bonds plunged during Asian session Wednesday tracking a similar movement in the United States’ Treasuries after Chinese equities experienced a rebound, following their biggest selloff since 2015 after the outbreak of the deadly Coronavirus. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 11-1/2 basis points to 1.034 percent, the yield on the long-term 30-year bond surged 11 basis points to 1.631 percent and the yield on short-term 2-year gained over 9 basis points to trade at 0.746 percent.