Market Roundup
- GBP/USD -0.01%, EUR/USD -0.42%, USD/CHF +0.2%
- DXY +0.1%, DAX +0.06%, Brent -0.2%, Gold +0.2%
- Germany FinMin Schaeuble: EUR rate too weak for Germany – Tagesspiegel
- Dollar stabilizes after fourth straight weekly fall
- AUD/USD -0.4% after weak batch of retail sales numbers
- Australia Jan Retail sales -0.1% m/m, +0.3% forecast
- Eurozone Feb SENTIX index 17.4 vs previous 18.2. 17.4 forecast
- Germany Dec Industrial orders 5.2% vs previous -3.6% revised 0.5% forecast
- SNB Maechler: no "magic number" for franc exchange rate
- Switzerland domestic sight deposits at 462.994 billion w/e Feb 3 vs 466.714 billion previous
- France Fillon under pressure to quit presidential bid as fake work row rages
- ForMin Gabriel: Give Italy, France, Portugal time to cut deficits – ARD
- Thousands protest as former Catalonia head starts referendum trial
- German Finmin spokesman: Greek bailout programme would end if IMF was to pull out
Economic Data Ahead
- (1000 ET/1500 GMT) The Fed releases its labor market conditions index (LMCI) for the month of January. The indicator posted a decline of 0.3 in the previous month.
- (1830 ET/ 2330 GMT) The Australian Industry Group (AiG) releases its Performance of Construction Index for the month of January. The index stood at 47 in the month of December.
Key Events Ahead
- (0900 ET/1400 GMT) ECB Pres Draghi speaks at Brussels parliamentary ECON hearings open.
- (1145 ET/1645 GMT) FedTrade operation 30-yr Fannie Mae/Freddie Mac (max $1.625 bn)
- (1630 ET/2130 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker gives his views and outlook on rate hikes before the Global Interdependence Center (GIC) "Payment Systems in the Internet Age" program, in San Diego, California.
FX Beat
DXY: The dollar rebounded across the board amid risk on market profile. The greenback against a basket of currencies trades 0.3 percent up at 100.01, drifting away from a low of 99.23 hit last week, its lowest since Nov. 14. FxWirePro's Hourly Dollar Strength Index stood at 14.76 (Neutral) by 1100 GMT.
EUR/USD: The euro tumbled as the greenback gained significant strength across the board, recovering from downbeat U.S. jobs report led slide. Markets seem to have ignored upbeat Eurozone Sentix investor confidence figures, which came in at 17.4 in February, in line with estimates. The European currency traded 0.5 percent down at 1.0734, after rising as high as 1.0828 on Thursday, it’s highest since Dec. 8. FxWirePro's Hourly Euro Strength Index stood at -56.11 (Bearish) by 1000 GMT. Immediate resistance is located at 1.0800, a break above targets 1.0840 (Nov 14-High). On the downside, support is seen at 1.0777 (5 DMA), a break below could drag it near 1.0700.
USD/JPY: The dollar rebounded from a 3-day low of 112.22 against the yen, as positive sentiment in equity markets, weakened the bid tone around the Japanese safe-haven yen. However, the recovery appears to remain fragile as declining U.S. Treasury yields and fading expectations of March Fed rate-hike dampened investors sentiment. The pair trades up at 112.56, after falling as low as 112.05 on Thursday, it’s lowest since Nov 30. FxWirePro's Hourly Yen Strength Index stood at 95.17 (Slightly Bullish) by 1000 GMT. Immediate resistance is located at 113.00 (5-DMA), a break above targets 113.42 (10-DMA). On the downside, support is seen at 112.05 (Feb 2 Low), a break below could take it lower 112.00.
GBP/USD: Sterling slumped to a 1-week low against the dollar, as Prime Minister Theresa May faced challenges over her legislative plan for Brexit. Sterling trades lower at 1.2478, after declining to a low of 1.2449 earlier in the session, it’s weakest since Jan. 31. FxWirePro's Hourly Sterling Strength Index stood at -53.87 (Bearish) by 1000 GMT. Immediate resistance is located at 1.2655 (10-DMA), a break above could take it near 1.2600. On the downside, support is seen at 1.2412 (Jan-31 Low), a break below targets 1.2400. Against the euro, the pound trades 0.3 percent up at 86.06 pence, having hit a low of 86.44 earlier in the day, it’s weakest since Jan. 24.
USD/CHF: The Swiss franc declined, after rising for two consecutive sessions as the U.S. dollar rebounded across the board, amid risk-on market sentiment. The major trades 0.3 percent up at 0.9947, having touched a high of 0.9988 on Friday, it’s highest since Jan. 30. FxWirePro's Hourly Swiss Franc Strength Index stood at -103.82 (Highly Bearish) by 1000 GMT. On the higher side, upside might be capped by 0.9990 and any break above will take the pair till 1.000/1.0446 (30th Jan High). The low formed on 31st Jan will be acting as major support and any break below targets 0.9799 (61.8% retracement of 0.95493 and 1.03435)/0.9750.
AUD/USD: The Australia dollar declined, reversing some of its previous session gains, after data showed Australian monthly retail sales unexpectedly fell 0.1 percent in December, registering its first contraction in five months. The Aussie trades 0.2 percent down at 0.7662, drifting away from a high of 0.7696 touched on Thursday, it’s strongest since Nov. 10. FxWirePro's Hourly Aussie Strength Index stood at 47.43 (Neutral) by 1100 GMT. Immediate support is seen at 0.7611 (10-DMA), a break below could drag it lower 0.7600. On the upside, resistance is located at 0.7700, a break above targets 0.7750.
NZD/USD: The New Zealand rose, extending gains for a third straight session on the views that the New Zealand economy is performing well and in the absence of political uncertainties. The Kiwi trades 0.04 percent up at 0.7312, hovering towards a peak of 0.7350 touched on Tuesday, its strongest since Nov. 9. FxWirePro's Hourly Kiwi Strength Index was at 84.32 (Slightly Bullish) by 1100 GMT. Immediate resistance is located at 0.7350, a break above could take it near 0.7400. On the downside, support is seen at 0.7275 (10-DMA), a break below could drag it near 0.7200.
Equities Recap
European shares edged up, with precious metals miners underpinned by higher gold prices, while the dollar slightly recovered, amid global economic and political uncertainties.
The pan-European STOXX 600 index increased 0.15 percent to 364.60 points, while the FTSEurofirst 300 index rallied 0.2 percent to 1,439.28 points.
Britain's FTSE 100 trades advanced 0.22 percent to 7,203.93 points, while mid-cap FTSE 250 tumbled 0.12 percent to 18,388.78 points.
Germany's DAX edged up 0.03 percent at 11,654.90 points; France's CAC 40 trades 0.22 percent higher at 4,836.96 points.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.
Tokyo's Nikkei rose 0.31 percent to 18,976.71 points, Australia's S&P/ASX 200 index fell 0.08 percent to 5,617.10 points and South Korea's KOSPI edged up 0.22 percent to 2,077.66 points.
Shanghai composite index climbed 0.5 percent to 3,156.98 points, while CSI300 index advanced 0.3 percent at 3,373.21 points. Hong Kong’s Hang Seng added 1.0 percent at 23,348.24 points.
Commodities Recap
Crude oil prices rose, extending gains for the fifth consecutive session, as concerns that new U.S. sanctions against Iran could affect crude supplies boosted market sentiment. International benchmark Brent crude was trading 0.02 percent higher at $56.78 per barrel by 0943 GMT, having hit a high of $57.41 last week, it’s strongest since Jan. 3. U.S. West Texas Intermediate crude traded flat at $53.72 a barrel, after climbing to a high of $54.31 on Thursday, its highest since Jan. 3.
Gold prices advanced, extending gains for the third consecutive session, as the dollar weakened on mixed U.S. jobs data released late last week, which slashed expectations for near-term interest rate hikes. Spot gold was trading 0.2 percent higher at $1,222.96 per ounce by 0956 GMT, having hit a high of $1,225.12 on Thursday, its highest since Nov. 17. U.S. gold futures rose 0.4 percent to $1,225.45 per ounce.
Treasuries Recap
The U.S. Treasuries jumped following a rise in the rate of unemployment that offset the better-than-expected non-farm payrolls data for the month of January. The yield on the benchmark 10-year Treasury plunged 3-1/2 basis points to 2.45 percent, the super-long 30-year bond yield fell 2-1/2 basis points to 3.08 percent while the yield on short-term 2-year note traded 2-1/2 basis points lower at 1.18 percent.
The UK gilts begun the week on a flat trading note amid subdued session that witnessed data of little economic significance. The yield on the benchmark 10-year gilts, fell 1/2 basis point to 1.35 percent, the super-long 30-year bond yields remained flat at 2.02 percent and the yield on short-term 2-year hovered around 0.11 percent.
The German government bunds rebounded ahead of the 30-year auction, scheduled to be held on February 8 amid a timid trading session that lacked release of significant economic data. The yield on the benchmark 10-year bond, fell over 1 basis point to 0.40 percent, the long-term 30-year bond yields remained flat at 1.17 percent and the yield on short-term 2-year bond slipped 1/2 basis point to -0.74 percent.
The Japanese government bonds traded modestly lower, as investors shifted away from safe-haven assets amid a silent trading session that witnessed data of least economic significance and rise in riskier assets including equities and crude oil. The benchmark 10-year bond yield, hovered around 0.09 percent, while the long-term 30-year bond yields jumped nearly 4 basis points to 0.90 percent and the yield on the short-term 2-year note rose nearly 1 basis point to -0.21 percent.
The Australian bonds snapped decline at the start of the week, following surprise tumble in the country’s retail sales during the month of December. The yield on the benchmark 10-year Treasury note, plunged nearly 2-1/2 basis points to 2.78 percent, the yield on 15-year note also slumped 2-1/2 basis points to 3.24 percent and the yield on short-term 2-year fell 2 basis points to 1.83 percent.
