Market Roundup
- Eurozone Q4 2018 employment overall flash increase to 158749.6 person vs previous 158311 person
- Eurozone Q4 2018 GDP flash estimate yy stays flat at 1.2 % (forecast 1.2 %) vs previous 1.2 %
- Eurozone Q4 2018 employment flash yy decrease to 1.2 % (forecast 1.2 %) vs previous 1.3 %
- Eurozone Q4 2018 GDP flash estimate qq stays flat at 0.2 % (forecast 0.2 %) vs previous 0.2 %
- Eurozone Q4 2018 employment flash qq increase to 0.3 % (forecast 0.2 %) vs previous 0.2 %
- Switzerland Jan 2019 producer/import price mm decrease to -0.7 % vs previous -0.6 %
- Switzerland Jan 2019 producer/import price yy decrease to -0.5 % vs previous 0.6 %
- Germany Q4 2018 GDP flash yy sa decrease to 0.6 % (forecast 0.7 %) vs previous 1.1 %
- Germany Q4 2018 GDP flash yy nsa decrease to 0.9 % (forecast 0.9 %) vs previous 1.1 %
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that retail sales edged up 0.2 percent in December, similar to its November reading. While excluding autos, retail sales are likely to have gained 0.1 percent, after surging 0.2 percent in the previous month.
- (0830 ET/1330 GMT) The U.S. producer price index is likely to have increased 0.1 percent in January after a 0.1 percent drop in December, while in the 12 months through the same period, it is expected to have advanced 2.1 percent. PPI excluding food and energy probably edged up 0.2 percent after staying flat in December.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 9,000 to a seasonally adjusted 225,000 for the week ended Feb. 8, while continuing claims for the week ended Feb. 1 is expected to increase to 1.740 million from a previous reading of 1.736 million.
- (0830 ET/1330 GMT) Statistics Canada releases manufacturing shipments data for the month of December. Manufacturing sales are likely to have increased 0.2 percent after falling 1.4 percent in November.
- (0830 ET/1330 GMT) Statistics Canada releases its New Housing Price Index (NHPI) for the month of December. The index remained flat in November.
- (1000 ET/1500 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.3 percent in November, after rising 0.6 percent in December.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending February 8.
Key Events Ahead
- (1100 ET/1600 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on "Approaches to Leadership" at Third Annual Lerner MBA Student Association Conference - Newark
- (1200 ET/1700 GMT) Norway Central Bank Governor Oeystein Olsen delivers annual address - Oslo
FX Beat
DXY: The dollar index rallied to an over 8-week peak after Bloomberg reported that U.S. President Donald Trump was considering pushing back by 60 days a March 1 deadline for resolving trade disputes with China. The greenback against a basket of currencies trades 0.1 percent down at 97.13, having touched a high of 97.29 earlier, its highest since December 17. FxWirePro's Hourly Dollar Strength Index stood at -6.91 (Neutral) by 1000 GMT.
EUR/USD: The euro bounced back from a 3-month low after data showed employment in the eurozone rose 0.3 percent quarter-on-quarter in the last three months of 2018 and was 1.2 percent higher than in the same period a year earlier. Moreover, a separate report showed EZ gross domestic product rose 0.2 percent quarter-on-quarter for a 1.2 percent year-on-year increase, in line with preliminary estimates supported the bid tone around the major. The European currency traded 0.1 percent up at 1.1271, having touched a low of 1.1248, its lowest since Nov. 13. FxWirePro's Hourly Euro Strength Index stood at 23.11 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1304 (5-DMA), a break above targets 1.1368 (Feb.7 High).. On the downside, support is seen at 1.1216 (Nov. 13 Low), a break below could drag it till 1.1180.
USD/JPY: The dollar advanced to a 1-1/2 month peak after Chinese export and import data for January came in better-than-expectations, providing some relief that a sign of some recovery in the global economy more generally this year. Investors now await signs of concrete progress in trade talks between Washington and Beijing. The major was trading 0.05 percent up at 111.04, having hit a high of 111.12 earlier, its highest since December 27. FxWirePro's Hourly Yen Strength Index stood at -83.01 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. retail sales, producer price index, unemployment claim benefits and business inventories. Immediate resistance is located at 111.40 (Dec. 26 Low), a break above targets 111.82 (Aug. 29 Low). On the downside, support is seen at 110.27 (5-DMA), a break below could take it lower at 109.60 (Feb. 7 Low).
GBP/USD: Sterling plunged to a fresh 1-month low as investors cautiously awaited a parliamentary debate on Brexit that could provide some clarity over the forthcoming vote on Prime Minister Theresa May's deal with Brussels. The major traded 0.05 percent down at 1.2842, having hit a low of 1.2813 earlier it’s lowest since January 15. FxWirePro's Hourly Sterling Strength Index stood at -54.64 (Bullish) 1000 GMT. Immediate resistance is located at 1.2957 (10-DMA), a break above could take it near 1.3080 (January 23 High). On the downside, support is seen at 1.2800, a break below targets 1.2766 (Nov 22 Low). Against the euro, the pound was trading 0.2 percent down at 87.80 pence, having hit a low of 88.21 last week, it’s lowest since Jan. 22.
USD/CHF: The Swiss franc consolidated near a 3-month low hit earlier in the week, as improved Chinese trade data and hopes of progress in U.S.-China trade talks boosted risk sentiment The major trades flat at 1.0088, having touched a high of 1.0099 on Monday; it’s highest since November 14. FxWirePro's Hourly Swiss Franc Strength Index stood at -78.71 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0111 (November 12 High) and any break above will take the pair to next level till 1.0150. The near-term support is around 0.9961 (January 22 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares rose to a 3-month peak, boosted by strong corporate results and optimism about U.S.-China trade talks.
The pan-European STOXX 600 index rallied 0.4 percent at 366.23 points, while the FTSEurofirst 300 index surged 0.3 percent to 1,439.65 points.
Britain's FTSE 100 trades 0.1 percent up at 7,201.46 points, while mid-cap FTSE 250 eased 0.2 to 18,944.92 points.
Germany's DAX rose 0.1 percent at 11,186.67 points; France's CAC 40 trades 0.5 percent higher at 5,099.56 points
Commodities Recap
Crude oil prices surged by more than 1 percent, boosted by hopes that the U.S.-China tariff dispute could end soon and as China's trade figures including crude imports beat forecasts. International benchmark Brent crude was trading 1.1 percent up at $64.32 per barrel by 1033 GMT, having hit a high of $64.79 earlier, its highest since November 20. U.S. West Texas Intermediate was trading 0.7 percent higher at $54.28 a barrel, after rising as high as $54.58 on Wednesday, its highest since the February 5.
Gold prices steadied as investors awaited developments in trade talks between Washington and Beijing. Spot gold was trading flat at $1,305.68 per ounce by 1036 GMT, having touched a high of $1,318.02 on Wednesday, its highest level since February 4. U.S. gold futures were down 0.2 percent at $1,311.80.
Treasuries Recap
The Euro zone government bond yields were mostly steady with the benchmark German 10-year bonds yields trading close to their lowest levels in over two years. The German 10-year Bund yield was trading at 0.12 percent, while most other 10-year bond yields in the bloc were flat to marginally lower.
The Japanese government bond prices edged higher, with the five-year JGB yield easing 1 basis point to minus 0.165 percent and the 10-year yield dipping half a basis point to minus 0.015 percent.
The Australian government bond futures were slightly firmer, with the three-year bond contract up half a tick at 98.325. The 10-year contract rose 1.5 ticks to 97.865.
The New Zealand government bonds fell, sending yields about 4 basis points higher across the curve.
