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Europe Roundup: Sterling rallies after upbeat UK jobs data, European shares falls, Gold eases, Oil prices slide as supply concerns fade-January 21st,2020

Market Roundup

• Spanish Trade Balance -1.86B, -2.58B previous    

• UK Nov Average Earnings ex Bonus  3.4%,3.4% forecast, 3.5% previous
    
• UK Nov Average Earnings Index +Bonus  3.2%,3.1% forecast, 3.2% previous 
   
• UK Dec Claimant Count Change  14.9K, 22.6K forecast, 14.9K previous

• UK Nov Employment Change 3M/3M (MoM)  208K, 110K forecast, 24K previous

• UK Nov Unemployment Rate  3.8%,3.8% forecast, 3.8%  previous

• German Jan ZEW Current Conditions  -9.5, -13.5 forecast, -19.9  previous

• German Jan ZEW Economic Sentiment  26.7, 15.0 forecast, 10.7 previous

• German Jan ZEW Economic Sentiment  25.6, 5.5 forecast, 11.2 previous

Looking Ahead - Economic Data (GMT)  
 
• 13:30 Canada Nov Manufacturing Sales (MoM)  -0.3% forecast, -0.7%  previous  
 
• 13:55 US Redbook (YoY) 5.0% previous        
• 13:55 US Redbook  (MoM) -0.2% previous

•15:20 New Zealand GlobalDairyTrade Price Index -0.3% forecast, 2.8% previous  
     
• 14:00 Belgium Jan Consumer Confidence  -8 previous

Fx Beat

EUR/USD: The euro rose against the U.S. dollar on Tuesday, after survey showed mood among German investors brightened far more than expected in January on hopes that Europe’s largest economy might not be as badly affected by trade tensions as previously thought. The ZEW research institute said its monthly survey showed economic sentiment among investors rose to 26.7 from 10.7 in December. Economists had expected an increase to 15.0. Investors are now awaiting the ECB’s monetary policy meeting on Thursday, where it is expected to keep the deposit rate unchanged at -0.50%. Immediate resistance can be seen at 1.1114 (5 DMA), an upside break can trigger rise towards 1.1134 (21 DMA).On the downside, immediate support is seen at 1.1065 (100 DMA), a break below could take the pair towards 1.1000 (Psychological level).

GBP/USD: Sterling strengthened against dollar on Tuesday, after the British economy created jobs at its strongest rate in nearly a year in the three months to November, potentially undermining the case for a Bank of England interest rate cut next week. Tuesday’s reading showed the number of people in employment rose by 208,000 to 32.90 million, the biggest increase since the three months to January 2019 and much stronger than the median forecast in a poll for a rise of 110,000.The pound rose as much as 0.3% to $1.3050, after the data was released. Immediate resistance can be seen at 1.3067 (21 DMA), an upside break can trigger rise towards 1.3125 (Jn 17th high).On the downside, immediate support is seen at 1.2963 (Jan 20th Low), a break below could take the pair towards 1.2910 (Lower BB).

USD/CHF: The dollar declined against the Swiss franc on Tuesday, as the spread of a pneumonia-like virus in China sparked a sudden bout of risk aversion and rattled world markets. China reported a fourth death from a new coronavirus as the number of cases continued to rise, just as hundreds of millions of Chinese prepared to travel for the Lunar New Year holiday.At (GMT 11:41), The Swiss franc  firmed a touch at 0.9671 to the dollar. Immediate resistance can be seen at 0.9715 (21 DMA), an upside break can trigger rise towards 0.9761 (Jan 9th high).On the downside, immediate support is seen at 0.9665 (5 DMA), a break below could take the pair towards 0.9613 (Lower BB).

USD/JPY: The dollar dipped against the Japanese yen on Tuesday, as mounting concerns about a new strain of coronavirus in China sparked risk aversion through markets. Safe-haven yen gained as investors were reminded of the economic damage done by the SARS virus in 2002-2003, particularly given the threat of contagion as hundreds of millions travel for the Lunar New Year holidays. Japan’s yen picked up a bid on the safe-haven move and the dollar dipped to 110.06 from an early 110.18. The dollar index was steady at 97.638 against basket of currencies, just off a four-week high of 97.729. Strong resistance can be seen at 110.30 (Jan 17th High), an upside break can trigger rise towards 111.00 (Psychological level).On the downside, immediate support is seen at 109.71 (5 DMA), a break below could take the pair towards 109.53 (11 DMA). 

Equities Recap

European shares slipped lower on Tuesday, as mounting concerns over a new coronavirus outbreak originating in China sparked a rush to safe-haven bets.    

At (GMT 12:15),UK's benchmark FTSE 100 was last trading lower at 0.80 percent, Germany's Dax was down by 0.10 percent, France’s CAC was last down by 0.66 percent.

Commodities Recap

Gold fell on Tuesday, easing off a two-week peak, as the dollar steadied near a one-month high, although fears of the economic fallout from the coronavirus in China dulled risk sentiment and kept prices supported above the $1,500 an ounce level.

Spot gold was down 0.4% to $1,555.59 per ounce at 1042 GMT, after hitting its highest since Jan. 8 at $1,568.35 earlier in the session. U.S. gold futures fell 0.3% to $1,555.70 per ounce.

Oil prices fell more than 1% on Tuesday on expectations that a well-supplied market would be able to absorb disruptions that have cut Libya’s crude production to a trickle.

Brent crude   was down 92 cents at $64.28 a barrel by 1016 GMT, having risen to its highest in more than a week on Monday. U.S. West Texas Intermediate crude   was down 59 cents at $57.95.
 

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