Market Roundup
• Swiss Jan Unemployment Rate n.s.a 2.6%,2.4% forecast, 2.5% previous
• Swiss Jan Unemployment Rate s.a. 2.3%,2.3% forecast, 2.3% previous
• Swiss Jan CPI (MoM) -0.2%, -0.2% forecast, 0.0% previous
• Italian Dec Industrial Production (MoM) -2.7% , -0.5% forecast, 0.1% previous
• Italian Dec Industrial Production (YoY) -4.3%,-0.2% forecast, -0.8% previous
Looking Ahead - Economic Data (GMT)
• 12:55 Canada Jan Housing Starts 205.0K forecast, 197.3K previous
• 13:30 Canada Dec Building Permits (MoM) 1.5% forecast, -2.4% previous
• 15:00 US Jan CB Employment Trends Index 109.70 previous
• 16:30 US 3-Month Bill Auction 1.550% previous
Fx Beat
EUR/USD: The euro edged lower against the U.S. dollar on Monday, as concerns over the economic impact of the coronavirus outbreak weighed. Death toll from a coronavirus outbreak exceeded the SARS epidemic of two decades ago. More than 900 people have so far died mainly in China’s central Hubei province as of Sunday with most of the new deaths in the provincial capital of Wuhan, the epicentre of the outbreak. The euro was down 0.02 percent at $1.1138. Immediate resistance can be seen at 1.0984 (Daily High), an upside break can trigger rise towards 1.1015 (11 DMA).On the downside, immediate support is seen at 1.0933 (Lower BB), a break below could take the pair towards 1.0900 (Psychological level).
GBP/USD: Sterling recovered ground against dollar on Monday, as investors moved back into a currency that was hit last week by concern over trade talks between Britain and the European Union. The pound last week posted its biggest weekly fall against the dollar in seven weeks as investors priced in the risk of Britain failing to agree a trade deal with the European Union in the 11 months left of the Brexit transition period. Having dipped in early Monday trade to a 2-1/2 month low of $1.2873, sterling soon rebounded and was last 0.35% firmer on the day at $1.2924. Immediate resistance can be seen at 1.2950 (5 DMA), an upside break can trigger rise towards 1.3009 (11 DMA).On the downside, immediate support is seen at 1.2851 (Lower BB), a break below could take the pair towards 1.2800 (Psychological level).
USD/CHF: The dollar strengthened against the Swiss franc on Monday, as investors expected the U.S. economy to remain resilient to the spread of the coronavirus across the world. Market participants were more positive about riskier currencies amid hints that the spread of the coronavirus could be slowing down and as some big businesses resumed work in China after the Lunar New Year break. Greenback gained 0.1% versus the Swiss franc to 0.9772. Immediate resistance can be seen at 0.9789 (Higher BB), an upside break can trigger rise towards 0.9800 (Psychological level).On the downside, immediate support is seen at 0.9746 (5 DMA), a break below could take the pair towards 0.9713 (11 DMA).
USD/JPY: The dollar strengthened against the Japanese yen on Monday, as investors remained on side-lines as the death toll from a coronavirus outbreak exceeded the SARS epidemic of two decades ago. To contain the spread, China’s government had ordered lockdowns, cancelled flights and shut schools in many cities. But on Monday, workers began trickling back to offices and factories though a large number of workplaces remain closed and many white-collar workers will continue to work from home. Strong resistance can be seen at 110.02 (7th Feb high), an upside break can trigger rise towards 110.58 (Higher BB).On the downside, immediate support is seen at 109.30 (Daily low), a break below could take the pair towards 109.27 (11 DMA).
Equities Recap
European shares inched lower on Monday as concerns over the economic impact of the coronavirus outbreak weighed on sentiment, while markets also came off a rally from last week.
At (GMT 12:50),UK's benchmark FTSE 100 was last trading lower at 0.15 percent, Germany's Dax was down by 0.26 percent, France’s CAC finished was down by 0.35 percent.
Commodities Recap
Gold prices held steady on Monday as rising concerns over the severity of the coronavirus outbreak offset a slight reprieve for equities after China eased some work and travel restrictions.
Spot gold was little changed at $1,570.64 per ounce by 0628 GMT. U.S. gold futures were slightly up at 0.1% to $1,574.50.
Oil prices slipped on Monday on weaker Chinese oil demand in the wake of the coronavirus outbreak and as traders waited to see if Russia would join other producers in seeking further output cuts.
Brent crude slipped to $54.27 a barrel by 1145 GMT, down 20 cents or 0.4%. U.S. West Texas Intermediate fell 18 cents or 0.4% to $50.14 a barrel.
Treasuries Recap
U.S.: The U.S. Treasuries remained flat during Monday’s afternoon session ahead of a host of speeches by members of the Federal Open Market Committee (FOMC), Bowman and Harker, both scheduled to be delivered today by 13:15GMT and 20:15GMT respectively. However, this week holds a couple of data releases, accompanied by Federal Reserve Chair Jerome Powell’s testimony, which will add direction to the bonds market. The yield on the benchmark 10-year Treasury yield hovered around 1.578 percent, the super-long 30-year bond yield remained flat at 2.041 percent and the yield on the short-term 2-year remained tad down at 1.393 percent.
EUR: The German bunds jumped during European trading session Monday ahead of the European Central Bank (ECB) President Christine Lagarde’s speech, scheduled to be delivered on February 11 by 14:00GMT, besides, the country’s gross domestic product (GDP) for the fourth quarter of this year, due by later this week, which shall provide further direction to the debt market. The German 10-year bond yield, which moves inversely to its price, slumped 2 basis points to -0.401 percent, the long-term 30-year yield also lost nearly 2 basis points to 0.122 percent and the yield on short-term 2-year slipped a little over 1 basis point to -0.647 percent.
AUS: The Australian bonds jumped during Asian session of the first trading day of the week Monday as investors continued to crowd into safe-haven assets amid a continued increase in China’s death tolls emerging from Coronavirus. Later this week, Reserve Bank of Australia’s (RBA) Governor Philip Lowe is scheduled to deliver a speech, which shall impart further direction to the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped nearly 3-1/2 basis points to 1.033 percent, the yield on the long-term 30-year bond also plunged 3-1/2 basis points to 1.623 percent and the yield on short-term 2-year lost nearly 2-1/2 basis points to trade at 0.734 percent.
