Market Roundup
• UK Jan Construction PMI 48.4, 46.6 forecast, 44.4 previous
• Italian Jan CPI (MoM) 0.2%,0.1% forecast, 0.2% previous
• Italian Jan CPI (YoY) 0.6%,0.5% forecast, 0.5% previous
• Italian Jan HICP (YoY) 0.5%,0.5% forecast, 0.5% previous
• EU Dec PPI (MoM) 0.0%,0.3% forecast, 0.1% previous
• EU Dec PPI (YoY) -0.7%,-0.7% forecast, -1.4% previous
• Brazil Dec Industrial Production (MoM) -0.7%,-0.5% forecast, -1.2% previous
• Brazil Dec Industrial Production (YoY) -1.2%,-0.8% forecast, -1.7% previous
Looking Ahead - Events, Other Releases (GMT)
• 13:55 Redbook (MoM) 0.1% previous
• 13:55 Redbook (YoY) 5.5% previous
• 14:45 US ISM NY Business Conditions 39.1% previous
•14:45 US Jan ISM-New York Index 869.0 previous
•15:00 US Dec Durables Excluding Defense (MoM) -2.5% previous
•15:00 US Dec Factory Orders (MoM) 1.2% forecast, -0.7% previous
•15:20 New Zealand GlobalDairyTrade Price Index 1.7% previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Fx Beat
EUR/USD: The euro dipped against the U.S. dollar on Tuesday, investors opted for riskier assets after China took steps to relieve pressure on its economy from the impact of the coronavirus epidemic. Despite the relative market calm on Tuesday, the outbreak continued to generate unnerving headlines with Hong Kong reporting its first coronavirus death the second fatality outside mainland China as the overall death toll reached 427.The euro was down 0.13 % versus the U.S. currency at $1.1043.Immediate resistance can be seen at 1.1069 (100 DMA), an upside break can trigger rise towards 1.1100 (Psychological level).On the downside, immediate support is seen at 1.1040 (9 DMA), a break below could take the pair towards 1.0994 (Lower BB).
GBP/USD: Sterling fell to a six-week low against a broadly firmer dollar on Tuesday, as Prime Minister Boris Johnson’s tough stance on European Union trade talks renewed concern that a deal may not be reached by the end of a transition period.The EU and Britain clashed over a post-Brexit trade deal on Monday, with the two sides setting out very different visions of a future relationship that could result in the most distant of ties. Immediate resistance can be seen at 1.3058 (5 DMA), an upside break can trigger rise towards 1.3100 (Psychological level).On the downside, immediate support is seen at 1.2940 (Daily low), a break below could take the pair towards 1.2868 (100 DMA).
USD/CHF: The dollar strengthened against the Swiss franc on Tuesday, as dollar was boosted by upbeat US manufacturing data. U.S. manufacturing survey showed a rebound in January factory activity after five straight months of contraction, amid a surge in new orders. At (GMT 12:19), Greenback dipped 0.28% versus the Swiss franc to 0.9704. Immediate resistance can be seen at 0.9690 (9 DMA), an upside break can trigger rise towards 0.9725 (30th Jan high).On the downside, immediate support is seen at 0.9632 (Lower BB), a break below could take the pair towards 0.9600 (Psychological level).
USD/JPY: The dollar rose against the Japanese yen on Tuesday, as dollar strengthened after U.S. manufacturing survey showed a surprise rebound in January. Institute for Supply Management (ISM) reported that U.S. factory activity unexpectedly rebounded in January after contracting for five straight months amid a surge in new order. Strong resistance can be seen at 109.14 (11 DMA), an upside break can trigger rise towards 110.00 (Psychological level).On the downside, immediate support is seen at 108.40 (100 DMA), a break below could take the pair towards 108.13 (Lower BB).
Equities Recap
European shares opened higher on Tuesday, extending their recovery from a sharp selloff last week that was driven by concerns over a virus outbreak in China, with the basic resources sector leading gains.
At (GMT 12:55),UK's benchmark FTSE 100 was last trading higher at 0.35 percent, Germany's Dax was up by 0.62 percent, France’s CAC was last down by 1.43 percent.
Commodities Recap
Gold eased on Tuesday as investors booked profits after a near four-week high in the last session, but concerns about a rapidly spreading virus outbreak in China and its economic impact underpinned the precious metal.
Spot gold was down 0.2% at $1,572.87 per ounce by 0751 GMT, after hitting $1,591.46 in the previous session, its highest since Jan. 8. U.S. gold futures fell 0.3% to $1,577.20.
Oil prices clawed back ground on Tuesday amid hopes for new output curbs from OPEC and its allies to offset any potential drop in demand triggered by the coronavirus outbreak.
Brent crude stood at $55.02 a barrel by 0930 GMT, up 57 cents, or nearly 1.1%, and U.S. West Texas Intermediate (WTI) crude was up 95 cents, or 1.9%, at $51.06.
Treasuries Recap
U.S.: The U.S. Treasuries plunged during Tuesday’s afternoon session amid a muted trading session that witnessed data of little economic significance. However, a host of 3-tier economic data – ADP non-farm employment, ISM non-manufacturing PMI and the labour market report, besides, other data are all due through this week which shall provide further direction to the debt market. The yield on the benchmark 10-year Treasury yield jumped 5 basis points to 1.572 percent, the super-long 30-year bond yield also surged 5 basis points to 2.049 percent and the yield on the short-term 2-year gained nearly 4 basis points to trade at 1.391 percent.
EUR: The German bunds slumped during European trading session Tuesday ahead of eurozone’s retail sales for the month of January, scheduled to be released on February 5 by 10:00GMT and the European Central Bank (ECB) President Christine Lagarde’s speech, also due to be delivered on the same day by 12:15GMT. The German 10-year bond yield, which moves inversely to its price, jumped 2-1/2 basis points to -0.411 percent, the long-term 30-year yield surged 3 basis points to 0.105 percent and the yield on short-term 2-year remained tad higher at -0.665 percent.
AUS: The Australian bonds suffered during Asian session of the second trading day of the week Tuesday, after the Reserve Bank of Australia (RBA) remained on hold at its monetary policy meeting, held early today ahead of the country’s retail sales for the month of December, scheduled to be released on February 6 by 00:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose nearly 1 basis point to 0.926 percent, the yield on the long-term 30-year bond also edged tad higher to 1.522 percent and the yield on short-term 2-year jumped nearly 3 basis points to trade at 0.655 percent.
