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America’s Roundup: Dollar gains as Ukraine tensions boost safe-haven appeal, Wall Street ends lower, Gold gains, Oil falls 2% as Fed rate hike talk spooks risk markets-January 25th,2022

Market Roundup

•Canada Manufacturing Sales (MoM) 0.8%,2.6% previous

•Chicago Fed National Activity -0.15, 0.37 previous

•French 6-Month BTF Auction -0.670%, -0.646% previous

•French 3-Month BTF Auction -0.663%, -0.672%,-0.650% previous

•US Jan Manufacturing PMI 55.0,56.7 forecast, 57.7 previous

•US Jan Markit Composite PMI 50.8,57.0 previous

•US Jan Services PMI 50.9,55.0  forecast, 57.6 previous

•US 3-Month Bill Auction  0.190%,0.170% previous

•US 6-Month Bill Auction 0.380%, 0.365% previous

Looking Ahead - Economic Data (GMT)

• 05:00 Japan BoJ Core CPI (YoY) 0.7% forecast, 0.8% previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events


EUR/USD: The euro declined against dollar on Monday as worries about a possible Russian attack on Ukraine boosted demand for safe-haven assets in a cautious market ahead of this week's Federal Reserve policy meeting. The United States on Sunday ordered the departure of family members of staff at its embassy in Ukraine, while US President Joe Biden weighed options for boosting America's military assets in Eastern Europe. The Fed ends its two-day meeting on Wednesday and investors expect the US central bank to raise rates four times this year starting in March and shrink its balance sheet size. Immediate resistance can be seen at 1.1340 (38.2%fib), an upside break can trigger rise towards 1.1369 (11DMA).On the downside, immediate support is seen at 1.1310 (50%fib), a break below could take the pair towards  1.1276 (61.8% fib).

GBP/USD: Sterling declined against dollar on Monday as investor was cautious as tensions between Russia and the West remained tense. Investors are bracing for a U.S. Federal Reserve meeting this week, in which the central bank will likely announce the timing of rate hikes. Meanwhile, the United States told diplomats’ families to leave Ukraine. The pound was down 0.43 percent o at $1.3495. Immediate resistance can be seen at 1.3499(38.2%fib), an upside break can trigger rise towards 1.3565 (23.6%fib).On the downside, immediate support is seen at 1.3441 (50%fib), a break below could take the pair towards 1.3381(61.8%fib).

USD/CAD: The Canadian dollar weakened on Monday to its lowest level in more than two weeks against its U.S. counterpart as investors dumped riskier assets on fears of a Russian attack on Ukraine. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to moves in risk appetite. U.S. crude prices settled 2.2% lower at $83.31 a barrel, while the safe-haven U.S. dollar gained ground against a basket of major currencies. The loonie  was trading 0.5% lower at 1.2650 to the greenback , after touching its weakest level since Jan. 7 at 1.2701. Immediate resistance can be seen at 1.2641 (23.6%fib), an upside break can trigger rise towards 12744(January 24th high).On the downside, immediate support is seen at 1.2578 (38.2%fib), a break below could take the pair towards 1.2545 (11 DMA).

USD/JPY: The dollar strengthened against the Japanese yen on Monday as dollar was lifted by rising geopolitical risk over Ukraine and a likely hawkish stance from the Federal Reserve at its policy meeting this week.Markets until recently had mostly shrugged off the massing of Russian troops on Ukraine's borders, but tensions have ratcheted up lately. The dollar index has gained some 1.5% since Jan. 14. During this period, several banks have raised forecasts for the speed and size of the Fed's policy tightening, a picture that should be clearer at the end of its two-day meeting on Wednesday. Strong resistance can be seen at 113.99 (38.2% fib), an upside break can trigger rise towards 114.33(11DMA).On the downside, immediate support is seen at 113.52 (50%fib), a break below could take the pair towards 113.02 (61.8%fib).

Equities Recap

European shares slipped in early deals on Monday, with technology stocks falling the most after worries about tighter monetary policies triggered a bruising sell-off in global equities last week.

UK's benchmark FTSE 100 closed up by  2.63 percent, Germany's Dax ended up by 3.84 percent, France’s CAC finished the day up by 3.0397 percent.                           

A tumultuous day on Wall Street saw stocks end higher after posting heavy losses earlier in the day, as uncertainty over rising geopolitical tensions and Fed policy weighed down oil and boosted safe havens.

Dow Jones closed up  by 0.29% percent, S&P 500 closed up by 0.28% percent, Nasdaq settled up by  0.63 % percent.

Treasuries Recap

U.S. Treasury yields on most maturities slid on Monday, as investors grew nervous about a potential conflict between Russia and Ukraine as well as a Federal Reserve that is widely expected this week to flag an interest rate hike in March.

The benchmark U.S. 10-year yield was flat on the day at 1.7511%, after earlier hitting an 11-day low of 1.7070%.

Commodities Recap

Gold advanced on Monday as a selloff in Wall Street driven by geopolitical tensions over Ukraine bolstered its safe-haven appeal, while investors prepared for the Federal Reserve's rate hike decision.

Spot gold rose 0.4% to $1,840.16 per ounce by 14:39 p.m. EST (1939 GMT). U.S. gold futures settled up 0.5% at $1,841.70.

Oil prices fell about 2% on Monday, hit by investor concerns over the possibility of quicker than expected interest-rate hikes by the U.S. Federal Reserve that took down risk markets such as equities while the dollar rallied.

Brent crude fell $1.62, or 1.8%, to $86.27 a barrel, while U.S. West Texas Intermediate (WTI) crude settled down $1.83, or 2.2%, to $83.31.

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