Market Roundup
- EUR/USD -0.1%, USD/JPY +0.5%, GBP/USD +0.2%, DXY -0.01%,
- DAX +0.5%, Brent -0.5%, Gold -0.3%, Copper +0.4%
- USD/JPY off 2-week 113.85 Asia high. P/bk to 113.44 before small bounce
- London copper strikes 20-month peak as supply worries swirl
- China mulls radical steps targeting metals, coal in war on smog -document
- EU sees EZ economy weaken this year, Britain to halve growth by 2018
- Germany Jan Wholesale price index 0.8% m/m, 4.0% y/y vs previous 1.2%/2.8%
- US President Trump commits to Japan security, did not discuss currency issues
- Greece says bailout deal close, Juncker says it’s on shaky ground
- EU Dombrovskis – Greece, lenders risk EZ instability if talks drag on
- EU Moscovici: Will go to Athens Wed to help conclude Greek reform review
- SNB domestic sight deposits 464.516bln w/e Feb 10, up from 462.994bln
- Swiss voters soundly reject corporate tax overhaul
Economic Data Ahead
- (1645 ET/2145 GMT) Statistics New Zealand will release food price index for the month of January. The indicator posted a fall of 0.8 percent in the prior month.
Key Events Ahead
- (1145 ET/1645 GMT) FedTrade operation 30-yr Ginnie Mae (max $1.150 bn)
- (1430 ET/1930 GMT) FedTrade operation 15-yr Fannie Mae/Freddie Mac (max $600 mn)
- N/A Canadian Prime Minister Justin Trudeau will hold his first talk with U.S. President Donald Trump in Washington, DC.
FX Beat
DXY: The dollar rose to a 2-week high versus the Japanese yen ahead of Federal Reserve chief Janet Yellen's testimony and U.S. CPI figures. The greenback against a basket of currencies traded at 100.72, having hit a high of 101.02 earlier, it’s strongest since Jan. 30. FxWirePro's Hourly Dollar Strength Index stood at -21.76 (Neutral) by 1100 GMT.
EUR/USD: The euro rose, halting its two-day losing streak as the greenback eased after rising to a 2-week high earlier in the day. The European currency edged up to 1.0638, hovering away from a low of 1.0607 hit on Friday, it’s lowest since Jan. 19. FxWirePro's Hourly Euro Strength Index stood at -55.58 (Bearish) by 1000 GMT. On the higher side, immediate resistance is around 1.06830 and any break above will take it till 1.0760/1.0800/1.08288 (Feb 2nd high). The pair should break above 1.08735 for further bullishness. The major support stands at 1.0580 and any break below will drag it till 1.0500/1.04500. The short term bearish Invalidation only above 1.08735.
USD/JPY: The dollar trimmed gains after rising to a 2-week high against the yen as investors focused on Federal Reserve chief Janet Yellen's testimony this week. The major trades 0.4 percent higher at 113.72, having hit a high of 114.16 earlier, it’s highest since Jan 3. FxWirePro's Hourly Yen Strength Index stood at -140.00 (Highly Bearish) by 1000 GMT. The major resistance is around 114.56 (daily Kijun-Sen) and any break above will take the pair till 115.35/116. On the lower side, minor support is around 112.75 (daily Tenken-Sen) and any break below 112.75 will drag the pair till 112.05/111.48.
GBP/USD: Sterling rose above the 1.2500 handle as investors attention shifted towards British inflation and retail data due later in the week. The economy's annual inflation is expected to accelerate 1.8 percent in January compared to 1.6 percent in December, strengthened by food and energy base effects and currency pass-through. Sterling trades 0.3 percent higher at 1.2518, having hit a high of 1.2582 on Thursday, it’s strongest since Feb. 2. FxWirePro's Hourly Sterling Strength Index stood at 80.41 (Bullish) by 1000 GMT. The upside capped is by 100 –day EMA and any break above will take the pair till 1.26750/1.27060 (Feb 2nd high). On the lower side, next immediate support is around 1.2450 (21- day EMA) and any break below will drag it down till 1.2345 (Feb 7th low)/1.2300. Against the euro, the pound trades 0.2 percent up at 84.98 pence, having hit a high of 84.89 earlier, it’s strongest since Jan. 30.
USD/CHF: The Swiss franc edged down, extending losses for the third consecutive session as the dollar gained across the board. The major trades higher at 1.0025, having touched a high of 1.0062 on Friday, it’s highest since Jan. 30. FxWirePro's Hourly Swiss Franc Strength Index stood at 18.02 (Neutral) by 1000 GMT. The minor weakness can be seen below 1.0000 (100- day EMA) and any break below will drag the pair till 0.9950/0.9900. On the higher side, 1.0070 will be acting as immediate resistance and any break above this level will take it till 1.01225 (Jan 19th high)/1.01588 (61.8% retracement of 1.03435 and 0.98611).
AUD/USD: The Australian dollar eased as traders refrained from taking big positions ahead of the US CPI and Australia’s employment report due later this week. The Aussie trades flat at 0.7674, after gaining 0.7 percent to 0.7689 in the previous session. FxWirePro's Hourly Aussie Strength Index stood at 139.55 (Highly Bullish) by 1100 GMT. On the lower side, the minor support stands at 0.7610 (10- day MA) and any break below will drag the pair down till 0.7580 (21- day MA)/0.7500. The minor resistance is around 0.7700 and a break above will take it till 0.7748/0.77783 (Nov 8th high).
NZD/USD: The New Zealand dollar declined below the 0.7200 handle, reversing early session gains, as the U.S. dollar rose on the back of rising Treasury yields. The Kiwi trades 0.1 percent down at 0.7188, having hit a low of 0.7173 on Thursday, it’s weakest since Nov. 23. FxWirePro's Hourly Kiwi Strength Index was at -95.80 (Slightly Bearish) by 1100 GMT. Immediate resistance is located at 0.7220 (23.6 % retracement of 0.7375 and 0.7173), a break above could take it near 0.7235 (21-DMA). On the downside, support is seen at 0.7158 (Jan 23 Low) a break below could drag it lower 0.7150.
Equities Recap
European shares rallied, extending gains for a fifth consecutive session as mining stocks touched their highest in 2-1/2-years on the back of stronger copper prices.
The pan-European STOXX 600 index increased 0.26 percent to 368.34 points, while the FTSEurofirst 300 index rallied 0.24 percent to 1,452.14 points.
Britain's FTSE 100 trades 0.07 percent up at 7,263.38 points, while mid-cap FTSE 250 rose 0.15 percent to 18,742.16 points.
Germany's DAX advanced 0.52 percent at 11,727.26 points; France's CAC 40 trades 0.49 percent higher at 4,852.20 points.
Tokyo's Nikkei gained 0.41 percent to 19,459.15 points, Australia's S&P/ASX 200 index rose 0.64 percent to 5,757.40 points and South Korea's KOSPI jumped 0.17 percent to 2,078.65 points.
Shanghai composite index climbed 0.6 percent to 3,216.84 points, while CSI300 index advanced 0.7 percent at 3,436.28 points. Hong Kong’s Hang Seng added 0.6 percent at 23,710.98 points.
Commodities Recap
Crude oil prices declined, after rising in the previous three sessions, as growing inventories and rising output offset OPEC-led production cuts. International benchmark Brent crude was trading 0.7 percent lower at $56.26 per barrel by 0949 GMT, pulling away from a high of $56.85 hit on Friday, its strongest since Jan. 6. U.S. West Texas Intermediate crude fell 0.76 percent at $53.43 a barrel, after rising as high as $54.10 last week, its highest since Jan. 6.
Gold prices eased as the dollar strengthened against the yen following a smooth meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe. Spot gold tumbled 0.25 percent to $1,229.20 per ounce by 0952 GMT, having hit its lowest since Jan. 6 at $1,221.46 on Friday. U.S. gold futures were down 0.36 percent at $1,231.3.
Treasuries Recap
The U.S. Treasuries plunged ahead of the Federal Reserve Chair Janet Yellen’s testimony scheduled to be held on Tuesday. The yield on the benchmark 10-year Treasury jumped 3 basis points to 2.44 percent, the super-long 30-year bond yield traded 2-1/2 basis points higher at 3.03 percent while the yield on short-term 2-year note also rose 1-1/2 basis points to 1.21 percent.
The UK gilts continued to trend lower at the start of the week, following expectations of upbeat consumer price inflation (CPI) data during the month of January, scheduled to be released on February 14. The yield on the benchmark 10-year gilts, jumped 2-1/2 basis points to 1.28 percent, the super-long 30-year bond yields also surged 2-1/2 basis points to 1.97 percent and the yield on the short-term 2-year too edged higher by 2-1/2 basis points to 0.11 percent.
The German government bunds slumped as investors eye the release of the fourth-quarter gross domestic product (GDP) and consumer price inflation data, scheduled to be released on February 14. The yield on the benchmark 10-year bond, rose 1-1/2 basis points to 0.33 percent, the long-term 30-year bond yields also jumped 2 basis points to 1.13 percent while the yield on short-term 3-year bond moved higher by nearly 1/2 basis point to -0.76 percent.
The Japanese government bonds traded modestly lower, tracking gains in the country’s benchmark index. However, investors have largely shrugged off the lower-than-expected Q4 gross domestic product (GDP), released early today. The benchmark 10-year bond yield, rose nearly 1/2 basis point to 0.09 percent, the long-term 30-year bond yields rose 1 basis point to 0.86 percent and the yield on the short-term 2-year note also traded 1/2 basis point higher at -0.20 percent.
The New Zealand government bonds closed modestly higher as investors covered previous short positions after witnessing long winning streak in the previous week. Also, investors remain cautious ahead of the Federal Reserve Chair Janet Yellen’s testimony scheduled to be held on February 14 at 15:00GMT. The yield on the benchmark 10-year bond, fell 1 basis point to 3.23 percent at the time of closing, the yield on 7-year note also slid nearly 1 basis point to 2.83 percent and the yield on short-term 2-year note traded 1/2 basis point lower at 2.20 percent.
The Australian government bonds declined on the first day of the trading week, tracking weakness in U.S. Treasuries and as investors wait to watch the Federal Reserve Chair Janet Yellen’s testimony scheduled to be held on Tuesday at 15:00GMT. The yield on the benchmark 10-year Treasury note, rose 1 basis point to 2.71 percent, the yield on 15-year note also jumped nearly 1 basis point to 3.15 percent and the yield on medium-term 6-year rebounded 1 basis point to 2.35 percent.
