Market Roundup
• US Exports 228.10B,224.20B previous
• US Imports 308.90B,304.40B previous
• US Dec Trade Balance -80.70B,-83.00B, -80.20B previous
• Canada Dec Exports 57.75B, 58.57B previous
• Canada Dec Trade Balance -0.14B,2.50B forecast, 3.13B previous
• Canada Dec Imports 57.75B ,55.44B previous
Looking Ahead Economic Data
•02:00 New Zealand Inflation Expectations (QoQ) 3.0% previous
Looking Ahead - Events, Other Releases (GMT)
•01:30 Japan BoJ Board Member Nakamura Speech
Fxbeat
EUR/USD: The euro weakened in sideways trade on Tuesday a day after European Central Bank President Christine Lagarde tapped down expectations of aggressive interest rate hikes that have spooked bond markets. A more hawkish tone from both the ECB and the Federal Reserve last week caught markets off guard and sent yields soaring on euro zone and U.S. debt in anticipation rates could rise faster and higher than previously expected. Currencies broadly traded little changed as the market awaits U.S. consumer price data on Thursday. The dollar index rose 0.2%, with the euro down 0.21% to $1.1418. Immediate resistance can be seen at 1.1447(38.2% fib), an upside break can trigger rise towards 1.1489 (23.6%fib).On the downside, immediate support is seen at 1.1413 (50 % fib), a break below could take the pair towards 1.1382 (61.8% fib).
GBP/USD: Sterling strengthened against the dollar on Tuesday as investors judged that any monetary tightening by the European Central Bank will significantly lag its British counterpart in the near term. While the Bank of England delivered a quarter-point hike last week as widely expected, a split vote came as a surprise, as four of the nine Monetary Policy Committee members wanted a 50 basis points move. Money markets are now pricing in another 127 basis points of hikes over the remainder of the year. The pound was steady against the dollar, at $1.3540. Immediate resistance can be seen at 1.3570 (38.2%fib), an upside break can trigger rise towards 1.3615 (Feb 4th high).On the downside, immediate support is seen at 1.3489(50%fib), a break below could take the pair towards 1.3410(61.8%fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Tuesday, giving back some of the previous day's sharp gains, as oil prices fell and domestic data showed a surprise trade deficit. The price of oil, one of Canada's major exports, fell as investors worried the resumption of indirect talks between the United States and Iran could revive an international nuclear agreement and allow more oil exports from the OPEC producer.The loonie was trading 0.3% lower at 1.2706 to the greenback, or 78.70 U.S. cents, after trading in a range of 1.2665 to 1.2721.Immediate resistance can be seen at 1.2758(23.6%fib), an upside break can trigger rise towards 1.2807(Higher BB).On the downside, immediate support is seen at 1.2697 (38.2%fib), a break below could take the pair towards 1.2648 (50%fib).
USD/JPY: The dollar rose against the Japanese yen on Tuesday as market focus turned to U.S. inflation data due later in the week that could unleash bets on faster interest rate hikes there. Stunningly strong U.S. labour data last week has put extra focus on inflation, forecast to hit a four-decade high of 7.3% in January in Thursday's data release, in the lead up to March's Federal Reserve meeting. The dollar index, which tracks the greenback versus a basket of six currencies, gained 0.198 points or 0.21 percent, to 95.597. Strong resistance can be seen at 115.70(23.6% fib), an upside break can trigger rise towards 116.00(Higher BB).On the downside, immediate support is seen at 115.25 (5DMA), a break below could take the pair towards 115.04 (38.2% fib).
Equities Recap
European shares ended largely unchanged as a sharp fall in oil prices took the shine off bumper profits from oil company BP .
UK's benchmark FTSE 100 closed down by 0.08 percent, Germany's Dax ended up by 0.24 percent, France’s CAC finished the day up by 0.27 percent.
Wall Street ended sharply higher on Tuesday, lifted by Apple and Microsoft, while a jump in Treasury yields elevated bank stocks ahead of a key inflation reading this week.
Dow Jones closed up by 1.06 %percent, S&P 500 closed up by 0.84 % percent, Nasdaq settled up by 1.28% percent.
Commodities Recap
Gold prices advanced to a near two-week high on Tuesday, buoyed by mounting inflation concerns and Russia-Ukraine tensions, although expectations for a U.S. interest rate hike limited gains.
Spot gold rose 0.4% to $1,827.86 per ounce by 13:49 EST (1849 GMT), after hitting its highest since Jan. 26 at $1,828.12 earlier in the session.
U.S. gold futures settled up 0.3% at $1,827.90 per ounce, ahead of the U.S. inflation data due on Thursday.
Oil slid more than 2% on Tuesday from recent seven-year highs as the resumption of indirect talks between the United States and Iran could revive an international nuclear agreement and allow more oil exports from the OPEC producer.
Brent futures fell $1.91, or 2.1%, to settle at $90.78 a barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.96, or 2.1%, to settle at $89.36.
