Market Roundup
• Australia Judo Bank Services PMI (Dec) 51.1, 51.0 forecast,52.8 previous
• Australia Manufacturing & Services PMI (Dec)51.00, 51.10 forecast, 52.60 previous
•Japan Monetary Base (YoY) (Dec)-9.8%, -8.0% forecast,-8.7% previous
Looking Ahead Economic Data (GMT)
• 08:30 HCOB Italy Services PMI (Dec): 54.2, 55.0 forecast, 55.0 previous
• 08:30 HCOB Italy Composite PMI (Dec): 53.8 previous
• 08:30 HCOB France Services PMI (Dec): 50.2 forecast, 51.4 previous
• 08:30 HCOB France Composite PMI (Dec): 50.1 forecast,, 50.4 previous
• 08:30 HCOB Germany Services PMI (Dec): 52.6 forecast,, 53.1 previous
• 08:30 HCOB Germany Composite PMI (Dec): 51.5 forecast, 52.4 previous
• 08:30 HCOB Eurozone Services PMI (Dec): 52.6 forecast, 53.6 previous
• 08:30 HCOB Eurozone Composite PMI (Dec): 51.9 forecast, 52.8 previous
• 09:30 UK S&P Global Composite PMI (Dec) 52.1 forecast,51.2 previous
• 09:30 UK S&P Global Services PMI (Dec) 52.1 forecast,51.3 previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD : The euro strengthened on Tuesday as the U.S. dollar came under pressure following dovish remarks from Minneapolis Fed President Neel Kashkari, a voter on this year’s rate-setting committee. On Monday, Minneapolis Fed President Neel Kashkari noted that inflation is slowly declining, but cautioned that the unemployment rate might rise unexpectedly. He believes the rate is roughly 4.6%, indicating a softening labor market, and questioned data showing slowing inflation, citing disruptions from the extended government shutdown in the fall. The government reported last month that U.S. consumer prices rose 2.7% in November from a year earlier, less than projected.Immediate resistance can be seen at 1.1793(23.6%fib), an upside break can trigger rise towards 1.1828(Higher BB).On the downside, immediate support is seen at 1.1731(38.2%fib), a break below could take the pair towards 1.1680(50%fib).
GBP/USD: Sterling inched up on Tuesday as the dollar eased following dovish remarks from Minneapolis Fed President Neel Kashkari. Minneapolis Federal Reserve President Neel Kashkari on Monday said inflation is slowly trending down, but there is a risk the jobless rate could "pop" higher.Expectations of policy easing edged up after his remarks, though Fed funds futures are still pricing an implied 82.8% probability that interest rates will remain on hold at the U.S. central bank's next meeting on January 27-28, compared to an 83.4% chance on Friday, according to the CME Group's FedWatch tool. Immediate resistance can be seen at 1.3577(38.2%fib), an upside break can trigger rise towards 1.3620(Higher BB).On the downside, immediate support is seen at 1.3459 (50%fib), a break below could take the pair towards 1.3426(SMA 20).
AUD/USD: The Australian dollar firmed on Tuesday as a revival in risk sentiment and higher copper prices supported Australian dollar. The commodity-heavy currency is widely viewed as a liquid proxy for global risk appetite, as its movements tend to mirror shifts in investor sentiment. Copper prices hit record highs in London (CMCU3) and Shanghai as supply concerns intensified after a strike at a Chilean mine, with U.S. Comex copper also reaching an all-time high on Monday. Domestically, attention turns to Australia’s November CPI due Wednesday, expected to rise 3.65% year-on-year, slightly lower than October’s 3.8%.The trimmed mean measure of core inflation is expected to remain at 3.3%, reinforcing concerns that fourth-quarter inflation will stay uncomfortably high. Immediate resistance can be seen at 0.6695(23.6%fib), an upside break can trigger rise towards 0.6726(Higher BB).On the downside, immediate support is seen at 0.6654(Daily low), a break below could take the pair towards 0.6609(38.2%fib)
USD/JPY: The U.S. dollar strengthened against yen on Tuesday as markets increasingly priced in further interest rate hikes by the Bank of Japan this year.The yen remains underpinned by talk of potential official action to slow its decline and prospects for additional policy tightening by the BoJ. BoJ Governor Kazuo Ueda reiterated on Monday that policy rates will be guided by how the economy and inflation evolve relative to the bank’s forecasts.The remarks reflected rising optimism that Japan is finally leaving behind years of deflation and transitioning to a more sustainable growth environment. Attention is now turning to Friday’s U.S. employment report, which is seen as a key driver for Federal Reserve rate expectations and could determine the next directional move. Immediate resistance can be seen at 157.80(23.6%fib) an upside break can trigger rise towards 158.00(Psychological level) .On the downside, immediate support is seen at 155.91 (SMA 20) a break below could take the pair towards 155.61 (38.2%fib).
Equities Recap
Asian equities pushed further into record territory on Tuesday, tracking Wall Street’s lead after gains in energy and financial stocks drove the Dow Jones Industrial Average to a fresh all-time high.
China’s A50 up 1.57%, Japan’s Nikkei 225 was up by 3.03% ,South Korea’s KOSPI was up at 3.43%
Commodities Recap
Gold prices rose further on Tuesday, reaching a one-week high as dovish remarks from Fed officials strengthened expectations of rate cuts, while tensions surrounding Venezuela lifted safe-haven demand.
Spot gold was up 0.4% at $4,463.63 per ounce, as of 0722 GMT, after rising nearly 3% in the last session.
U.S. gold futures for February delivery rose 0.5% to $4,473.90.
Oil prices slipped on Tuesday amid expectations of abundant global supply and soft demand, with markets also factoring in the potential for increased Venezuelan crude output after the U.S. capture of President Maduro.
Brent crude futures fell 0.2%, or 14 cents, to $61.62 a barrel by 0450 GMT while U.S. West Texas Intermediate crude was at $58.13 a barrel, down 0.3% or 19 cents.
