Market Roundup
• New Zealand Business NZ PMI (Dec): 56.1, 51.4 previous.
•New Zealand FPI (MoM) (Dec): -0.3%, -0.4% previous.
•Japan Foreign Investments in Stocks: 1,141.4B, 124.9B previous.
•Japan Foreign Bonds Buying: 101.1B, -223.6B previous
Looking Ahead Economic Data (GMT)
• 07:00 German CPI (MoM) (Dec): 0.0% forecast, -0.2% previous.
• 07:00 German CPI (YoY) (Dec): 1.8% forecast, 2.3% previous.
• 07:00 German HICP (MoM) (Dec): 0.2% forecast, -0.5% previous.
• 07:00 German HICP (YoY) (Dec): 2.0% forecast, 2.6% previous
• Italian HICP (MoM) (Dec): 0.2% forecast, -0.2% previous.
• Italian HICP (YoY) (Dec): 1.2%forecast, 1.1% previous.
• Italian CPI (MoM) (Dec): 0.2%forecast, -0.2% previous.
• Italian CPI (YoY) (Dec): 1.2%forecast, 1.1% previous.
Currency Forecast
EUR/USD : The euro edged lower on Friday as dollar firmed after positive U.S. economic data lowered expectations for rate cuts by the Federal Reserve anytime soon.Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 198,000 for the week ended January 10, the Labor Department said on Thursday. Economists polled had forecast 215,000 claims for the latest week. Fed funds futures have pushed back expectations for the next rate cut to June on the back of improving employment data and as central bank policymakers expressed concern about inflation.Meanwhile, Philip Lane, ECB chief economist, said rates are unlikely to be discussed soon while the economy performs steadily, but unforeseen events such as a change in Fed policy could disrupt the forecast. Immediate resistance can be seen at 1.1649(Jan 15th high), an upside break can trigger rise towards 1.1689(50%fib).On the downside, immediate support is seen at 1.1559(Lower BB), a break below could take the pair towards 1.1496(23.6%fib).
GBP/USD: Sterling traded flat against dollar on Friday as investors digested UK GDP data and awaited fresh catalyst or further movement. Data on Thursday showed, Gross domestic product expanded by 0.3% on the month the fastest growth since June after a drop of 0.1% in October, official data showed on Thursday. Next week, UK markets will closely watch a trio of key economic releases that could shape sentiment and currency flows. Employment data will provide insight into labor market strength and potential wage pressures, while house price updates will shed light on the property market’s resilience amid rising borrowing costs. Inflation figures are expected to give a clearer picture of price pressures and the outlook for Bank of England policy. Immediate resistance can be seen at 1.3460(38.2%fib), an upside break can trigger rise towards 1.3496(Jan 12th high).On the downside, immediate support is seen at 1.3370(50%fib), a break below could take the pair towards 1.3331(Lower BB).
AUD/USD: The Australian dollar firmed on Friday as Aussie held steady as rising global equities offset pressure from a firmer greenback.The RBA left its cash rate unchanged at 3.6%, acknowledging softer inflation that is still above the 2%–3% band .Australia’s economy is slowing gradually, maintaining the narrative of a soft landing without triggering alarm.Markets are now pricing in a 27% chance of a quarter-point rate hike at the RBA’s February meeting, with expectations rising sharply to around 76% by May.Attention now turns to the Q4 CPI later this month, with next week’s December jobs report also expected to provide further insights. Immediate resistance can be seen at 0.6729(Jan 13th high), an upside break can trigger rise towards 0.6758(23.6%fib).On the downside, immediate support is seen at 0.6690(SMA20), a break below could take the pair towards 0.6672(38.2%fib)
USD/JPY: The U.S. dollar dipped on Friday as yen firmed amid lingering intervention risks tied to excessive Yen weakness. Japanese Finance Minister Katayama said all options remain on the table to address the yen’s slide to a 1½-year low.Japan’s markets face uncertainty as PM Takaichi dissolves parliament and the central bank prepares for a policy decision.PM Takaichi is expected to brief ruling bloc officials on Jan. 19 about the dissolution of the lower house.The Japanese currency has fallen on expectations that Prime Minister Sanae Takaichi may have more leeway to introduce more fiscally expansionist policies pending a snap election expected early next month. Warnings from Japanese policymakers that they stand ready to act against one-way movements in foreign exchange markets have given the yen brief boosts. Immediate resistance can be seen at 159.21(23.6%fib) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 158.00(Psychological level) a break below could take the pair towards 157.11 (SMA 20).
Equities Recap
Asian stocks rose Friday as the AI boom regained steam, while the dollar hovered near a six-week high after strong U.S. economic data cut Fed rate-cut bet.
China’s A50 down 0.33%, Indonesia’s IDX Composite was up by 0.47% ,South Korea’s KOSPI was up at 0.69%
Commodities Recap
Gold prices extended losses on Friday as stronger-than-expected U.S. data boosted the dollar and reinforced expectations that the Federal Reserve will delay rate cuts.
Spot gold eased 0.3% to $4,601.53 per ounce by 0217 GMT. Prices are still poised for about a 2% weekly gain after scaling a record peak of $4,642.72 on Wednesday.
U.S. gold futures for February delivery fell 0.4% to $4,605.20.
Oil prices were little changed on Friday as easing fears of a potential U.S. strike on Iran kept Brent and WTI near previous closes.
Brent was down 3 cents, or 0.05%, to $63.73 per barrel, while U.S. West Texas Intermediate was up 4 cents, or 0.07%, to $59.22 per barrel as of 0223 GMT.
