Market Roundup
• Australia MI Inflation Gauge (MoM) (Jan): 0.2%, 1.0% previous.
• Australia ANZ Job Advertisements (MoM) (Jan): 4.4%, -0.8% previous.
•Japan au Jibun Bank Manufacturing PMI (Jan): 51.5, 51.5 forecast, 50.0 previous.
•China Caixin Manufacturing PMI (Jan): 50.3, 50.1 forecast, 50.1 previous.
Looking Ahead Economic Data (GMT)
•08:50 EU HCOB France Manufacturing PMI (Jan): 51.0 forecast, 50.7 previous.
•08:50 EU HCOB Germany Manufacturing PMI (Jan): 48.7 forecast, 47.0 previous.
•09:00 EU HCOB Eurozone Manufacturing PMI (Jan): 49.4 forecast, 48.8 previous.
•09:00 EU S&P Global Greece Manufacturing PMI (Jan): 52.9 previous.
•09:00 South Africa Manufacturing PMI (Jan): 40.5 previous.
Looking Ahead Events And Other Releases
•Currency Forecast
EUR/USD : The euro dipped on Monday as dollar firmed as investors assessed what a Federal Reserve under Kevin Warsh might look like.Moves in currencies were fairly insulated from a broader market rout triggered by a plunge in gold and silver which spilled over into equity markets, as investors were left selling positions in profitable trades to meet margin calls. Market pricing remains at two Fed cuts for this year, with a move seen unlikely until June, when Warsh would be chair if confirmed by the Senate. Against a basket of currencies, the dollar was last at 97.21, holding to Friday's 1% gain.The euro was comfortably away from the $1.20 level as it last stood at $1.1848 Immediate resistance can be seen at 1.1942(38.2%fib), an upside break can trigger rise towards 1.2000(Higher BB).On the downside, immediate support is seen at 1.1845 (38.2%fib), a break below could take the pair towards 1.1746(50%fib).
GBP/USD: The pound edged lower on Monday as the dollar investors assessed the outlook for a Federal Reserve under Kevin Warsh.U.S. President Donald Trump's pick of Warsh as the next Fed chair sparked a wave of selling across risky assets and sent precious metals tumbling on Friday, while the dollar clawed back its losses from earlier last week.While investors think Warsh will be inclined to cut rates, they expect him to rein in the Fed's balance sheet, which is typically supportive for the dollar as it reduces the money supply in the market. Market pricing remains at two Fed cuts for this year, with a move seen unlikely until June, when Warsh would be chair if confirmed by the Senate. Immediate resistance can be seen at 1.3848(38.2%fib), an upside break can trigger rise towards 1.3889(Higher BB).On the downside, immediate support is seen at 1.3691(38.2%fib), a break below could take the pair towards 1.3572(50%fib).
AUD/USD: The Australian dollar eased on Monday as nomination of Kevin Warsh as the next U.S. central bank chief lifted greenback.On Friday, U.S. President Donald Trump said Warsh who prefers a smaller central bank balance sheet would be his pick for the next Federal Reserve chair. However, AUD/USD losses were somewhat limited by expectations that the Reserve Bank of Australia will raise rates. Investors largely expect the central bank to lift the cash rate by 25 basis points to 3.85% on Tuesday, marking its first hike in over two years as it seeks to curb persistent inflation.On the data front, Australia’s manufacturing activity accelerated in January, with the S&P Global PMI rising to 52.3 from 51.6 in December. Immediate resistance can be seen at 0.7083(23.6%fib), an upside break can trigger rise towards 0.7108(Higher BB).On the downside, immediate support is seen at 0.07000(Psychological level), a break below could take the pair towards 0.6958 (38.2%fib).
USD/JPY: The U.S. dollar firmed on Monday as yen weakned after Japanese Prime Minister Sanae Takaichi over the weekend talked up the benefits of a weaker yen in a campaign speech, in a tone at odds with her finance ministry that has worked to stem the currency's declines. Japanese Prime Minister Sanae Takaichi was not highlighting the benefits of a weak yen in her campaign speech over the weekend, a government spokesperson said on Monday.Takaichi on Saturday said the yen's depreciation was a "major opportunity" for export industries and that it served as a buffer against U.S. tariffs. But she later said she did not have a preference for the yen's direction. Immediate resistance can be seen at 154.14(50%fib) an upside break can trigger rise towards 156.36(38.2%fib) .On the downside, immediate support is seen at 152.09(50%fib) a break below could take the pair towards 151.28 (Lower BB).
Equities Recap
Asian stocks tracked Wall Street futures lower on Monday as turmoil in precious metals markets set a cautious tone ahead of a week packed with earnings, central bank meetings, and key economic data.
Hang seng down 2.23%, Japan’s Nikkei 225 was down by 1.23% ,South Korea’s KOSPI was down at 5.26%
Commodities Recap
Oil prices fell nearly 5% on Monday and were heading for the steepest single-session decline in more than 6 months, after U.S. President Donald Trump said Iran was "seriously talking" with Washington, signalling de-escalation with an OPEC member.
Brent crude futures were down $3.38, or 4.9%, at $65.94 per barrel at 0528 GMT. U.S. West Texas Intermediate crude fell $3.33, or 5.1%, to $61.88 per barrel.
The sell-off in gold and silver deepened on Monday after CME Group raised margin requirements, following last week’s price collapse triggered by Kevin Warsh’s nomination as the next Fed chair.
Spot gold fell 6.1% to $4,565.79 per ounce by 0726 GMT after shedding more than 9% on Friday in its sharpest one-day drop since 1983. The metal has lost more than $1,000 since hitting a record high at $5,594.82 on Thursday, erasing most of this year's gains.
