Market Roundup
• New Zealand Unemployment Rate (Q4): 5.4%, 5.3% forecast, 5.3% previous
• New Zealand Participation Rate (Q4): 70.50%, 70.30% forecast, 70.30% previous
• New Zealand Labor Cost Index (QoQ) (Q4): 0.4%, 0.5% forecast, 0.5% previous
• New Zealand Employment Change (QoQ) (Q4): 0.5%, 0.3% forecast, 0.0% previous
• Australia AIG Construction Index (Jan): 5.2, -16.9 previous
• Australia AIG Manufacturing Index (Jan): -19.4, -18.3 previous
• Australia Judo Bank Services PMI (Jan): 56.3, 56.0 forecast, 51.1 previous
• Australia Manufacturing & Services PMI (Jan): 55.70, 55.50 forecast, 51.00 previous
•Japan au Jibun Bank Services PMI (Jan): 53.7, 53.4 forecast, 51.6 previous
•Japan Manufacturing & Services PMI (Jan): 53.10, 52.80 forecast, 51.10 previous
•China Caixin Services PMI (Jan): 52.3, 52.0 forecast, 52.0 previous
Looking Ahead Economic Data (GMT)
•08:45 HCOB Italy Services PMI (Jan): 51.3 forecast, 51.5 previous
•08:45 HCOB Italy Composite PMI (Jan): 50.3 previous
•08:50 EU HCOB France Services PMI (Jan): 47.9 forecast, 50.1 previous
•08:50 EU HCOB France Composite PMI (Jan): 48.6 forecast, 50.0 previous
•08:55 EU HCOB Germany Services PMI (Jan): 53.3 forecast, 52.7 previous
•08:55 EU HCOB Germany Composite PMI (Jan): 52.5 forecast, 51.3 previous
•09:00 EUHCOB Eurozone Services PMI (Jan): 51.9 forecast, 52.4 previous
•09:00 EU HCOB Eurozone Composite PMI (Jan): 51.5 forecast, 51.5 previous
•09:30 UK S&P Global Composite PMI (Jan): 53.9 forecast, 51.4 previous
•09:30 forecast S&P Global Services PMI (Jan): 54.3 forecast, 51.4 previous
•10:00 EU CPI (YoY) (Jan): 1.7% forecast, 1.9% previous
10:00 EUR Core CPI (YoY) (Jan): 2.3% forecast, 2.3% previous
10:00 EUR CPI (MoM) (Jan): 0.2% previous
10:00 EUR HICP ex Energy & Food (YoY) (Jan): 2.3% previous
10:00 EUR PPI (YoY) (Dec): -2.3% forecast, -1.7% previous
10:00 EUR CPI, n.s.a (Jan): 129.54, previous
10:00 EUR PPI (MoM) (Dec): -0.3% forecast, 0.5% previous
10:00 EUR Core CPI (MoM) (Jan): 0.3 previous
10:00 EUR HICP ex Energy and Food (MoM) (Jan): 0.2%previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD : The euro edged higher on Wednesday as investors positioned ahead of Eurozone inflation data. Euro zone preliminary inflation data on Wednesday will set the tone for markets ahead of the European Central Bank's rate decision a day later, as policymakers keep close tabs on the euro's strength.Expectations are for consumer prices in the bloc to have eased slightly to an annual 1.7% last month. That remains comfortably below the ECB's 2% target as price pressures dissipate and give the central bank reason to stay on hold.Recent data showed German inflation unexpectedly rose slightly in January, though France's came in less than expected.A significant miss could raise alarm bells for ECB policymakers, who last month flagged growing concerns over the euro's quick appreciation against the dollar and its potential to push inflation even lower if it continues strengthening. Immediate resistance can be seen at 1.1908(38.2%fib), an upside break can trigger rise towards 1.1978(Jan 30th high).On the downside, immediate support is seen at 1.1786(50%fib), a break below could take the pair towards 1.1762(SMA 20).
GBP/USD: Sterling strengthened on Wednesday as investors remained cautious after a partial government shutdown swiftly ended .The currency markets were still digesting Kevin Warsh's nomination by U.S. President Donald Trump as the next Federal Reserve chief, with the dollar broadly firming on expectations that Warsh is unlikely to push for rapid rate cuts. Trump late on Tuesday signed a spending deal into law that ends a partial U.S. government shutdown after four days, although crucial employment data that was due on Friday will be delayed because of the shutdown. There will be little in the way of major UK economic data until growth, employment and inflation figures in mid- to late February. Immediate resistance can be seen at 1.3809(Jan 30th high), an upside break can trigger rise towards 1.3855(23.6%fib).On the downside, immediate support is seen at 1.3670 (38.2%fib), a break below could take the pair towards 1.3561(SMA 20).
AUD/USD: The Australian dollar firmed on Wednesday as investors priced in additional rate hikes, while positive services PMI figures boosted sentiment.The Reserve Bank raised its cash rate for the first time in two years in its February meeting amid stronger economic growth and a persistent inflation outlook.After the central bank flagged that inflation would not return to the middle of its 2%–3% target range by mid-2028, traders priced in about 40 basis points of additional tightening this year, with a May move seen as 80% likely.On the data front, Australia’s services activity surged to its strongest level in almost four years in January, but softer business confidence pointed to underlying caution.Australia’s Services PMI jumped to 56.3 in January from 51.1 in December, pointing to the strongest expansion in the sector in nearly four years. Immediate resistance can be seen at 0.6748(Feb 3rd high), an upside break can trigger rise towards 0.7084(Higher BB).On the downside, immediate support is seen at 0.6941(38.2%fib), a break below could take the pair towards 0.6835(SMA 20)
USD/JPY: The U.S. dollar strengthened against yen on Wednesday as worries about Japan’s fiscal position and political uncertainty outweighed expectations of tighter BoJ policy.The possibility of coordinated U.S.-Japan action has eased pressure on the yen, but its direction remains uncertain as Japan heads into weekend elections.Prime Minister Sanae Takaichi is campaigning in the national election on plans for increased spending, tax reductions, and a new security strategy that would speed up Japan’s defence expansion.Takaichi triggered a yen selloff this week following campaign remarks that boosted expectations of policy easing. Despite later clarifications, fears remain that mixed signals may hinder efforts to stabilise the currency. Immediate resistance can be seen at 157.89(Dec 18th high) an upside break can trigger rise towards 159.21(23.6%fib) .On the downside, immediate support is seen at 155.37(Daily low) a break below could take the pair towards 154.36 (50%fib).
Equities Recap
Asian stocks were on shaky ground on Wednesday, following steep losses in U.S. and European equities on fears that advancements in artificial intelligence could supplant traditional software.
Hang seng down 0.09%, Japan’s Nikkei 225 was down by 0.68% ,South Korea’s KOSPI was up at 1.21%
Commodities Recap
Oil prices rose on Wednesday, extending gains from the previous day, after the U.S. shot down an Iranian drone and armed Iranian boats approached a U.S.-flagged vessel in the Strait of Hormuz, stoking renewed concerns over U.S.-Iran tensions.
Brent crude futures were up 65 cents, or 1.0%, at $67.98 per barrel at 0111 GMT. U.S. West Texas Intermediate crude was at $63.90 per barrel, up 69 cents, or 1.1%.
Gold prices rose further on Wednesday, supported by safe-haven demand, as renewed U.S.-Iran tensions added to the metal’s recent rally, which included its strongest gain since 2008 in the previous session.
Spot gold gained 2.7% to $5,071.79per ounce as of 0353GMT, after surging 5.9% on Tuesday, its biggest daily gain since November 2008. Bullion scaled a record high of $5,594.82 last Thursday.
U.S. gold futures for April delivery climbed 3.2% to $5,092.0per ounce.
