Market Roundup
• French Dec Trade Balance -11.3B, -9.7B previous
•French Dec Imports 55.4B, 53.7B previous
•French Dec Exports 44.1B, 44.0B previous
Looking Ahead Economic Data
• 13:30 US Exports 224.20B previous
• 13:30 US Imports 304.40B previous
• 13:30 US Dec Trade Balance -83.00B, -80.20B previous
• 13:30 Canada Dec Exports 58.57B previous
• 13:30 US Dec Trade Balance 2.50B forecast, 3.13B previous
• 13:30 US Dec Imports 55.44B previous
•17:00 US EIA Short-Term Energy Outlook
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Fxbeat
EUR/USD: The euro weakened for a second consecutive day on Tuesday after European Central Bank President Christine Lagarde said there is no need for big monetary policy tightening in the euro zone. Bond yields surged and the euro notched up its best weekly performance since March 2020 last week after the ECB opened the door to an interest rate rise later in 2022 and said a March 10 meeting would be key in deciding how quickly the central bank would wind down its long-running bond-buying scheme. In early trading on Tuesday, the euro was down 0.3%, struggling to hold its head above the $1.14 levels. 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/CHF: The dollar initially gained on Tuesday but gave up ground as investors awaited U.S. inflation data due later in the week could unleash bets on faster interest rate hikes. The U.S. consumer price index for January is expected to show an annual rise of 7.3%, which would be the largest such increase since 1982. A robust inflation figure could increase pressure on the Fed for faster tightening. The dollar index gained 0.2%, while the benchmark 10-year U.S. Treasuries climbed to their highest levels in more than two years. Immediate resistance can be seen at 0.9265(Daily high), an upside break can trigger rise towards 0.9276 (23.6%fib).On the downside, immediate support is seen at 0.9225 (38.2%fib), a break below could take the pair towards 0.9181 (50% fib ).
USD/JPY: The dollar rose against the Japanese yen on Tuesday as the dollar gained in global markets, with traders wary that U.S. inflation data due later in the week could unleash bets on faster interest rate hikes. 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.. Strong resistance can be seen at 115.49 (23.6% fib), an upside break can trigger rise towards 115.60 (Higher BB).On the downside, immediate support is seen at 115.00 (5DMA), a break below could take the pair towards 114.86 (38.2% fib).
Equities Recap
Bumper profits from oil giant BP helped lift European stocks on Tuesday, while the euro was pegged back as the head of the European Central Bank, Christine Lagarde, tried to rein in interest rate hike expectations.
At (GMT 12:22 ),UK's benchmark FTSE 100 was last trading up at 0.00 percent, Germany's Dax was up by 0.20 percent, France’s CAC was up by 0.19 percent.
Commodities Recap
Gold prices edged down on Tuesday as the dollar rebounded in the run-up to the latest U.S. inflation numbers with investors anticipating the U.S. Federal Reserve would signal aggressive interest rate hikes this year.
Spot gold was down 0.1% at $1,818.70 per ounce by 1017 GMT. U.S. gold futures fell 0.1% to $1,819.90.
Oil slipped towards $90 a barrel on Tuesday ahead of the resumption of indirect talks between the United States and Iran, which could revive an international nuclear agreement and allow more oil exports from the OPEC producer.
Brent crude was down $2.02, or 2.2%, at $90.67 a barrel by 1110 GMT after hitting a seven-year high of $94 on Monday. U.S. West Texas Intermediate crude fell $1.60, or 1.8%, to $89.72.
