Market Roundup
• EU HCOB Italy Manufacturing PMI (Jan): 48.1, 48.5 forecast, 47.9 previous.
• EU HCOB France Manufacturing PMI (Jan): 51.2, 51.0 forecast, 50.7 previous.
• EU HCOB Germany Manufacturing PMI (Jan): 49.1, 48.7 forecast, 47.0 previous.
• EU HCOB Eurozone Manufacturing PMI (Jan): 49.5, 49.4 forecast, 48.8 previous.
• EU S&P Global Greece Manufacturing PMI (Jan): 54.2, 52.9 previous.
• UK S&P Global Manufacturing PMI (Jan): 51.8, 51.6 forecast, 50.6 previous.
Looking Ahead Economic Data (GMT)
•15:00 US S&P Global Manufacturing PMI (Jan): 51.9 forecast, 51.8 previous.
•15:00 US ISM Manufacturing PMI (Jan): 48.5 forecast, 47.9 previous.
•15:00 US ISM Manufacturing Prices (Jan): 59.3 forecast, 58.5 previous.
•15:00 US Atlanta Fed GDPNow (Q4): 4.2% forecast, 4.2% previous.
•15:30 US 3-Month Bill Auction: 3.580% previous.
•15:30 US 6-Month Bill Auction: 3.525% previous.
Looking Ahead Events And Other Releases (GMT)
• 17:30 US FOMC Member Bostic Speaks
Currency Forecast
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. Investors also looked to the ECB's meeting later this week. While Europe's central bank is widely expected to keep interest rates unchanged, markets will be watching closely for signs as to how the euro's recent strength could affect policy-making going forward. 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 firmed 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 weakened 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
The STOXX 600 was flat on Monday as declines in commodity stocks were offset by gains in defensive sectors, while investors reviewed earnings to assess corporate Europe’s health.
At (GMT 13:20),UK's benchmark FTSE 100 was last trading up at 1.07 percent, Germany's Dax was up by 1.03 percent, France’s CAC was last up by 0.79 percent.
Commodities Recap
Gold and silver prices continued to fall on Monday as higher margin requirements at CME Group compounded last week's sharp selloff following the nomination of Kevin Warsh as the next Federal Reserve chair.
Spot gold was down 3% at $4,718.35 an ounce by 09:10 a.m. ET (1148 GMT), after tumbling nearly 10% earlier in the session. U.S. gold futures for April delivery were steady at $4,740.90 an ounce.
Oil prices dropped about 5% on Monday after U.S. President Donald Trump said Iran was “seriously talking” with Washington, signaling easing tensions with the OPEC member, while a stronger dollar added further pressure.
Brent crude futures were down $3.50, or 5%, at $65.86 per barrel at 1303 GMT. U.S. West Texas Intermediate crude fell $3.42, or 5.2%, to $61.79 per barrel.
