Market Roundup
- Switzerland Jan 2019 investor sentiment decrease to -44 balance vs previous -22.2 balance
- Spain Dec 2018 retail sales yy decrease to 0.8 % vs previous 1.4 %
- Switzerland Jan 2019 KoF indicator decrease to 95 diff.idx (forecast 97 diff.idx) vs previous 96.4 diff.idx (revised from 96.3 diff.idx)
- France Dec 2018 consumer spending mm decrease to -1.5 % (forecast -0.2 %) vs previous -0.1 % (revised from -0.3 %)
- Germany Feb 2019 GFK consumer sentiment increase to 10.8 balance (forecast 10.3 balance) vs previous 10.4 balance
- Germany Dec 2018 import prices yy decrease to 1.6 % (forecast 2.1 %) vs previous 3.1 %
- Germany Dec 2018 import prices mm decrease to -1.3 % (forecast -0.8 %) vs previous -1 %
- France q4 2018 GDP preliminary qq stays flat at 0.3 % (forecast 0.1 %) vs previous 0.3 %
- Eurozone Jan 2019 selling price expectations decrease to 10.9 balance vs previous 13 balance (revised from 12.3 balance)
- Eurozone Jan 2019 cons inflation expectations decrease to 15.5 balance vs previous 18.7 balance (revised from 18.6 balance)
- Eurozone Jan 2019 economic sentiment decrease to 106.2 (forecast 106.8 ) vs previous 107.4 (revised from 107.3 )
- Eurozone Jan 2019 industrial sentiment decrease to 0.5 balance (forecast 0.5 balance) vs previous 2.3 balance (revised from 1.1 balance)
- Eurozone Jan 2019 services sentiment decrease to 11 balance (forecast 11.1 balance) vs previous 12.2 balance (revised from 12 balance)
- Eurozone Jan 2019 consumer confidence Final increase to -7.9 balance (forecast -7.9 balance) vs previous -8.3 balance (revised from -7.9 balance)
- Eurozone Jan 2019 business climate decrease to 0.69 (forecast 0.75 ) vs previous 0.86 (revised from 0.82 )
- United Kingdom Dec 2018 broad money increase to 2409868 GBP vs previous 2397137 GBP
- United Kingdom Dec 2018 m4 money supply increase to 0.4 % vs previous 0.1 % (revised from %)
- United Kingdom Dec 2018 BOE consumer credit decrease to 0.687 GBP (forecast 0.8 GBP) vs previous 0.958 GBP (revised from 0.924 GBP)
- United Kingdom Dec 2018 mortgage lending increase to 4.112 GBP (forecast 3.45 GBP) vs previous 3.631 GBP (revised from 3.453 GBP)
- United Kingdom Dec 2018 mortgage approvals decrease to 63.793 no. Of (forecast 63 no. Of) vs previous 63.952 no. Of (revised from 63.728 no. Of)
- Italy Jan 2019 consumer confidence increase to 114 (forecast 112.6 ) vs previous 113.2 (revised from 113.1 )
Economic Data Ahead
- (0815 ET/1315 GMT) Payrolls processor ADP releases U.S. employment report for the month of January. The report is expected to show that 178,000 jobs were added as compared with 271,000 jobs in December.
- (1000 ET/1500 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 0.5 percent in December after declining 0.7 percent in November.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending January 25.
Key Events Ahead
- (1400 ET/1900 GMT) The Federal Open Market Committee concludes its two-day meeting on interest rate policy and releases its statement.
- (1430 ET/1930 GMT) Federal Reserve Chairman Jerome Powell holds a press conference following Federal Open Market Committee meeting.
- (1850 ET/2350 GMT) Bank of Japan releases summary of opinions from board members at its Jan. 22-23 policy meeting - Tokyo
FX Beat
DXY: The dollar index steadied as investors wait for hints from Fed Chairman Jerome Powell on whether he has any inclination to slow the drawdown of the central bank’s balance sheet by up to $50 billion a month. The greenback against a basket of currencies trades 0.05 percent up at 95.85, having touched a low of 95.62 on Tuesday, its lowest since Jan. 15. FxWirePro's Hourly Dollar Strength Index stood at -44.71 (Neutral) by 1000 GMT.
EUR/USD: The euro trimmed gains after data showed Eurozone economic sentiment fell by more than expected to a two-year low in January amid growing concerns about the bloc's prospects at the beginning of the year. Moreover, separate data showing German consumer sentiment picked up heading into February supported the major. The European currency traded 0.05 percent up at 1.1432, having touched a high of 1.1450 on Tuesday, its highest since Jan. 15. FxWirePro's Hourly Euro Strength Index stood at 67.58 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1466 (December 31 High), a break above targets 1.1496 (January 2 High). On the downside, support is seen at 1.1370 (Jan. 17 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar consolidated within narrow ranges, as investors remained on the sidelines ahead of policy guidance from the U.S. Federal Reserve. Markets expect the Federal Reserve policymakers to reinforce their recent dovish stance, amid signs of a slowdown in the U.S. economy. The major was trading flat at 109.37, having hit a low of 109.13 on Tuesday, its lowest since January 18. FxWirePro's Hourly Yen Strength Index stood at 0.11 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. pending home sales and Fed's interest rate decision. Immediate resistance is located at 109.88 (Jan. 18 High), a break above targets 110.47 (Dec. 31 High). On the downside, support is seen at 108.70 (Jan. 2 Low), a break below could take it lower at 108.44 (Jan. 8 Low).
GBP/USD: Sterling rose above the 1.3100 handle amid growing expectations the UK government would still avoid exiting the European Union without an agreed trade deal. On Tuesday, Britain's lawmakers voted to demand Prime Minister Theresa May renegotiate the terms of Brexit and rejected an amendment that would have delayed Britain's scheduled March 29 departure. The major traded 0.3 percent up at 1.3099, having hit a high of 1.3217 on Friday; it’s highest since October 16. FxWirePro's Hourly Sterling Strength Index stood at -97.93 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.3170, a break above could take it near 1.3257 (October 12 High). On the downside, support is seen at 1.3021 (November 6 Low), a break below targets 1.3000. Against the euro, the pound was trading 0.3 percent up at 87.24 pence, having hit a high of 86.16 on Friday, it’s highest since May 2017.
USD/CHF: The Swiss franc eased, extending previous session losses, as risk sentiment improved on news that the United States and China will hold two days of talks in Washington starting today. The major trades 0.2 percent up at 0.9963, having touched a low of 0.99105 on Monday; it’s lowest since December 17. FxWirePro's Hourly Swiss Franc Strength Index stood at -44.71 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9986 January 22 High) and any break above will take the pair to next level till 1.0008 (December 5 High). The near-term support is around 0.9889 (December 7 Low), and any close below that level will drag it till 0.9840 (December 27 Low).
Equities Recap
European shares rallied, boosted by gains in luxury stocks, while greenback steadied ahead of the Federal Reserve's policy decision.
The pan-European STOXX 600 index advanced 0.1 percent at 357.52 points, while the FTSEurofirst 300 index surged 0.1 percent to 1,403.01 points.
Britain's FTSE 100 trades 0.9 percent up at 6,898.96 points, while mid-cap FTSE 250 gained 0.2 to 18,730.97 points.
Germany's DAX declined 0.3 percent at 11,185.22 points; France's CAC 40 trades 0.5 percent higher at 4,954.07 points.
Commodities Recap
Crude oil prices surged, boosted by concerns about supply disruptions following U.S. sanctions on Venezuela's oil industry. International benchmark Brent crude was trading 0.6 percent up at $61.57 per barrel by 1017 GMT, having hit a low of $59.47 on Monday, its lowest since January 15. U.S. West Texas Intermediate was trading 0.5 percent higher at $53.48 a barrel, after falling as low as $51.31 on Monday, its lowest since the January 17.
Gold prices rallied to their highest since May 2018, supported by uncertainty over U.S.-China trade relations and expectations the Federal Reserve will keep rates on hold. Spot gold was 0.1 percent up at $1,313.00 per ounce by 1025 GMT, having touched a high of $1,315.82 earlier, its highest level since May 14. U.S. gold futures rose 0.3 percent to $1,312.8 per ounce.
Treasuries Recap
The U.S. Treasuries traded nearly steady during late European session ahead of the country’s Q4 2018 gross domestic product (GDP) data, scheduled to be released today by 13:30GMT and the ADP non-farm employment change for January, due today at 13:15GMT. The yield on the benchmark 10-year Treasury yield rose 1 basis point to 2.721 percent, the super-long 30-year bond yields remained flat at 3.043 percent and the yield on the short-term 2-year traded tad higher at 2.573 percent.
The German bunds remained tad lower during European session ahead of the country’s consumer price inflation (CPI) data and unemployment change data for the month of January, scheduled to be released on January 30 and 31 by 13:00GMT and 08:55GMT respectively. The German 10-year bond yields, which move inversely to its price, remained tad higher at 0.198 percent, the yield on 30-year note hovered around 0.796 percent and the yield on short-term 2-year edged 1/2 basis point higher to -0.572 percent.
The Japanese government bonds remained tad lower during Asian session after the country’s retail sales for the month of December topped market expectations and now, focus has turned towards the industrial production data for the month of December, scheduled to be released on January 30 by 23:50GMT. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained 1/2 basis point higher at 0.005 percent, the yield on the long-term 30-year rose 1 basis point to 0.661 percent while the yield on short-term 2-year plunged 16 basis points.
The Australian government bonds slumped across the curve during Asian trading session following better than expected Q4 inflation data, where the Q4 core inflation came in in line with RBA’s expectations, while headline inflation was slightly stronger than market expectations. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1basis point to 2.253 percent, the yield on the long-term 30-year bond also jumped 1-1/2 basis points to 2.771 percent and the yield on short-term 2-year also traded 4 basis points higher at 1.873 percent.
