Posted at 10 February 2022 / Categories Market Roundups
Market Roundup
•US Dec Wholesale Trade Sales (MoM) 0.2%, 1.2%forecast,1.3% previous
•US Wholesale Inventories (MoM) 2.2%, 2.1% previous
•US Crude Oil Inventories -4.756M, 0.369M forecast,-1.046M previous
•US Cushing Crude Oil Inventories-2.801M, -1.173M previous
Looking Ahead Economic Data
•09:00 China M2 Money Stock (YoY) 9.0% previous
•09:00 China Total Social Financing 2,370.0B previous
•09:00 China New Loans 1,130.0B previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro extended gains against dollar on Wednesday following a hawkish shift from the European Central Bank last week and ahead of key data on U.S. consumer prices due on Thursday. Investors have been revising their forecasts for ECB rate hikes after the bank caught them off guard last week, with President Christine Lagarde flagging for the first time that monetary tightening was a possibility this year. Seeking to temper investors' growing expectations for hard-line action, Lagarde calmed markets when she said on Monday there was no need for extensive tightening. But the big shift in central bank policy expectations over the past week, in particular from the ECB, has dampened the dollar's recent upside. The dollar index 0.056%, with the euro up 0.1% to $1.1425.Immediate resistance can be seen at 1.1443(38.2% fib), an upside break can trigger rise towards 1.1482 (23.6%fib).On the downside, immediate support is seen at 1.1408 (50 % fib), a break below could take the pair towards 1.1378 (61.8% fib).
GBP/USD: Sterling was little changed against the dollar on Wednesday amid continued deep uncertainty about the future path of the Bank of England’s monetary policy.Bank of England Chief Economist Huw Pill said on Wednesday that it was reasonable for central banks to withdraw from providing detailed guidance on the policy outlook as prospects for the economy were not clear cut. Money markets are still pricing in a 25 bps rate increase in March and 125 bps by December 2022, but some analysts have warned about the risks of excessive expectations. Sterling was little changed versus dollar at $1.3532.Immediate resistance can be seen at 1.3589 (38.2%fib), an upside break can trigger rise towards 1.3660 (20th Jan high ).On the downside, immediate support is seen at 1.3532 (5DMA), a break below could take the pair towards 1.3513(50%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday, but stayed within its recent range as the Bank of Canada reiterated that interest rate hikes are coming and investors turned attention to a U.S. inflation report . Investors are awaiting U.S. consumer prices data on Thursday for new clues on the Federal Reserve's plans to hike interest rates. U.S. crude prices settled 0.3% higher at $89.66 a barrel as data showed a drop in U.S. inventories. Oil is one of Canada's major exports. The loonie strengthened 0.3% to 1.2675 per greenback , after trading in a range of 1.2666 to 1.2715.Immediate resistance can be seen at 1.2695 (38.2%fib), an upside break can trigger rise towards 1.2758 (23.6%fib).On the downside, immediate support is seen at 1.2646(50%fib), a break below could take the pair towards 1.2594(61.8%fib).
USD/JPY: The dollar strengthened against the Japanese yen on Wednesday as investors awaited US inflation data. The CPI print may offer new indications about the pace of the Federal Reserve's monetary tightening, and investors are bracing for higher-than expected numbers that would signal more aggressive interest rate hikes. That readout is expected to show a 0.5% month-over-month increase in January, and 7.3% for the year. U.S. central bank officials have signalled they will start raising interest rates next month to fight high inflation. Atlanta Fed president Raphael Bostic said on Wednesday U.S. may be nearing a turn lower in inflation, but added he is still leaning towards a slightly faster pace of rate increases this year. Strong resistance can be seen at 115.70 (23.6% fib), an upside break can trigger rise towards 115.86 Higher BB).On the downside, immediate support is seen at 115.15(5DMA), a break below could take the pair towards 115.06(38.2% fib).
Equities Recap
European stocks surged on Wednesday to their biggest daily gain in two months, buoyed by a batch of strong fourth-quarter trading updates, while Volkswagen surged on the possible listing of its luxury brand Porsche AG.
UK's benchmark FTSE 100 closed up by 1.01 percent, Germany's Dax ended up by 1.57 percent, France’s CAC finished the day up by 1.46 percent.
Wall Street jumped on Wednesday, closing sharply higher as megacap growth stocks powered up thanks to a pause in rising interest rates, and upbeat earnings reports also encouraged investors to buy.
Dow Jones closed up by 0.86% percent, S&P 500 closed up by 1.45 % percent, Nasdaq settled up by 2.08% percent.
Treasuries Recap
Benchmark 10-year Treasury yields retreated from 27-month highs on Wednesday as the Treasury Department sold new 10-year notes to strong demand, and as investors waited on highly anticipated inflation data due on Thursday.
The benchmark 10-year U.S. Treasury yield slipped from multi-year highs hit in the previous session.
Commodities Recap
Gold eked out gains on Wednesday, helped by a weaker dollar and a retreat in U.S. Treasury yields, although prices moved in a tight range as investors refrained from making large bets ahead of U.S. inflation data.
Spot gold rose 0.5% to $1,834.25 per ounce by 13:42 EST (1842 GMT). U.S. gold futures settled up 0.5% at $1,836.60.
Oil prices rallied on Wednesday after U.S. crude inventories dropped by nearly 5 million barrels and fuel demand rose to an all-time high, underscoring the market's ongoing tightness.
Brent crude futures settled up 77 cents, or 0.9%, to $91.55 a barrel. U.S. West Texas Intermediate crude (WTI) ended up 30 cents to $89.66 a barrel.