Posted at 11 February 2022 / Categories Market Roundups
Market Roundup
•U.S. Consumer Price Index rose 0.6% in Jan, up 7.5% yr/yr
•U.S. rate futures lift chances of 50 bps hike in March
•10-year yield tops 2% for first time since August 2019
•US Jan CPI, n.s.a (MoM) 0.84%, 0.31% previous
•US Jobless Claims 4-Week Avg 253.25K ,255.00K previous
•US Initial Jobless Claims 223K, 230Kforecast ,238K previous
•US Continuing Jobless Claims 1,621K,,1,615K, 1,628K previous
•US Jan Real Earnings (MoM) -0.5%, 0.1% previous
•US Jan CPI Index, s.a 281.93,280.13 previous
•US Jan CPI Index, n.s.a. 281.15, 280.39,278.80 previous
•US Jan CPI (YoY) 7.5%,7.3% forecast,7.0% previous
•US Jan Core CPI (MoM) 0.6%,0.5%,0.6% previous
•US Jan Core CPI (YoY) 6.0%, 5.9%,5.5% previous
•US Jan CPI (MoM) 0.6%,0.5%,0.6% previous
•US Jan Natural Gas Storage-222B,-222B, -268B previous
Looking Ahead - Economic Data (GMT)
•No data ahead
Looking Ahead - Events, Other Releases (GMT)
•No significant events
EUR/USD: The euro initially gained on Thursday but reversed course after hotter than expected US inflation data. U.S. consumer prices rose solidly in January, leading to the biggest annual increase in inflation in 40 years, which could fuel financial market speculation for a 50 basis points interest rate hike from the Federal Reserve next month. The Fed is broadly expected to begin raising rates at its March meeting.Federal funds rate futures have increased the chances of a half percentage-point tightening by the Federal Reserve at next month's meeting following the U.S. consumer prices report. 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: The pound held steady on Thursday after hotter-than-expected consumer price data in the United States raised expectations of quicker interest rate hikes by the Federal Reserve, pushing the dollar higher. The U.S. consumer price index rose 0.6% for January, one-tenth of a percentage point higher than expected, while year-over-year CPI rose 7.5%, or two-tenths more than economists expectation. The pound has traded skittishly in recent weeks amid a murkier outlook for the Bank of England's monetary policy, with its chief economist saying on Wednesday it is reasonable for central banks to withdraw detailed guidance because of economic uncertainty. Immediate resistance can be seen at 1.3592 (38.2%fib), an upside break can trigger rise towards 1.3664 (Higher BB ).On the downside, immediate support is seen at 1.3536 (21DMA), a break below could take the pair towards 1.3513(50%fib).
USD/CAD : The Canadian dollar weakened against the greenback on Thursday as data showing that U.S. inflation soared to a 40-year high in January raised expectations for aggressive interest rate hikes by the Federal Reserve . The greenback rallied as the U.S. consumer price index climbed at an annual rate of 7.5%. The price of oil, one of Canada's major exports, was pressured by the potential for U.S.-Iran nuclear talks to lead to an increase in global crude supplies. U.S. crude prices fell 0.5% to $89.26 a barrel. The Canadian dollar was down 0.3% at 1.2726 to the greenback, after trading in a range of 1.2666 to 1.2726.Immediate resistance can be seen at 1.2760 (23.6%fib), an upside break can trigger rise towards 1.2811 (Higher BB).On the downside, immediate support is seen at 1.2699 (38.2%fib), a break below could take the pair towards 1.2644(50%fib).
USD/JPY: The dollar strengthened against the Japanese yen on Thursday after higher-than-expected U.S. inflation data. U.S. inflation data came in higher than analyst forecasts, pointing to the need for aggressive policy tightening by the Federal Reserve. U.S. consumer prices rose by an annual 7.5% in January, the biggest annual increase in inflation in 40 years, which could fuel financial markets speculation for a 50 basis points interest rate hike from the Federal Reserve next month. The dollar strengthened 0.43% at 116.19 per Japanese yen to hit a five-week high. Strong resistance can be seen at 116.11 (23.6% fib), an upside break can trigger rise towards 116.35(Daily high).On the downside, immediate support is seen at 116.00 (Psychological level), a break below could take the pair towards 115.56(38.2% fib).
Equities Recap
European shares extended gains on Thursday, a day after their best session so far this year, led by German shares that got a boost from technology group Siemens' robust quarterly profit.
UK's benchmark FTSE 100 closed up by 0.38 percent, Germany's Dax ended up by 0.05 percent, France’s CAC finished the day down by 0.40percent.
Wall Street ended sharply lower on Thursday after U.S. consumer prices data came in hotter than expected and subsequent comments from a Federal Reserve official raised fears the U.S. central bank will hike rates aggressively to fight inflation.
Dow Jones closed down by 1.47% percent, S&P 500 closed down by 1.81% percent, Nasdaq settled down by 2.10% percent.
Treasuries Recap
U.S. 10-year Treasury yields rose on Thursday, with the benchmark 10-year U.S. Treasury yield touching 2% for the first time since August 2019 after a reading on inflation was higher than forecast and cemented expectations the Federal Reserve will take steps to combat rising prices.
Commodities Recap
Oil prices were steady on Thursday as markets weighed the possibility of an aggressive and unforecast rate hike for a steeper rise in energy demand.
Brent crude futures settled down 14 cents, or 0.2%, at $91.41 a barrel. U.S. Texas Intermediate crude , which rose more than $2 earlier in the day, settled up 22 cents, or 0.3% to $89.88 a barrel.
Gold prices touched their highest level in two-weeks on Thursday after data showed a spike in U.S. consumer prices boosted the metal's appeal as a hedge against inflation.
Spot gold prices fell as much as 0.6% after hotter-than-expected U.S. inflation data supported the case for aggressive rate hikes, but recouped losses to trade 0.2% higher at $1,835.71 per ounce by 13:43 ET (1843 GMT).U.S. gold futures settled mostly unchanged at $1,837.40.