Posted at 11 January 2022 / Categories Market Roundups
Market Roundup
• French 3-Month BTF Auction-0.633%,-0.667%
• French 6-Month BTF Auction-0.624%, 0.640%
• French 12-Month BTF Auction 0.624%, 0.635%
• US Wholesale Inventories (MoM) 1.4%,1.2% forecast, 2.3% previous
• US Dec CB Employment Trends Index 116.63, 114.49 previous
• US Nov Wholesale Trade Sales (MoM) 1.3%, 1.5%forecast, 2.2% previous
Looking Ahead - Economic Data (GMT)
•05:20 Japan Dec Bank Lending (YoY) 0.7% forecast, 0.6% previous
•05:20 Japan Nov Current Account n.s.a 0.585T forecast, 1.180T previous
•05:20 Japan Adjusted Current Account 1.03T previous
•07:00 China Dec PPI (YoY) 11.1% forecast, 12.9% previous
•07:00 China Dec CPI (MoM) 0.2% forecast, 0.4% previous
•07:00 China Dec CPI (YoY) 1.8% forecast, 2.3% previous
Looking Ahead - Economic events and other releases (GMT)
•06:30 Japan BoJ Governor Kuroda Speaks
Currency Summaries
EUR/USD: The euro declined on Monday as dollar strengthened amid rising bets U.S. inflation will bolster the case for higher interest rates while the European Central Bank's dovish stance on rising prices weighed on the euro. The dollar had met with selling late last week after a weaker-than-expected headline U.S. job-creation figure squeezed traders out of long dollar positions. But better-than-expected unemployment numbers and U.S. inflation figures this week is expected to show headline CPI at a red-hot 7% year-on-year on Wednesday, make a good case for interest rates to rise sooner rather than later. Immediate resistance can be seen at 1.1332 (38.2%fib), an upside break can trigger rise towards 1.1369 (23.6%fibB).On the downside, immediate support is seen at 1.1305 (50%fib), a break below could take the pair towards 1.1278 (61.8% fib).
GBP/USD: Sterling strengthened against dollar on Monday as expectations BoE will raise interest rates and easing fears about the adverse impact of the Omicron variant on the UK economy boosted sterling. Investors have ramped up expectations that the Bank of England will raise interest rates as early as next month after a surprise hike in December. Sterling has strengthened since mid-December as UK government resistance to further COVID-19 restrictions provided a much-needed boost to sentiment. A preliminary estimate of UK gross domestic product for November is due on Tuesday. Immediate resistance can be seen at 1.3599 (23.6%fib), an upside break can trigger rise towards 1.3658 (Higher BB).On the downside, immediate support is seen at 1.3561 (5DMA), a break below could take the pair towards 1.3531 (38.2 % fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday as oil prices fell and the prospect of rising U.S. interest rates weighed on investor sentiment. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to shifts in risk appetite. U.S. crude prices settled 0.9% lower at $78.23 a barrel as the rapid global rise in Omicron coronavirus infections weighed on the demand outlook, overtaking concerns about oil supply from Kazakhstan. The Canadian dollar was trading 0.3% lower at 1.2684 to the greenback, or 78.84 U.S. cents, after trading in a range of 1.2611 to 1.2697. Immediate resistance can be seen at 1.2687 (38.2%fib), an upside break can trigger rise towards 1.2751(23.6%fib).On the downside, immediate support is seen at 1.2636(50%fib), a break below could take the pair towards 1.2585 (61.8%fib).
USD/JPY: The dollar edged higher against the Japanese yen on Monday as bets that the U.S. Federal Reserve could raise interest rates as soon as March supported greenback across the board. Traders have ramped up bets for rate hikes this year after the U.S. central bank's minutes from the December meeting suggested an earlier-than-expected rate hike and the possibility the Fed may cut its bond holdings sooner than many initially thought.Investors will be watching inflation data and testimony from Fed Chair Jerome Powell and Fed Governor Lael Brainard this week for clues to the timing and speed of rate hikes. Strong resistance can be seen at 115.64 (38.2% fib), an upside break can trigger rise towards 116.23 (23.6% fib).On the downside, immediate support is seen at 115.14 (50%fib), a break below could take the pair towards 114.66(61.8%fib).
Equities Recap
European shares posted their biggest one-day drop since late November on Monday as rising bond yields weighed on the heavyweight technology sector, while the rapid spread of the Omicron COVID-19 variant also dented sentiment.
UK's benchmark FTSE 100 closed down by 0.53 percent, Germany's Dax ended down by 1.13 percent, France’s CAC finished the day down by 1.44 percent.
Wall Street's main indexes tumbled on Monday, as heavyweight technology stocks dropped on expectations of a sooner-than-expected rate hike that pushed U.S. Treasury yields to fresh two-year highs.
Dow Jones closed down by 1.22 percent, S&P 500 closed down by 1.61 percent, Nasdaq settled down by 0.05 % percent.
Treasuries Recap
The benchmark U.S. 10-year Treasury yield rose to its highest level in nearly two years on Monday, as investors continue to anticipate the Federal Reserve will begin its tightening policy with an interest rate hike as soon as March.
The yield on 10-year Treasury notes was up 3.6 basis points to 1.805% after climbing to 1.808%, its highest since Jan 21, 2020.
Commodities Recap
Gold edged lower on Monday, weighed by a firmer dollar and elevated Treasury yields, as investors focused on key inflation data due later this week that could underpin faster rate hikes by the U.S. Federal Reserve.
Spot gold was last down 0.2% at $1,799.75 per ounce at 13:37 ET (1837 GMT), having hit a three-week low on Friday. U.S. gold futures settled up 0.1% at $1,798.80.
Oil prices fell Monday as concerns about demand fears stoked by the rapid global rise in Omicron coronavirus infections overtook concerns about oil supply reduction from Kazakhstan.
Brent crude fell 88 cents, or 1.1%, to settle at $80.87 a barrel. U.S. West Texas Intermediate (WTI) crude was down 67 cents, or 0.9%, at $78.23.