Posted at 12 January 2022 / Categories Market Roundups
Market Roundup
• US Redbook (YoY) 14.4% forecast ,18.8% previous
• US IBD/TIPP Economic optimism 44.7, 50.2 forecast , 48.4 previous
Looking Ahead - Economic Data (GMT)
•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)
• 01:00 Japan BoJ Governor Kuroda Speaks
Currency Summaries
EUR/USD: The euro strengthened against dollar on Tuesday after Federal Reserve Chairman Jerome Powell said the central bank was likely to raise interest rates this year, remarks that tempered demand for risky assets. In comments to U.S. lawmakers, Federal Reserve Chairman Jerome Powell said he expected the Fed would raise rates and end its asset purchases this year, but that the central bank had made no decision about the timing for tightening monetary policy. The dollar index, which measures the currency against a basket of six major currencies, fell 0.32% to 95.649. A softer dollar lifted the euro up 0.3% to $1.13645.Immediate resistance can be seen at 1.1370 (23.6%fib), an upside break can trigger rise towards 1.1385 (Higher BB).On the downside, immediate support is seen at 1.1348 (5DMA), a break below could take the pair towards 1.1336 (38.2% fib).
GBP/USD: Sterling rose against dollar on Tuesday as expectations that the Bank of England will raise interest rates further. The pound rose 0.26% versus the dollar to $1.3620, its highest since Nov. 4, when it slid 1.5% on the day after the BoE surprised the market by keeping interest rates unchanged. Over the past weeks, investors have ramped up expectations that the BoE will raise interest rates as early as next month after a surprise hike in December by 15 basis points, to 0.25%. Immediate resistance can be seen at 1.3642 (23.6%fib), an upside break can trigger rise towards 1.3690 (Higher BB).On the downside, immediate support is seen at 1.3594 (5DMA), a break below could take the pair towards 1.3570 (38.2 % fib).
USD/CAD: The Canadian dollar strengthened to its highest level in nearly two months against its U.S. counterpart on Tuesday as oil prices rose and testimony by Federal Reserve Chair Jerome Powell brought some relief to financial markets. The price of oil, one of Canada's major exports, was supported by tight supply and hopes that the spread of the Omicron variant of the coronavirus will not derail a global demand recovery. The loonie was trading 0.8% higher at 1.2565 to the greenback, after touching its strongest level since Nov. 17 at 1.2567 .Immediate resistance can be seen at 1.2603 (50%fib) an upside break can trigger rise towards 1.2653 (38.2%fib).On the downside, immediate support is seen at 1.2557 (61.8%fib), a break below could take the pair towards 1.2505(Lower BB).
USD/JPY: The dollar initially gained against the Japanese yen on Tuesday but gave up ground after U.S. Federal Reserve Chair Jerome Powell's testimony before Congress did not spring any surprises in terms of monetary tightening. Powell noted that policymakers were still debating approaches to reducing the Fed's balance sheet and said inflation is running very far above target and "it is a long road" to anything close to restrictive policy.U Focus now shifts to the U.S. core CPI data on Wednesday, which is expected to have risen by an annual 5.4% in December from 4.9% in the prior month. Strong resistance can be seen at 115.58 (38.2% fib), an upside break can trigger rise towards 116.19 (23.6% fib).On the downside, immediate support is seen at 115.11 (50%fib), a break below could take the pair towards 114.74 (61.8%fib).
Equities Recap
Investors venturing back into tech shares along with upbeat expectations for the fourth-quarter earnings season led European stocks to recover on Tuesday, after fears of rising rates drove heavy losses in recent sessions.
UK's benchmark FTSE 100 closed up by 1.13 percent, Germany's Dax ended down by 0.27 percent, France’s CAC finished the day up by 0.44 percent.
U.S. stock indexes gained ground on Tuesday with Nasdaq leading the advance as investors were relieved that Federal Reserve Chair Jerome Powell's testimony to Congress did not include any major surprises.
Dow Jones closed down by 0.98% percent, S&P 500 closed down by 1.71% percent, Nasdaq settled down by 1.87% percent.
Treasuries Recap
U.S. Treasury yields dipped on Tuesday, with short-dated yields pulling back from near two-year highs following comments from Federal Reserve Chair Jerome Powell on how the central bank plans to combat inflation.
The yield on 10-year Treasury notes was down 3.4 basis points to 1.746%.
Commodities Recap
Gold prices climbed 1% on Tuesday as the dollar slipped after U.S. Federal Reserve Chair Jerome Powell's testimony before Congress did not spring any surprises in terms of monetary tightening, while a retreat in bond yields also lent support.
Spot gold rose 1% to $1,819.58 per ounce by 14:26 ET (1926 GMT). U.S. gold futures settled up 1.1% at $1,818.50.
Oil soared nearly 4% on Tuesday, supported by tight supply and expectations that rising coronavirus cases and the spread of the Omicron variant will not derail a global demand recovery.
Brent crude gained $2.85, or 3.5%, to $83.72 a barrel, its highest settlement since early November. The global benchmark dropped 1% on Monday.