Posted at 02 February 2023 / Categories Market Roundups
Market Roundup
•U.S. factory orders rebound, but machinery orders dip
•ECB promises one more 50 bps rate hike
•BoE signals rates near peak
•US Unit Labor Costs (QoQ) (Q4) 1.1%, 1.5% forecast, 2.4% previous
•US Nonfarm Productivity (QoQ) (Q4) 3.0%,2.4% forecast, 0.8% previous
•Canada Dec Building Permits (MoM) -7.3%, -5.0% forecast, 14.1% previous
•US Initial Jobless Claims 183K,200K forecast, 186K previous
•US Continuing Jobless Claims 1,655K, 1,677K forecast,1,675K previous
•US Jobless Claims 4-Week Avg. 191.75K,197.50K previous
•US Dec Factory orders ex transportation (MoM) -1.2%,-0.8% previous
•US Dec Durables Excluding Transport (MoM) -0.2% , -0.1% previous
•US Dec Durables Excluding Defense (MoM) 6.2%, 6.3% previous
•US Dec Factory Orders (MoM) 1.8%,2.3% forecast,-1.8% previous
•US Natural Gas Storage -151B ,-142B forecast,-91B previous
•US 4-Week Bill Auction 4.490%, 4.500% previous
•US 8-Week Bill Auction 4.505%,4.525% previous
Looking Ahead - Economic data (GMT)
•00:30 Japan Jan Services PMI 52.4 forecast, 51.1 previous
•00:30 Australia Invest Housing Finance (MoM) -3.6% previous
•00:30 Australia Home Loans (MoM) -2.8% forecast, -3.8% previous
•01:45 China Jan Caixin Services PMI 51.6 forecast, 48.0 previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro dipped against the dollar on Thursday after the European Central Bank raised interest rates by a widely expected 50 basis points. The ECB struck a more hawkish note compared to commentary by the U.S. Federal Reserve and the Bank of England. However, analysts pointed out the ECB's comments did not provide any new hawkish surprises and investors were still hopeful the hiking cycle would end soon, even after President Christine Lagarde pushed back against the narrative. The euro fell 0.70% on the day to $1.0913.Immediate resistance can be seen at 1.1038 (23.6%fib), an upside break can trigger rise towards 1.1090 (Higher BB).On the downside, immediate support is seen at 1.0930(5DMA), a break below could take the pair towards 1.0840(38.2%fib).
GBP/USD: The British pound fell against the dollar on Thursday after the Bank of England raised its main interest rate to the highest level since 2008 while hinting that rates were near their peak.The BoE voted 7-2 to raise its interest rate by 50 basis points to 4.00% in its 10th straight hike, a move mostly expected by investors and economists.But it dropped its pledge to respond forcefully, as necessary to signs of further inflationary pressure, adding that inflation had probably peaked. The pound was down 0.6% against the dollar to $1.2296. It dropped as low as $1.2265 after the decision. Immediate resistance can be seen at 1.2415(23.6%fib), an upside break can trigger rise towards 1.2485(Higher BB).On the downside, immediate support is seen at 1.2284(21DMA), a break below could take the pair towards 1.2200(Psychological level).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Thursday, pulling back from its highest level in 2-1/2 months, as investors turned attention to U.S. jobs data that could offer clues on the Federal Reserve policy outlook. Economists expect that data on Friday will show the U.S. economy adding 185,000 jobs in January, which would be a smaller increase than in December. The price of oil, one of Canada’s major exports, slipped as looming sanctions on Russian oil products added to uncertainty over supply. U.S. crude prices settled 0.7% lower at $75.88 a barrel. The loonie was trading 0.2% lower at 1.3320 to the greenback, after earlier touching its strongest since Nov. 16 at 1.3263. Immediate resistance can be seen at 1.3322 (5DMA), an upside break can trigger rise towards 1.3355 (38.2%fib).On the downside, immediate support is seen at 1.3272 (23.6%fib), a break below could take the pair towards 1.3243 (Lower BB).
USD/JPY: The dollar initially dipped against yen on Thursday but recovered ground as dollar regained lost ground as policy announcements from a host of central banks added to optimism that the cycles of interest rate hikes may be near an end. The U.S. central bank on Wednesday raised benchmark borrowing costs by 25 basis points (bps) to a range of 4.5% to 4.75%, its smallest hike so far in an 11-month tightening cycle.Meanwhile, Powell warned about further monetary policy tightening as inflation remained too high, but noted that the progress on disinflation was in its early stages. Strong resistance can be seen at 129.30(5DMA), an upside break can trigger rise towards 130.60 (38.2%fib).On the downside, immediate support is seen at 128.23(23.6%fib), a break below could take the pair towards 127.04 (Lower BB).
Equities Recap
Euro zone shares hit their highest level in nearly a year on Thursday, as hawkish messages from the European Central Bank (ECB) failed to derail investor hopes the global rate hiking cycle was close to an end.
UK's benchmark FTSE 100 closed up by 0.76 percent, Germany's Dax ended up by 2.12 percent, France’s CAC finished the day up by 1.26 percent.
The Nasdaq and S&P 500 ended higher on Thursday and touched roughly five-month highs as a more dovish-than-expected message from Federal Reserve Chair Jerome Powell boosted equities and Meta Platforms shares soared on rigorous cost controls.
Dow Jones closed down by 0.11% percent, S&P 500 closed up by 1.47% percent, Nasdaq settled up by 3.25% percent.
Treasuries Recap
U.S. Treasury yields were little changed on Thursday as investors digested a more dovish tone from the Federal Reserve and prepared for a closely watched jobs report on Friday.
The yield on benchmark 10-year Treasury notes was flat at 3.398%. The yield on the 30-year Treasury bond was little changed at 3.552%..
Commodities Recap
Gold prices slipped nearly 2% on Thursday as the dollar rebounded and some investors locked in profits after bullion scaled a nine-month peak on dovish remarks from Federal Reserve Chair Jerome Powell.
Spot gold dipped 1.8% to $1,915.79 per ounce by 1:52 p.m. ET (1852 GMT), having hit its highest since April 2022 earlier in the session.U.S. gold futures settled down 0.6% at $1,930.8.
Oil prices settled lower on Thursday as U.S. industrial-linked factory orders dipped, while the dollar strengthened, making crude more expensive for non-American buyers.
Brent crude futures settled at $82.17 a barrel, shedding 67 cents, or 0.8%. West Texas Intermediate crude (WTI) settled at $75.88 a barrel, down 53 cents, or 0.7%.