Posted at 08 February 2023 / Categories Market Roundups
Market Roundup
•US Exports 250.20B , 251.90B previous
•US Imports 317.60B ,313.40B previous
•US Dec Trade Balance-67.40B,-68.50B forecast,-61.50B previous
•Canada Dec Trade Balance -0.16B, -0.50B forecast,-0.04B previous
•Canada Dec Imports 63.13B, 64.41B previous
•Canada Dec Exports62.97B, 64.37B previous
•US Redbook (YoY) 4.3%,4.9% previous
•New Zealand GlobalDairyTrade Price Index3.2%,-0.1% previous
•US IBD/TIPP Economic Optimism 45.1,42.3 previous
Looking Ahead – Economic data(GMT)
•05:00 Japan Jan Economy Watchers Current Index 48.4 forecast, 47.9 previous
Looking Ahead - Economic events and other releases (GMT)
• No events ahead
Currency Summaries
EUR/USD: The euro initially dipped against the dollar on Tuesday but recovered some ground as investors digested comments from U.S. Federal Reserve Chair Jerome Powell on the outlook for rate-hike policy. Powell's comments were less hawkish than market participants expected, confirming the view of many that the Fed was unlikely to hike rates beyond the 5.00%-5.25% band. Powell said on Tuesday the latest U.S. employment report showed the process for getting inflation back near the central bank’s 2% target will take quite a bit of time.In the wake of Powell’s speech, the dollar slipped from one-month highs. Immediate resistance can be seen at 1.0777(5DMA), an upside break can trigger rise towards 1.0799 (Feb 6th high).On the downside, immediate support is seen at 1.0685(50DMA), a break below could take the pair towards 1.0600(Psychological level).
GBP/USD: Sterling recovered from one-month low against dollar on Tuesday as the market perceived comments by the Federal Reserve chair to be dovish. Powell said disinflation has started and that he expects significant declines in inflation this year, remarks that echoed what he said after a policy-setting meeting last week that many in the market thought the Fed chair would walk back.Powell's remarks at the Economic Club of Washington fed investor hopes for an easing of monetary tightening even as he reiterated getting inflation back to the Fed's 2% target will take time and will not be painless. Immediate resistance can be seen at 1.2082(5DMA), an upside break can trigger rise towards 1.2159(23.6%fib).On the downside, immediate support is seen at 1.1963(38.2%fib), a break below could take the pair towards 1.1825 (50%fib).
USD/CAD: The Canadian dollar rallied against its U.S. counterpart on Tuesday, recovering from a two-week low, as comments by the chief policymakers at the Bank of Canada and the Federal Reserve calmed investor jitters about the interest rate outlook. Canada posted a C$160 million ($119.1 million) trade deficit in December as energy products dragged down exports and slower economic growth weighed on consumer goods imports. The loonie was trading 0.3% higher at 1.3410 per U.S. dollar, after trading in a range of 1.3381 to 1.3468. The price of oil, one of Canada's major exports, settled up 4.1% at $77.14 a barrel on reduced rate hike concerns and recovering demand in China.Immediate resistance can be seen at 1.3424 (38.2%fib), an upside break can trigger rise towards 1.3484 (23.6%fib).On the downside, immediate support is seen at 1.3378 (50%fib), a break below could take the pair towards 1.3326 (61.8%fib).
USD/JPY: The dollar dipped against yen on Tuesday as Powell declined to equate the surprising strength in the job market with an expectation that interest rates would need to be higher than previously thought. Speaking before the Economic Club of Washington, Powell declined several times to say explicitly that last week's surprisingly strong employment report would necessarily force the U.S. central bank's benchmark interest rate higher than the 5.00%-5.25% range currently anticipated. There is a significant road ahead before the Fed could begin rate cuts, he added. Strong resistance can be seen at 131.58(18th Jan high), an upside break can trigger rise towards 132.48 (38.2%fib).On the downside, immediate support is seen at 131.31(23.6%fib), a break below could take the pair towards 131.00 (Psychological level)
Equities Recap
European stocks closed on a mixed note on Tuesday with investors largely making cautious moves amid concerns about slowing global economy, and geopolitical tensions.
UK's benchmark FTSE 100 closed up by 0.36 percent, Germany's Dax ended down by 0.16 percent, France’s CAC finished the day down by 0.07 percent.
U.S. stocks rallied to a convincingly higher close on Tuesday, but trade was choppy as investors digested comments from Federal Reserve Chair Jerome Powell about how long the central bank may need to tame inflation.
Dow Jones closed up by 0.78% percent, S&P 500 closed by 1.29% percent, Nasdaq settled up by 1.90% percent.
Treasuries Recap
Benchmark 10-year U.S. Treasury yields were slightly higher on Wednesday after Federal Reserve Chair Jerome Powell said interest rates may need to move higher than expected if strong economic data threatens progress in lowering inflation.
Benchmark 10-year yields fell to a session low of 3.597% after Powell's comments before rising as high as 3.681%, the highest level since Jan. 6. Two-year yields were last at 4.426%, after reaching 4.493% on Monday, also the highest since Jan. 6.
Commodities Recap
Gold eked out gains on Tuesday, tracking a slight pullback in the dollar and as investors digested comments from U.S. Federal Reserve Chair Jerome Powell on the outlook for rate-hike policy.
Spot gold rose 0.2% to $1,870.49 per ounce by 2:02 p.m. ET (1902 GMT). U.S. gold futures settled up 0.3% at $1,884.80.
Oil prices climbed more than 3% on Tuesday after the head of the U.S. central bank eased market concerns over interest rate hikes, while recovering demand in China also boosted prices.
Brent crude futures were up $2.70, or 3.3%, to $83.69 a barrel, while U.S. West Texas Intermediate crude futures rose $3.03, or 4.1%, to $77.14 per barrel.