Posted at 01 February 2022 / Categories Market Roundups
Market Roundup
• Canada Dec RMPI (YoY) 29.0%,36.2% previous
•Canada Dec RMPI (MoM) -2.9%,-1.3% forecast,-1.0% previous
•Canada Dec IPPI (YoY) 16.1%,18.1% previous
•French 12-Month BTF Auction -0.643%, -0.663% previous
•French 3-Month BTF Auction -0.643%,-0.672% previous
•US Jan Chicago PMI 65.2, 61.7 forecast, 63.1 previous
•US Dallas Jan Fed Mfg Business Index 2.0, 8.1previous
Looking Ahead – Economic Data (GMT)
•No data ahead
Looking Ahead - Economic events and other releases (GMT)
•03:30 Australian RBA Interest Rate Decision 0.10% forecast, 0.10% previous
•03:30 Australia RBA Rate Statement
Currency Summaries
EUR/USD: The euro rose against dollar on Monday as above forecast German inflation data boosted euro acrss the board. German annual inflation slowed in January but was still higher than expected by analysts and well above the European Central Bank's price stability target of 2% for the euro zone as a whole, preliminary data showed on Monday. Consumer prices, harmonised to make them comparable with inflation data from other European Union countries (HICP), rose 5.1% year on year compared with 5.7% in December, the Federal Statistics Office said.. Immediate resistance can be seen at 1.1209(50%fib), an upside break can trigger rise towards 1.1239(61.8%fib).On the downside, immediate support is seen at 1.1169(38.2%fib), a break below could take the pair towards 1.1100 (23.6%fib).
GBP/USD: Sterling firmed against dollar on Monday at the start of a week where the Bank of England is expected to raise interest rates for the second time in as many months. The pound was up versus the dollar at $1.34, having earlier risen as high as $1.3458 but staying above one-month lows of $1.3359 hit last week. The British currency is set to end January with a loss against the dollar, which has benefited from the rapid ramping up of Fed rate hike bets. Against the euro it is up more than 1% this month .Most economists expect the Bank of England on track for second rate rise in under two months to raise rates to 0.5% on Feb. 3 from 0.25%.Immediate resistance can be seen at 1.3429 (38.2%fib), an upside break can trigger rise towards 1.3449(23.6%fib).On the downside, immediate support is seen at 1.3369(50%fib), a break below could take the pair towards 1.3312(61.8%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Monday, clawing back half of its January decline, as oil prices rose and equity markets globally rebounded after a volatile start to the year. Stocks rallied as traders put aside concerns about inflation and the crisis in Ukraine to dip back in, but global equities were still headed for their worst January since 2016. A supply shortage and political tensions helped oil prices notch their biggest monthly gain in almost a year. U.S. crude prices settled 1.5% higher on Monday at $88.15 a barrel. The loonie was trading 0.5% higher at 1.2695 to the greenback, after trading in a range of 1.2683 to 1.2777.Immediate resistance can be seen at 1.2767(23.6%fib), an upside break can trigger rise towards 1.2801 (Higher BB).On the downside, immediate support is seen at 1.2704 (38.2%fib), a break below could take the pair towards 1.2665 (50%fib).
USD/JPY: The dollar edged lower against the Japanese yen on Monday as investors consolidated gains after high on Friday on expectations of a faster pace of rate hikes by the Federal Reserve. With the Fed clearly signalling last week that it intends to raise interest rates as early as the March 15-16 policy meeting. Fed funds futures late Monday have priced in just under five hikes for 2022, or about 121 basis points of tightening. They also showed a 17% chance of a 50 basis-point increase in March , down from as high as 32% on Friday. The dollar index slid 0.7% on the day, its highest daily percentage rise in two months. For January, the greenback was up nearly 1%. Against the yen, the dollar fell 0.1% to 115.14 yen. Strong resistance can be seen at 115.73(23.6%fib), an upside break can trigger rise towards 116.06 (Higher BB).On the downside, immediate support is seen at 115.10 (38.2%fib), a break below could take the pair towards 114.62 (50%fib).
Equities Recap
European shares rose on Monday as investors digested new optimism from the U.S. Treasury's top economist that inflationary pressures should ease in 2022 due to weaker demand for goods, easing supply bottlenecks and a receding coronavirus pandemic..
UK's benchmark FTSE 100 closed down by 0.02 percent, Germany's Dax ended up by 0.99 percent, France’s CAC finished the day upby 0.48 percent.
U.S. stocks closed higher on Monday, at the end of a volatile month for Wall Street where the tech-heavy Nasdaq narrowly avoided its worst ever start to the year and the S&P 500 recorded its weakest January performance since 2009.
Dow Jones closed up by 1.17% percent, S&P 500 closed up by 1.89 % percent, Nasdaq settled down by 3.41% percent.
Treasuries Recap
Yields of U.S. Treasuries that are most sensitive to inflation expectations rose near their highest levels since February 2020 Monday, extending a bond market selloff that by some measures is the worst in 13 years.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 2.5 basis points at 1.197%. That capped a 45 basis point move in January, which is on track for the largest monthly increase since Jan. 2009.
Commodities Recap
Gold prices edged up on Monday even as expectations for interest rate hikes by the U.S. Federal Reserve put non-yielding bullion on track for its worst monthly performance since September, while palladium braced for its best month in 14 years.
Spot gold was up 0.4% at $1,797.79 per ounce by 14:01 EST (1901 GMT) and was headed for a loss of 1.7% for the month. U.S. gold futures settled 0.6% higher at $1,796.40.
Oil prices rose on Monday to end January with their biggest monthly gain in a year, boosted by a supply shortage and political tensions in Eastern Europe and the Middle East.
The most-active Brent contract, for April delivery , traded 74 cents higher, or 0.8%, to settle at $89.26 per barrel. The front-month contract, for March delivery , which expired at the end of the session, rose $1.18, or 1.3%, to finish at $91.21.