Posted at 04 February 2022 / Categories Market Roundups
Market Roundup
• U.S. 10-year bond yields hit near one-week high
•Markets await U.S. non-farm payrolls data on Friday
• US Continuing Jobless Claims 1,628K,1,620K forecast,1,675K previous
• US Jobless Claims 4-Week Avg 255.00K,247.00K
• US Initial Jobless Claims 238K,245K,260K previous
• US Unit Labor Costs (QoQ) (Q4) 0.3%,1.5% forecast,9.6% previous
• US Jan Markit Composite PMI 51.1, 50.8 forecast, 57.0 previous
• US Jan Services PMI 51.2,50.9 forecast, 57.6 previous
• US Dec Factory Orders (MoM) -0.4%,-0.2% forecast, 1.6% previous
• US Jan ISM Non-Manufacturing PMI 59.9,59.5 forecast, 62.0 previous
Looking Ahead - Economic data ahead (GMT)
•No economic data ahead
Looking Ahead - Economic events and other releases (GMT)
• Australia RBA Monetary Policy Statement
Currency Summaries
EUR/USD: The euro surged to a three-week high against the U.S. dollar on Thursday after comments from European Central Bank President Christine Lagarde fuelled expectations of faster policy tightening, as she focused on the prospect of euro zone inflation overshooting. Euro zone money markets are currently pricing an 80% chance of a 10 basis-point hike in June and an almost 100% chance of 40 bps of hikes by year-end, from a 90% chance of 30 bps hikes before Lagarde's press conference. The single currency rose as high as $1.1452 , the highest since Jan. 14, and was last up 1.2% at $1.1441. The euro was on track for its largest daily percentage gain since early December 2020. Immediate resistance can be seen at 1.1451(23.6%fib), an upside break can trigger rise towards 1.1488(Higher BB).On the downside, immediate support is seen at 1.1412(38.2%fib), a break below could take the pair towards 1.1377 (50%fib).
GBP/USD: Sterling initially gained against dollar on Thursday but gave up ground as a rate hike from the Bank of England failed to keep the British currency afloat after a meeting of the European Central Bank. Traders interpreted the split as a hawkish skew from the BoE. But some flagged the markets’ forecast for a 1.50% bank rate by early next year was exaggerated. Versus the dollar, the pound rose 0.2% to $1.3603, after hitting its highest level against the greenback in two weeks. Immediate resistance can be seen at 1.3623 (38.2%fib), an upside break can trigger rise towards 1.3711(23.6%fib).On the downside, immediate support is seen at 1.3558(50%fib), a break below could take the pair towards 1.3447(61.8%fib).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Thursday but clawing back some of its earlier decline as a seven-year high for oil prices offset renewed volatility in global equity markets. The loonie was trading 0.1% lower at 1.2678 to the greenback, after trading in a range of1.2659 to 1.2715. Oil prices surged in late-day trading, sending the U.S. crude benchmark through $90 a barrel for the first time since 2014 due to ongoing supply worries and as frigid weather cascades across the United States. The Canadian dollar was last trading 0.03% higher at 1.3153 to the greenback .Immediate resistance can be seen at 1.32681 (9 DMA), an upside break can trigger rise towards 1.2702 (38.2%fib).On the downside, immediate support is seen at 1.2654 (50%fib), a break below could take the pair towards 1.2 (Psychological level).
USD/JPY: The dollar edged higher against the Japanese yen on Thursday after U.S. weekly jobless claims decline further The greenback rose as far as 114.75 yen, its highest since 1st Feb. The number of Americans filing new claims for unemployment benefits fell more than expected last week as COVID-19 infections subsided, suggesting that an anticipated slowdown in job growth in January was likely temporary. Initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 238,000 for the week ended Jan. 29. Economists polled had forecast 245,000 applications for the latest week. Strong resistance can be seen at 115.00(Psychological level), an upside break can trigger rise towards 115.50 (23.6%fib).On the downside, immediate support is seen at 114.88 (38.2%fib), a break below could take the pair towards 114.38 (50%fib).
Equities Recap
European stocks tumbled on Thursday, weighed down by a sell-off in the technology space after Facebook reported weak earnings and provided disappointing revenue guidance for the current quarter.
The UK's benchmark FTSE 100 closed down by 0.71percent, Germany's Dax ended down by 1.57 percent, and France’s CAC finished the day down by 1.54 percent.
Wall Street snapped a four-session winning streak on Thursday, with all three benchmarks ending lower after Facebook-owner Meta Platforms' dour forecast sent its stock plummeting and halted a nascent recovery built on upbeat earnings from other big tech.
Dow Jones was down by 1.42 percent, S&P 500 was down by 2.46 percent, Nasdaq was down by 3.74 percent.
Treasuries Recap
U.S. Treasury yields jumped on Thursday after the Bank of England's hawkish interest rate hike led investors to price for similar moves by the Federal Reserve as the central banks battle persistently high inflation.
Benchmark 10-year note yield was last at 1.822% after earlier reaching 1.847%, the highest since Jan. 28. It is holding below a two-year high of 1.902% reached on Jan. 19.
Commodities Recap
Gold prices steadied on Thursday, as a weaker dollar and risk-off sentiment in the equity markets helped counteract pressure from a jump in U.S. Treasury yields.
Spot gold was flat at $1,806.07 an ounce, by 14:07 EST (1907 GMT). It had earlier fallen 1% to a session low of $1,787.70 due to a spike in U.S. Treasury yields on rising U.S. rate hike bets.U.S. gold futures settled 0.3% lower at $1,804.10.
Oil prices surged in late-day trading Thursday, sending the U.S. crude benchmark through $90 a barrel for the first time since 2014 due to ongoing supply worries and as frigid weather cascades across the United States.
Global benchmark Brent crude settled at $91.11 a barrel, up $1.64, or 1.8%, while West Texas Intermediate crude soared $2.01, or 2.3%, higher to end at $90.27 a barrel, the first time the U.S. benchmark has closed above the $90-level since Oct.6, 2014.