Posted at 01 February 2024 / Categories Market Roundups
Market Roundup
•Sweden Interest Rate Decision 4.00%, 4.00% forecast,4.00% previous
•Italian Jan Manufacturing PMI 48.5,47.0 forecast,45.3 previous
•French Jan Manufacturing PMI 43.1,43.2 forecast,42.1 previous
•German Jan Manufacturing PMI 45.5,45.4 forecast,43.3 previous
•Greek Jan Manufacturing PMI 54.7, 51.3 previous
•EU Jan Manufacturing PMI 46.6,46.6 forecast,44.4 previous
•UK Jan Manufacturing PMI 47.0,47.3 forecast,46.2 previous
•EU Jan CPI (YoY) 2.8%,2.7% forecast,2.9% previous
•EU Dec Unemployment Rate 6.4%,6.4% forecast,6.4% previous
•Italian Jan CPI (MoM) 0.3%,0.5% forecast,0.2% previous
•EU Jan Core CPI (YoY) 3.3%,3.2% forecast,3.4% previous
•EU Jan CPI (MoM) -0.4%,-0.4% forecast,0.2% previous
•UK Jan BoE Interest Rate Decision 5.25%, 5.25% forecast,5.25% previous
•UK Feb BoE MPC vote cut 1,0 forecast,0 previous
•UK Feb BoE MPC vote unchanged 6,7 forecast, 6 previous
•UK Feb BoE MPC vote hike 2,2 forecast,3 previous
•US Jan Challenger Job Cuts 82.307K, 34.817K previous
•US Jan Challenger Job Cuts (YoY)-20.0%,-20.2% previous
Looking Ahead Economic Data(GMT)
•13:30 US Unit Labor Costs (QoQ) (Q4) 1.3% forecast, -1.2% previous
•13:30 US Nonfarm Productivity (QoQ) (Q4) 2.4% forecast,5.2% previous
•13:30 US Initial Jobless Claims 213K forecast,214K previous
•13:30 US Continuing Jobless Claims 1,840K forecast, 1,833K previous
•13:30 US Jobless Claims 4-Week Avg. 202.25K previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro dipped against dollar on Thursday after Federal Reserve Chair Jerome Powell pushed back on the idea of a U.S. interest rate cut as soon as March. The Fed left interest rates unchanged and dismissed the idea that it could decrease rates in the spring, but eliminated a long-standing reference to possible additional hikes. According to the CME Fed Watch, opens new tab Tool, traders now expect about a 92% chance of a rate cut in May. Dollar held 0.4% higher in response, while benchmark 10-year U.S. Treasury yields languished near their lowest in more than two weeks. The euro was last down 0.03% against the dollar to $1.0815.Immediate resistance can be seen at 1.0844(38.2%fib), an upside break can trigger rise towards 1.0893( 50%fib).On the downside, immediate support is seen at 1.0783 (23.6%fib), a break below could take the pair towards 1.0767 (Lower BB).
GBP/USD: The British pound initially fell against dollar on Thursday but some recovered ground after the Bank of England held rates steady . Six out of nine members of the Monetary Policy Committee voted to keep rates at a 15-year high of 5.25%. Two voted for a 0.25 percentage-point hike, while one voted for a cut of the same size.It marked the first time since August 2008 - early in the global financial crisis that different policymakers have voted to move interest rates up and down at the same meeting. Traders reduced bets on BoE rate cuts in May after the meeting. Pricing in derivatives markets last indicated roughly a 50% chance of a rate cut by May, having implied roughly a two-thirds chance before the meeting. The pound was last down 0.1% against the dollar at $1.2674, compared with $1.2635 before the decision. Immediate resistance can be seen at 1.2756(23.6%fib), an upside break can trigger rise towards 1.2793(Higher BB).On the downside, immediate support is seen at 1.2631 (38.2%fib), a break below could take the pair towards 1.2613(Lower BB).
USD/CHF: The U.S. dollar strengthened against Swiss franc on Thursday after Federal Reserve Chair Jerome Powell pushing back on the idea of a U.S. interest rate cut as soon as March. Powell said rate cuts would come once the Fed becomes more secure that inflation will continue to decline from a level it still characterizes as "elevated," at least on a one-year basis, with the personal consumption expenditures price index, a key measure used by policymakers, at 2.6% on an annual basis as of December. The dollar was up about 0.2% against a basket of global currencies , adding to Wednesday's gain when Powell made the comments after Fed officials left rates unchanged but dropped a longstanding reference to possible further hikes in borrowing costs. Immediate resistance can be seen at 0.8651(38.2%fib), an upside break can trigger rise towards 0.8718(23.6%fib).On the downside, immediate support is seen at 0.8592(50%fib), a break below could take the pair towards 0.8532(61.8%fib)
USD/JPY: The dollar edged higher against the yen on Thursday as Fed chair's comments boost dollar. The Federal Reserve committee's decision to hold rates at 5.25-5.5% had been no surprise, but it emphasised that rates would not be cut until it had more confidence that inflation was truly beaten.In a media conference, Fed Chair Jerome Powell flatly stated a cut as early as March seemed unlikely, but also conceded that everyone on the committee was looking to ease this year. Following Powell's comments, markets actually doubled down on a May Fed move, pricing in 32 basis points of cuts implying a 100% probability of 25 basis points and some chance of a 50 basis-point easing. As a result, Fed fund futures for December have priced in a further 11 basis points of easing this year taking the total expected to 141 basis points. Strong resistance can be seen at 147.18(38.2%fib),an upside break can trigger rise towards 148.66(23.6%fib).On the downside, immediate support is seen 146.01 (38.2%fib)a break below could take the pair towards 144.98(50%fib).
Equities Recap
European shares edged down on Thursday as losses in lenders eclipsed the gains in tech sector, while sentiment was dampened by the U.S. Federal Reserve's signals that an early interest rate cut was unlikely.
At (GMT 13:27 ) UK's benchmark FTSE 100 was down by 0.30 percent, Germany's Dax was down by 0.13 percent, France’s CAC was downby 0.62 percent.
Commodities Recap
Gold prices steadied on Thursday, weighed by a stronger dollar after the Federal Reserve resisted the idea of a rate cut in March, but bullion held its ground as investors continued to cling to the hope that interest rates would be trimmed later this year.
Spot gold was flat at $2,034.50 per ounce by 1046 GMT. U.S. gold futures fell 0.6% to $2,054.30.
Oil prices edged higher on Thursday, boosted by the U.S. Federal Reserve signalling a possible start to interest rate cuts.
Brent crude futures were up 68 cents at $81.23 a barrel by 1140 GMT. U.S. West Texas Intermediate crude futures gained 65 cents to $76.50.