News

Europe Roundup: Euro dips as dollar gains on Fed rate hike bets, European shares falls, Gold falls, Oil prices hit 7-year highs as tight supply bites-January 18th,2022

Posted at 18 January 2022 / Categories Market Roundups


Market Roundup

•UK Dec Claimant Count Change  -43.3K,-38.6K forecast,-49.8K previous

•UK Nov Average Earnings ex Bonus  3.8%,3.8% forecast,4.3% previous

•UK Nov Average Earnings Index +Bonus  4.2%,4.2% forecast, 4.9% previous

•UK Nov Employment Change 3M/3M (MoM)  60K, 125K forecast,149K previous

•UK Dec Car Registration (YoY)                  -18.2%,1.7% previous

•Switzerland Dec PPI (MoM) -0.1%,0.4% forecast,0.5% previous

•Switzerland Dec PPI (YoY)  5.1% forecast,5.8% previous

•German Jan ZEW Economic Sentiment  51.7, 32.0 forecast, 29.9previous

•German Jan ZEW Current Conditions  -10.2,-8.5 forecast, -7.4 previous

• EU Jan ZEW Economic Sentiment  49.4, 29.2 forecast, 26.8 previous

Looking Ahead - Economic Data (GMT)

•13:15 Canada Dec Housing Starts   270.0K forecast, 301.3K previous

•13:30 US Jan  NY Empire State Manufacturing Index  25.70 forecast, 31.90 previous

•15:00 US NAHB Jan Housing Market Index  84 forecast, 84 previous

•15:00 GlobalDairyTrade Price Index 0.3% previous

•16:30 US 3-Month Bill Auction 0.120% previous

 •16:30 US 6-Month Bill Auction 0.275% previous

•21:00 US Nov  Overall Net Capital Flow  143.00B previous

•21:00 US Nov  TIC Net Long-Term Transactions  7.1B previous

Looking Ahead - Economic events and other releases (GMT)

•No Significant events

Fxbeat

EUR/USD: The euro dipped on Tuesday as investors prepared for possible faster U.S interest rate hikes after Treasury yields hit pre-pandemic highs. The turn in sentiment came after two-year U.S. Treasury yields, a bellwether for rate expectations, rose above 1% for the first time since February 2020. The yields stood at 1.0364% in the Asia afternoon. The U.S. Federal Reserve is not expected to change rates at its Jan. 25-26 meeting but a growing number of investors think March will be the start of a tightening cycle.The dollar index, which tracks the greenback against a basket of currencies of major trading partners, was up at 95.33. Immediate resistance can be seen at 1.1414 (38.2% fib), an upside break can trigger rise towards 1.1452 (23.6%fib).On the downside, immediate support is seen at 1.1383 (50% fib), a break below could take the pair towards 1.1352(61.8%fib).

GBP/USD: The British pound's declined on Tuesday as dollar rose as investors prepared for possible faster U.S interest rate hikes after Treasury yields hit pre-pandemic highs. Investors braced for a more hawkish Federal Reserve, which is meeting on Jan. 25 and 26 with bets growing that the central bank would start tightening in March. U.S. markets reopen on Tuesday after a long weekend. Treasuries jumped along the curve with two-year yields , which track short-term rate expectations, crossing 1% for the first time since February 2020. Immediate resistance can be seen at 1.3674 (38.2% fib), an upside break can trigger rise towards 1.3740 (23.6%fib).On the downside, immediate support is seen at 1.3619(50%fib), a break below could take the pair towards 1.3556(61.8%fib).

USD/CHF: The dollar strengthened against the Swiss franc on Tuesday as the U.S. dollar was supported by rising Treasury yields. The dollar was up 0.1% against a basket of currencies as U.S. two-year yields, which track short-term interest rate expectations, crossed 1% for the first time since February 2020, last up 8 basis points. Investor focus will turn to December consumer inflation and November retail sales data. At (GMT 10:55), greenback dipped 0.42% versus the Swiss franc to 0.9152. Immediate resistance can be seen at 0.9166(38.2% fib), an upside break can trigger rise towards 0.9219 (23.6%fib).On the downside, immediate support is seen at 0.9140(5DMA), a break below could take the pair towards 0.9091(Lower BB).

USD/JPY: The dollar initially gained against the Japanese yen on Tuesday but gave up most of the ground   after the Bank of Japan said it would stick to its ultra-loose monetary policy. Bank of Japan said it would maintain its ultra-loose monetary policy even as its global counterparts move towards exiting from crisis-mode policies. As widely expected, the BOJ left unchanged a -0.1% target for short-term interest rates and a pledge to guide long-term rates around 0% at a two-day meeting that ended on Tuesday. At 0838 GMT, the dollar was up 0.1% against the yen at 114.72 , with the pair having reached as high as 115.06 overnight. Strong resistance can be seen at 115.40 (23.6%fib), an upside break can trigger rise towards 114.71 (38.2%fib).On the downside, immediate support is seen at 114.44 (5DMA), a break below could take the pair towards 114.29(50%fib).

Equities Recap

European shares fell on Tuesday, with tech stocks coming under pressure as a rise in two-year U.S. Treasury yields reflected ramped-up bets for a U.S. policy rate hike as soon as March.

At (GMT 10:50),UK's benchmark FTSE 100 was last trading down at 0.71 percent, Germany's Dax was down by 1.14 percent, France’s CAC finished was down by 1.06 percent.

Commodities Recap

Gold prices slipped on Tuesday, weighed down a spike in U.S. Treasury yields and a stronger dollar as investors awaited for more clues about the Federal Reserve's interest rate hike timeline from its policy meeting next week.

Spot gold fell 0.5% to $1,809.66 per ounce by 1009 GMT. U.S. gold futures fell 0.4% to $1,809.40.

Benchmark oil prices climbed to their highest level since 2014 on Tuesday as possible supply disruption after attacks in the Mideast Gulf added to an already tight supply outlook.

Brent crude futures rose $1.02, or 1.2%, to $87.50 a barrel by 0924 GMT, while U.S. West Texas Intermediate (WTI) crude futures jumped $1.36, or 1.6%, to $85.18 a barrel.


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