Posted at 17 January 2023 / Categories Market Roundups
•Canada Dec Housing Starts 248.6K,257.5K forecast, 264.2K previous
•US Jan NY Jan Empire State Manufacturing Index-32.90, -8.70 forecast, -11.20 previous
•Canada Common CPI (YoY) 6.6%,6.6% forecast, 6.7% previous
•Canada Trimmed CPI (YoY) 5.3%, 5.3% previous
•Canada Median CPI (YoY) 5.0% ,5.0% previous
•Canada Nov Foreign Securities Purchases by Canadians 14.13B ,-1.67B previous
•Canada Dec Core CPI (YoY) 5.4%,5.8% previous
•Canada CPI (MoM) -0.6%,-0.5% forecast, 0.1% previous
•Canada Nov Foreign Securities Purchases 12.76B,8.46B previous
•New Zealand Global Dairy Trade Price Index-0.1%,-2.8% previous
•US 3-Month Bill Auction 4.560%, 4.560% previous
•US 6-Month Bill Auction 4.685%, 4.710% previous
Looking Ahead Economic Data(GMT)
•23:50 Japan Nov Core Machinery Orders (YoY) 2.4% forecast,0.4% previous
•23:50 Japan Nov Core Machinery Orders (MoM) -0.9% forecast, 5.4% previous
•03:00 Japan BoJ Interest Rate Decision -0.10% forecast, -0.10% previous
Looking Ahead - Economic events and other releases (GMT)
•03:00 Japan BoJ Outlook Report (YoY)
•03:00 Japan BoJ Monetary Policy Statement
EUR/USD: The euro strengthened against dollar on Tuesday as single currency attracted sellers after a report said the European Central Bank's policymakers were considering a slower pace of interest rate hikes. 50 basis-point step in February ECB President Christine Lagarde signalled remains likely, the prospect of a smaller 25-point increase at the following meeting in March is gaining support, Bloomberg News reported.On the data front, German investor sentiment came in positive territory in January for the first time since the Ukraine war began as signs point to a milder recession over the winter months than initially feared, the ZEW economic research institute said on Tuesday.The institute's economic sentiment index rose to 16.9 from minus 23.3 in December, beating expectations by analysts polled of a reading of minus 15.0. On the U.S. economic calendar, producer price index (PPI) data, retail sales, and manufacturing output readings are expected tomorrow. Immediate resistance can be seen at 1.0896(23.6%fib), an upside break can trigger rise towards 1.0950 (Higher BB).On the downside, immediate support is seen at 1.0778(5DMA), a break below could take the pair towards 1.0693(38.2%fib).
GBP/USD: The British pound edged higher on Tuesday after data showed a tight labour market and accelerating pay growth, adding to the Bank of England’s inflation worries as it tries to bring prices down from multi-decade highs. The BoE is expected to raise rates for the tenth consecutive meeting when it meets on Feb. 2 as it attempts to further bring down inflation from the more-than-four-decade high of 11.1% reached in October last year.Money markets are fully pricing in a 25 basis points (bps)rate hike at that meeting, with a roughly 75% chance of a larger 50 bps increase .By 1025 GMT, the pound was up 0.1% against the dollar to $1.2211. Immediate resistance can be seen at 1.2286(Daily high), an upside break can trigger rise towards 1.2356(Higher BB).On the downside, immediate support is seen at 1.2196 (9DMA), a break below could take the pair towards 1.2066(38.2%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Tuesday as investors raised bets on a Bank of Canada interest rate hike this month following domestic data showing persistence in underlying inflation pressures.Canada’s annual inflation rate eased more than expected to 6.3% in December as gas prices came down, but core measures remained little changed from the previous month. Adding to support for the loonie, U.S. crude futures settled 0.4% higher at $80.18 a barrel on hopes that a recent shift in China’s COVID-19 policy will boost fuel demand. The Canadian dollar was trading 0.2% higher at 1.3375 to the greenback , after moving in a range of 1.3370 to 1.3437.Immediate resistance can be seen at 1.3419(10DMA), an upside break can trigger rise towards 1.3425 (38.2% fib).On the downside, immediate support is seen at 1.3369(23.6%fib), a break below could take the pair towards 1.3323 (Lower BB).
USD/JPY: The dollar edged higher Tuesday as Japanese yen fell investors awaited the result of the BOJ meeting. Investors held their breath for a potential policy shift at the Bank of Japan (BOJ).The yen steadied dipped to trade around 128.14 on Tuesday after hitting a top of 127.22 per dollar on Monday, with traders braced for sharp moves when the Bank of Japan (BOJ) concludes a two-day meeting on Wednesday. On the U.S. economic calendar, producer price index (PPI) data, retail sales, and manufacturing output readings are expected tomorrow. Strong resistance can be seen at 130.25 (5DMA), an upside break can trigger rise towards 130.50 (38.2% fib).On the downside, immediate support is seen at 127.50 (23.6% fib), a break below could take the pair towards 127.11 (Lower BB).
Despite spending much of the day's session in negative territory, European stocks closed slightly higher on Tuesday thanks to brisk buying at several counters in the final hour.
UK's benchmark FTSE 100 closed down by 0.12 percent, Germany's Dax ended up by 0.35 percent, France’s CAC finished the day up by 0. 48 percent.
The Dow fell on Tuesday as Goldman Sachs weighed the most on the index after missing quarterly profit estimates, while gains in Tesla limited losses on the benchmark S&P 500 and kept the Nasdaq afloat.
Dow Jones closed up by 1.14 percent, S&P 500 ended down by 0.20 percent, Nasdaq finished the day up by 0.14 percent.
Longer-dated U.S. Treasury yields rose on Tuesday in choppy trading as investors awaited the outcome of the Bank of Japan’s two-day meeting on Wednesday and as companies issued corporate debt.
Benchmark 10-year note yields rose two basis points to 3.53% while two-year Treasury yields dipped five basis points to 4.19%.
The yield curve between two-year and 10-year notes steepened, but remained deeply inverted at minus 66 basis points.
Gold prices on Tuesday fell from a more than eight-month peak hit in the previous session on hopes that the U.S. Federal Reserve would adopt a less aggressive approach to rate hikes going forward.
Spot gold fell 0.7% to $1,904.87 per ounce by 1:42 p.m. ET (1842 GMT), after hitting its highest since the end of April on Monday. U.S. gold futures settled down 0.6% at $1,909.9.
Oil prices settled higher on Tuesday in choppy trading after China posted weak but expectation-beating annual economic growth data and on hopes that a recent shift in its COVID-19 policy will boost fuel demand.
Brent crude futures settled up $1.46, or 1.7%, to $85.92 while U.S. West Texas Intermediate (WTI) crude settled up 32 cents, or 0.4%, at $80.18.
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