Posted at 23 January 2023 / Categories Market Roundups
Market Roundup
•Hawkish ECB boosts euro, banks
•U.S. fourth quarter GDP growth report due on Thursday
•Gold could trade around current levels in short term - analyst
•Dollar index down 0.3%
Looking Ahead - Economic data (GMT)
•13:30 Canada Dec New Housing Price Index (MoM) -0.2% forecast, -0.2% previous
•14:00 French 6-Month BTF Auction 2.526% previous
•14:00 French 3-Month BTF Auction 2.164% previous
•14:00 French 12-Month BTF Auction 2.822% previous
•15:00 US Dec Leading Index (MoM) -0.7% forecast,-1.0% previous
•15:00 EU Jan Consumer Confidence -20.0 forecast,-22.2 previous
•16:30 US 3-Month Bill Auction 4.560% previous
•16:30 US 6-Month Bill Auction 4.685% previous
Looking Ahead - Economic events and other releases (GMT)
•14:30 ECB's Panetta Speaks
Fxbeat
EUR/USD: The euro rose to nine-month high against the dollar on Monday after hawkish comments on ECB member boosted euro across the board. European Central Bank (ECB) governing council member Klaas Knot said interest rates would rise by 50 basis points in both February and March and continue climbing in the months after. Knot is considered a hawk among policymakers and the comment was taken as push back against recent reports that the ECB would scale back to quarter-point moves from March. The euro reached as far as $1.0903 , breaking the recent peak of $1.08875 and opening the way to a spike top from last April at $1.0936. Immediate resistance can be seen at 1.0927(23.6%fib), an upside break can trigger rise towards 1.0951 (Higher BB).On the downside, immediate support is seen at 1.0836(5DMA), a break below could take the pair towards 1.0769(18th Jan low).
GBP/USD: Sterling hit a seven-month high against the dollar on Monday as sterling was supported by data that showed the British economy was performing better than expected and that also drove expectations of more interest rate increases by Bank of England. The pound hit $1.24475 in early trading on Monday, its highest level since June 10, 2022. Moves were exacerbated by thin liquidity due to the Lunar New Year holidays in major financial centres such as Hong Kong and Singapore.The British currency was last trading flat on the day at $1.2470, Immediate resistance can be seen at 1.2421(23.6%fib), an upside break can trigger rise towards 1.2512(Higher BB).On the downside, immediate support is seen at 1.2302(5DMA), a break below could take the pair towards 1.2257 (Jan 18th low).
USD/CHF: The dollar dipped against the Swiss franc on Monday as greenback weakened on expectation of slower interest rate hikes by the U.S. Federal Reserve. Traders expect the U.S. central bank to slow the pace of its rate increases at the Jan. 31-Feb. 1 policy meeting to 25 basis points, even though some Fed officials have signalled that their battle against inflation is far from over. The Fed raised rates by 50 bps last month after delivering four straight 75-bp hikes. Immediate resistance can be seen at 0.9214 (5DMA), an upside break can trigger rise towards 0.9268 (38.2%fib).On the downside, immediate support is seen at 0.9145 (23.6%fib), a break below could take the pair towards 0.9100 (Psychological level).
USD/JPY: The dollar strengthened against yen on Monday after Bank of Japan's December policy meeting minutes showed, underscoring the significance of the central bank's decision to tweak its bond-market peg. At the Dec. 19-20 meeting, the BOJ kept its ultra-easy monetary policy but shocked markets with a surprise change to its yield curve control (YCC) policy that allowed long-term interest rates to rise. Before the nine-member board voted on the steps, the government representatives requested that the meeting be adjourned for about 30 minutes, the minutes showed on Monday.Strong resistance can be seen at 130.00 (Psychological level), an upside break can trigger rise towards 130.44 (38.2% fib).On the downside, immediate support is seen at 129.30 (5DMA), a break below could take the pair towards 128.12 (Lower BB).
Equities Recap
European stocks edged higher on Monday, lifted by technology and mining shares, as expectations of a mild recession in the euro zone offset hawkish remarks from European Central Bank (ECB) officials that sent the euro to a nine-month high.
At (GMT 10:13 ),UK's benchmark FTSE 100 was last trading down at 0.07 percent, Germany's Dax was up by 0.02 percent, France’s CAC was up by 0.01 percent.
Commodities Recap
Gold prices slipped on Monday as investors positioned for U.S. economic data this week that could influence the Federal Reserve’s future policy, with a softer dollar cushioning further losses in bullion.
Spot gold fell 0.2% to $1,922.58 per ounce by 0914 GMT. It climbed to its highest since April 2022 on Friday. U.S. gold futures also eased 0.2% to $1,924.10.
Oil prices drifted lower in early trade on Monday, thinned by the Lunar New Year holiday in east Asia, but held on to most of last week's gains on the prospect of an economic recovery in top oil importer China this year.
Brent crude was down 11 cents, or 0.1%, to $87.52 at 0731 GMT, while West Texas Intermediate (WTI) U.S. crude fell 8 cents, or 0.1%, to $81.56 a barrel.