America’s Roundup: Dollar gains as central banks take central stage,Wall Street closes lower, Gold edges down, Oil falls 2% as rate hikes loom and Russian flows stay strong-January 31st,2023

Posted at 30 January 2023 / Categories Market Roundups

Market Roundup

•French 12-Month BTF Auction  2.578%, 2.833% previous

•French 3-Month BTF Auction 2.875%,2.285% previous

•French 6-Month BTF Auction 2.330%,2.536% previous

•US Jan Dallas Fed Mfg Business Index -8.4,  -18.8 previous

•US 3-Month Bill Auction 4.595%,4.575% previous

•US 6-Month Bill Auction 4.680%, 4.685% previous

Looking Ahead - Economic data (GMT)

•23:50 Japan Dec Retail Sales (YoY)  3.0% forecast,2.5% previous

•23:50 Japan Feb Industrial Production forecast 2m ahead (MoM)  -0.6% previous

•23:50 Japan Jan Industrial Production forecast 1m ahead (MoM)  2.8% previous

•23:50 Japan Dec Industrial Production (MoM ) -1.2%forecast,   0.2% previous

•23:50 Japan Large Retailers' Sales (MoM) -1.1% previous

•00:30 Australia Dec Private Sector Credit (MoM)  0.5% forecast,0.5% previous

•00:30 Australia Dec Housing Credit   0.4% previous

•00:30 Australia Dec Retail Sales (MoM)  -0.3%   forecast,1.4% previous

•01:30   China Jan Chinese Composite PMI  42.6 previous

•01:30   China Jan Manufacturing PMI  49.8 forecast, 47.0 previous

•05:00  Japan Jan Household Confidence  30.5 forecast,  30.3 previous

•05:00  Japan Dec Construction Orders (YoY) -9.7% previous

•05:00  Japan Dec Housing Starts (YoY) 0.5% forecast,-1.4% previous

Looking Ahead - Economic events and other releases (GMT)

•No significant events

Currency Summaries

EUR/USD: The euro initially gained against the dollar on Monday after data showed  Spanish inflation data but rally fizzled as investors awaited this week’s major events. Spain's consumer prices inched up 5.8% in January compared with the same month last year, faster than the 5.7% annual rate recorded in December and the first increase since last July. Movement was  relatively subdued ahead of policy meetings at the Fed, the European Central Bank (ECB) and the Bank of England (BoE) later this week. Immediate resistance can be seen at 1.0930(23.6%fib), an upside break can trigger rise towards 1.0990 (Higher BB).On the downside, immediate support is seen at 1.0863(5DMA), a break below could take the pair towards  1.0788(18th Jan low).

GBP/USD: Sterling edged lower against the U.S. dollar on Monday ahead of a number of central bank meetings this week including the Bank of England’s, which is expected to hike rates for the 10th consecutive time. The BoE looks on course for its first rate rise this year, with markets pricing in a half percentage point increase to 4% on Thursday. Markets are currently pricing in an 80% chance of a BoE 50 basis point hike. Sterling edged 0.14% lower against the U.S. dollar at $1.2380, trading not far from a seven-month high of $1.2381 touched last week.  Immediate resistance can be seen at 1.2421(23.6%fib), an upside break can trigger rise towards 1.2521(Higher BB).On the downside, immediate support is seen at 1.2366(9DMA), a break below could take the pair towards 1.2284 (Jan 24th low).

 USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Monday, pulling back from its strongest level in over two months, as investors turned cautious ahead of an expected interest rate hike this week by the Federal Reserve. The Fed is expected to raise its key interest rate by 25 basis points at the end of its two-day policy meeting on Wednesday, followed by Fed Chair Jerome Powell’s speech, which will be scrutinized for any signs of further increases. Canadian GDP data, due on Tuesday, is expected to show the economy expanded by 0.1% in November.The loonie was trading 0.5% lower at 1.3380 to the greenback , after earlier touching its strongest since Nov. 16 at 1.3297. Immediate resistance can be seen at 1.3400 (38.2%fib), an upside break can trigger rise towards 1.3420 (14DMA).On the downside, immediate support is seen at 1.3356(5DMA), a break below could take the pair towards 1.3312(23.6%fib).

USD/JPY: The dollar edged higher against yen on Monday  a day before the Federal Reserve was due to begin a two-day policy meeting. The U.S. central bank is widely expected to hike interest rates by an additional 25 basis points this week, and investors will be watching for any new indications on how many more rate increases are likely. Fed funds futures traders are pricing for the Fed's benchmark rate to peak at 4.94% in June, up from 4.33% now, and then for the central bank to cut it to 4.53% by December. The dollar rose 0.57% against the Japanese yen to 130.53 .  Strong resistance can be seen at 130.53(Daily high), an upside break can trigger rise towards 131.00 (38.2%fib).On the downside, immediate support is seen at 129.42 (9DMA), a break below could take the pair towards 128.41 (23.6%fib).

Equities Recap

European shares slipped on Monday as hotter-than-expected inflation data from Spain added to market jitters as investors brace for a slew of interest rate hikes from prominent central banks later in the week.

UK's benchmark FTSE 100 closed up  by  0.25  percent, Germany's Dax ended down by 0.16  percent, France’s CAC finished the day down  by 0.21 percent.                

Major U.S. stock indexes sank on Monday, weighed down by declines in technology and other megacap shares, as investors looked toward a major week of events including central bank meetings and a slew of earnings reports.

Dow Jones closed down  by  0.77% percent, S&P 500 closed down by 1.30 % percent, Nasdaq settled down  by 1.96%  percent.

Treasuries Recap

U.S. Treasury yields edged higher on Monday at the start of a busy week of economic data and a widely anticipated interest rate hike by the Federal Reserve.

The yield on the 30-year Treasury bond   was up 1.4 basis points at 3.648%.The two-year   U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 4.6 basis points at 4.253%.

Commodities Recap

Gold prices edged down slightly in choppy trade on Monday as investors looked ahead to the U.S. Federal Reserve policy meeting this week amid expectations of a slowdown in rate hikes.

Spot gold inched 0.2% lower to $1,924.05 per ounce by 1:40 p.m. ET (1840 GMT). U.S. gold futures settled down 0.3% to $1,922.9.

Oil prices dipped 2% on Monday, extending losses as looming increases to interest rates by major central banks weighed on demand and Russian exports remained strong.

Brent futures for March delivery fell $1.76, or 2.03%, to $84.90 a barrel. U.S. crude fell $1.78 to $77.90 per barrel, a decline of 2.23% - its steepest decline in nearly four weeks.

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