America’s Roundup: Dollar firms as further monetary tightening seen ,Wall Street ends down, Gold edges higher, Oil rises 1% in choppy trade on China demand hopes-February 7th,2023

Posted at 06 February 2023 / Categories Market Roundups

Market Roundup

•French 12-Month BTF Auction  2.772%, 2.875% previous

•French 3-Month BTF Auction 2.492%, 2.330% previous

•French 6-Month BTF Auction 2.573%,2.578% previous

•Canada Jan Ivey PMI60.1, 42.3 forecast,33.4 previous

•Canada Jan Ivey PMI n.s.a 54.7, 40.6 previous

•US Jan CB Employment Trends Index 118.74, 116.31 previous

•US3-Month Bill Auction 4.590%, 4.595% previous

•US 6-Month Bill Auction 4.755%, 4.680% previous

Looking Ahead - Economic data (GMT)

•00:30   Australia Dec Exports (MoM)  -1.0% previous

•00:30   Australia Dec Imports (MoM)  -1.0% previous

•00:30   Australia Dec Trade Balance   12.500B forecast,   13.201B previous

•03:30   Australia Feb RBA Interest Rate Decision  3.35% forecast,3.10% previous

•05:00   Japan Dec Leading Index (MoM)  -1.2% previous

•05:00   Japan Leading Index 97.0 forecast,97.4 previous

•05:00   Japan Dec Coincident Indicator (MoM)  -0.3% previous

Looking Ahead - Economic events and other releases (GMT)

•03:30   Australia RBA Rate Statement   

Currency Summaries

EUR/USD: The euro declined against the dollar on Monday as fears that the global rate-hiking cycle may persist for longer kept investors on edge. Markets will focus on comments from ECB’s Isabel Schnabel and Federal Reserve Chair Jerome Powell, due on Tuesday.Analysts reckoned Powell could answer the question of whether a strong U.S. labour market might derail expectations that the Fed’s tightening cycle is nearing its end.ECB’s Schnabel might clarify how much the ECB monetary policy could diverge from the Fed. The euro slipped 0.6% against the dollar to $1.0724, its lowest since Jan. 9, following a 1% drop on Friday. Immediate resistance can be seen at 1.0876(38.2%fib), an upside break can trigger rise towards 1.0968 (Higher BB).On the downside, immediate support is seen at 1.0720(50%fib), a break below could take the pair towards  1.0685(50DMA).

GBP/USD: Sterling hit a one-month low against the dollar on Monday, at the start of a week where traders are focussing on British growth data and remarks from Bank of England policy makers about the pace of interest rate hikes.The pound weakened 0.2% to trade at $1.2018, extending declines after losing 2.8% against the greenback last week  its worst such decline in more than four months - when blowout U.S. jobs data sent the greenback higher against almost all currencies.  Immediate resistance can be seen at 1.2913(23.6%fib), an upside break can trigger rise towards 1.22266(Feb 3rd high).On the downside, immediate support is seen at 1.2001(38.2%fib), a break below could take the pair towards 1.1956 (Lower BB).

 USD/CAD: The Canadian dollar weakened to its lowest level in over two weeks against its U.S. counterpart on Monday as investors worried the Federal Reserve will turn more hawkish and despite data upbeat domestic economic data. Canadian economic activity expanded in January at the sharpest pace in eight months as employment climbed and supplier deliveries speeded up, Ivey Purchasing Managers Index (PMI) data showed.The price of oil, one of Canada’s major exports, settled nearly 1% higher at $74.11 a barrel on optimism of increased demand from China.The loonie was trading 0.4% lower at 1.3445 to the greenback, after touching its weakest since Jan. 20 at 1.3475. Immediate resistance can be seen at 1.3479 (23.6%fib), an upside break can trigger rise towards 1.3494 (50DMA).On the downside, immediate support is seen at 1.3400 (38.2%fib), a break below could take the pair towards 1.3331 (50%fib).

USD/JPY: The dollar strengthened  against yen on Monday  after data showing a resilient U.S. jobs market suggested interest rates will stay higher for longer as central banks fight to slow inflation amid relatively strong economic growth. Data on Friday showed U.S. job growth accelerated sharply last month, with nonfarm payrolls surging by 517,000 jobs - well above an estimate of 185,000. The unemployment rate hit more than a 53-1/2-year low of 3.4%. The dollar was last up 0.9% on the day at 132.60 yen.  Strong resistance can be seen at 132.63(50DMA), an upside break can trigger rise towards 134.448 (38.2%fib).On the downside, immediate support is seen at 131.31(23.6%fib), a break below could take the pair towards 131.00 (Psychological level).

Equities Recap

European stocks closed notably lower on Monday as last week's data showing stronger than expected jobs growth in the U.S. raised concerns the Federal Reserve will continue to hold rates at higher levels for longer than earlier thought.

UK's benchmark FTSE 100 closed down by  0.82 percent, Germany's Dax ended down by 0.84 percent, France’s CAC finished the day up by 1.34 percent.                      

U.S. stocks ended lower on Monday as investors shifted gears after considering the possibility that the U.S. Federal Reserve may take longer to start cutting interest rates.

Dow Jones closed down  by  0.10% percent, S&P 500 closed down by 0.61% percent, Nasdaq settled down  by 1.00%      percent.

Treasuries Recap

Benchmark 10-year U.S. Treasury yields hit four-week highs on Monday after Friday’s blowout employment number raised expectations that the Federal Reserve’s rate hikes will not end with a hard economic landing, and that the U.S. central bank may have more than one more rate increase left.

Benchmark 10-year yields   rose as high as 3.640%, the highest since Jan. 6, and are up from a low of 3.333% on Thursday before the data. Two-year yields   reached 4.435%, also the highest since Jan. 6.

Commodities Recap

Gold edged higher on Monday, with investors banking on the precious metal’s safe-haven appeal as concerns about an economic slowdown linger, after a stronger dollar and higher Treasury yields nudged prices to a one-month low.

Spot gold was up 0.2% to $1,868.96 per ounce by 2:37 p.m. ET (1937 GMT). Earlier in the session, prices slipped to $1,860, their lowest since Jan. 6.U.S. gold futures settled 0.2% higher at $1,879.50.

Oil prices edged higher in choppy trading on Monday as markets weighed a return in demand from China against supply concerns and fears of slower growth in major economies curbing consumption.

Brent futures for April delivery rose $1.05, or 1.3%, to $80.99 a barrel, after trading between $79.10 and $81.25.

West Texas Intermediate crude (WTI) gained 72 cents, or 1%, to $74.11 per barrel, after hitting a high of $74.41 and a low of $72.25.

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