Macro Events & News

Andria Pichidi HFM

FX News Today

European Fixed Income Outlook: Stock markets moved higher in Asia overnight after shrugging off early losses, U.S. futures are also moving higher, but European markets are likely to continue to struggle with the weak USD. The EUR in particular has been pushed higher as markets run away with rate hike fears after last week’s ECB minutes, ignoring the hint that any change in the forward guidance will focus on net asset purchases, rather than the sequencing of exit steps, i.e. interest rates, which are still not expected to end until well after net asset purchases have been halted. Yields moved higher in Europe yesterday and stock markets struggled. Today’s focus will be on final inflation readings out of the Eurozone, but primarily key U.K. inflation data and a dip in the headline CPI rate is expected to 3.0% from 3.1% y/y in the previous month.

FX Update: USDJPY has lifted to the upper 110.0s after opening in Tokyo just under 110.50. There were some remarks of disquiet about yen strength from both finance minister, Aso, and the economy minister, Motegi, which followed a six consecutive session run lower in USDJPY that yesterday left a four-month low at 110.33. Japanese December PPI also came in a smidgeon shy of expectations, at 3.1% y/y, while another USDJPY supporting influence is a large USDJPY option structure with a 111.20 strike which is due to expire at the New York cut today. USDJPY posted an intra-day peak at 110.98. Resistance at 111.05-7, and support is at 110.29-30.

Charts of the Day

Main Macro Events Today

UK PPI- December PPI is penciled in at a 0.5% y/y, slower than the 1.8% previously.

UK CPI- A moderation is expected to 3.0% y/y after November’s 3.1% y/y clip, an outcome which would square with BoE projections.

US Empire State Manufacturing Index – The January Empire State manufacturing index should rise 1 point to 19 after falling 1.4 points to 18.0 in December

SNB Chairman Jordan Speech

Support and Resistance Levels

Author

Andria Pichidi

HFM

Having completed her five-year-long studies in the UK, Andria Pichidi has been awarded a BSc in Mathematics and Physics from the University of Bath and a MSc degree in Mathematics, while she holds a postgraduate diploma (PGdip) in

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.