Macro Events & News

Andria Pichidi HFM

FX News Today

European Fixed Income Outlook: Asian stock markets traded mixed overnight, with Nikkei and ASX 200 closing in the red, while Chinese shares rallied ahead of key data releases including GDP numbers. FTSE 100 and U.S. stock futures are narrowly mixed, while 10-year JGB and Treasury yields slightly lower on the day, South Korea bonds rallied after the BoK held rates steady and warned of overheating in cryptocurrency markets. EGB yields moved marginally higher on Thursday, with Bunds outperforming after ECB officials tried to calm tightening concerns and keep a lid on the euro. Still, that the ECB is on the way to phase out net asset purchases this year is pretty clear, with the only question whether there will be an abrupt end in October, as the hawks are suggesting, or a gradual taper in Q4. Released overnight, U.K. RICS house price data came in stronger than expected. There are no other key data releases scheduled leaving the focus on the Bundesbank/IMF conference with speakers including Weidmann and Coeure, as well as French and Spanish bond auctions.

FX Update: The dollar edged out fresh recovery highs versus the euro and other currencies. EURUSD logged a four-session low of 1.2165 before recouping to around 1.2200. The move reflected a dollar dynamic, with EURJPY and other euro crosses having held relatively steady today, even though the airing of concerns about the common currency’s ascent by some ECB officials, along with concerns on the German political front, helped catalysed the correction from 37-month highs in EURUSD. USDJPY lifted to a four-session high of 111.48 in Tokyo today, extending the recovery from Wednesday’s four-month low at 110.19. The recovery broke a run of seven consecutive down . Good selling interest into 111.50 capped the advance, however. Equity markets also turned mixed-to-lower in Asia, despite Wall Street ascending to fresh highs, having been lifted by earnings and Apple’s announcement on a large cash repatriation. Elsewhere, USD-CAD has settled at near net unchanged levels relative to levels that were prevailing just ahead of yesterday’s BoC rate hike (which met expectations while be accompanied with cautious guidance). Sterling is the strongest currency on the day, posting a near 0.5% average gain versus the dollar, euro and yen in post-London close trading. Remarks from BoE MPC member Sauders warning that pay growth will accelerate in the UK during 2018 and that unemployment may drop to multi-decade lows under 4.0%, gave Hey Majesty’s currency a boost, reportedly encouraging interbank and near-term speculative accounts to run at sell stops in EUR-GBP.

Charts of the Day

Main Macro Events Today

US Housing Starts & Building Permits – Housing starts should fall to a 1.275 mln pace in December after November’s 3.3% surge to 1.297 mln, while Building permits expected at 1.290M from 1.298M seen on November.

US Jobless Claims – Unemployment claims is seen slightly lower at 250K than 261K last week.

US Crude Oil Inventories

Philadelphia Fed Manufacturing Survey – The Philly Fed index should fall to 25.0 in January from the upwardly revised 27.9 in December. The reading was at 24.1 a year ago, and was as high as 36.4 in 2011.

ECB Cœuré 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.