In view of analysts at Rabobank, US Treasuries are likely to continue to set the tone for the markets this week.

Key Quotes

“Asian stocks ended Monday’s session in the red (the Nikkei fell 2.55%) as the yield on the US 10Y increased to an intraday high of 2.8831%. Looking from the perspective of technical analysis, the resistance area of 3.05%-3.10% is crucial to watch. A break higher would confirm that the multi-decade downside trend is being reversed.”

“In terms of major events, various central banks will hold interest rate meetings in the coming days, including the Bank of England on Thursday. With the main rate set to remain unchanged at 0.50%, the market will be looking for fresh clues about the timing of the next move.”

“In her preview Rabobank’s Jane Foley wrote that the uncertainties linked with Brexit present a unique backdrop that complicates the outlook for monetary policy in the UK. We see a strong chance of one rate hike at the end of this year. However, we are watchful for signs that the Bank could be minded to squeeze in two moves during the course of 2018, potentially to coincide with the May and November Inflation Reports. We expect a mildly hawkish tone from the February 8 policy meeting.”

“In terms of the latest developments regarding Brexit negotiations, it is being widely reported in the UK press this morning that Downing St has ruled the UK out from remaining within the EU’s customs’ unions after Brexit.  The statement will have been aimed at putting a lid on the rifts between ‘remainers’ and ‘Brexiteers’ within PM May’s government that blew open last week.  In some quarters May is being blamed for failing to show strong leadership and doing little to prevent various ministers laying out their own visions for Brexit.  Once again talk of a leadership challenge rose to the fore over the weekend, though in truth the Conservative Party is so deeply divided over the issue of Brexit that a new leader would unlikely resolve the split. The EU’s Chief Brexit negotiator Barnier is due to visit Downing St this week in preparation for talks on the transitional arrangement after the UK leaves the EU next March.  Downing St sources have been reported as claiming that a customs union was entirely different from a customs arrangement which would allow the UK the freedom to strike deals with non-EU countries.”

“Staying in Europe, today ECB President Mario Draghi will deliver his annual report to the European Parliament. Various Eurozone countries will publish PMIs this morning, which should confirm that the pace of expansion in services is robust across the region.”

“Moving to Asia, China will release the latest set of data later this week including trade, consumer and producer prices, foreign exchange and credit.”

“It will be a relatively quiet week in the US. Trade data on Tuesday is probably the most important to watch given that narrowing the deficit is one of the main objectives for President Trump. The consensus is for a USD 52bn shortfall in December up from USD 50.5bn. Fed Bullard, Kaplan, Dudley and Harker are scheduled to speak this week.”

 

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD holds steady near 1.0650 amid risk reset

EUR/USD holds steady near 1.0650 amid risk reset

EUR/USD is holding onto its recovery mode near 1.0650 in European trading on Friday. A recovery in risk sentiment is helping the pair, as the safe-haven US Dollar pares gains. Earlier today, reports of an Israeli strike inside Iran spooked markets. 

EUR/USD News

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD is rebounding toward 1.2450 in early Europe on Friday, having tested 1.2400 after the UK Retail Sales volumes stagnated again in March, The pair recovers in tandem with risk sentiment, as traders take account of the likely Israel's missile strikes on Iran. 

GBP/USD News

Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?

Gold: Middle East war fears spark fresh XAU/USD rally, will it sustain?

Gold price is trading close to $2,400 early Friday, reversing from a fresh five-day high reached at $2,418 earlier in the Asian session. Despite the pullback, Gold price remains on track to book the fifth weekly gain in a row.

Gold News

Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’

Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’

Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.   

Read more

Geopolitics once again take centre stage, as UK Retail Sales wither

Geopolitics once again take centre stage, as UK Retail Sales wither

Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.

Read more

Forex MAJORS

Cryptocurrencies

Signatures