Friday 5th February: European Open Briefing

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Friday 5th February: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei down 2.15 %, Shanghai Composite lost 0.10 %, Hang Seng gained 0.50 %, ASX 200 fell 0.20 %
  • Commodities: Gold at $1156 (-0.15 %), Silver at $14.87 (+0.10 %), WTI Oil at $31.70 (-0.05 %), Brent Oil at $34.34 (-0.35 %)
  • Rates: US 10 year yield at 1.84, UK 10 year yield at 1.57, German 10 year yield at 0.31

News & Data:

  • Australia Retail Sales (MoM) Dec: 0.0% (exp 0.4% prev 0.4%)
  • Australia Retail Sales Ex-Inflation (QoQ) Dec: 0.6% (exp 0.9% prev 0.6%)
  • Australia PCI (Jan): 46.3 (prev 46.8)
  • RBA SoMP: Growth & Inflation Forecasts Unchanged
  • RBA SoMP: Non-Mining Business Investment Outlook Subdued Near Term
  • RBA SoMP: Revises Down Forecast Terms Of Trade A Little Further
  • RBA SoMP: China Outlook A Key Source Of Uncertainty For Forecasts
  • Fed’s Mester: See A Little More In Terms Of Downside Risks To US Economy
  • Mester: Inflation Expectations Still Stable Despite Lower Oil
  • PBoC Fixes Yuan Reference Rate At 6.5314 (prev 6.5419)

Markets Update:

In the Asian session, the USD weakened further, while the Canadian Dollar was the best performing currency. USD/CAD fell from 1.3760 to 1.3722 in Asia and a retest of 1.3640 seems likely in the short-term. USD/JPY also extended losses overnight as it declined from 117.00 at the Tokyo open to a low of 116.55 later in the session. There is no notable support until 116.00 and a break below would then pave the way for a 115 test.

EUR/USD was caught in a tight range and traded 1.1190-1.1215 in Asia, while GBP/USD was consolidating between 1.4560 and 1.4590. Volatility is likely to remain low in the European session, as traders are waiting for US employment data at 13:30 GMT. The market is expecting a 190k print for NFP, while the unemployment rate is expected to remain unchanged at 5.0 %.

Upcoming Events:

  • 07:45 GMT – French Trade Balance
  • 13:30 GMT – US Nonfarm Payrolls
  • 13:30 GMT – US Average Hourly Earnings
  • 13:30 GMT – US Unemployment Rate
  • 13:30 GMT – Canadian Trade Balance
  • 15:00 GMT – Canadian Ivey PMI

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