Weak data (Retail Sales & PPI) from the US added to recession worries – More Hawkish comments from a raft of FED speakers talking 5.25-5.5% terminal rates added to a safe haven bid for the USD, caused Stock markets to collapse (-1.24% to -1.81%) under key technical levels and speculators to back the YEN and push the BOJ once more. Bonds rallied, the US 10-yr yield dropped to 3.75%. Asia markets are lower and rangebeound & European FUTS are also mixed. NZD unmoved from surprise PM Ardern will step down in February ahead of October elections.
The USD Index hit a new 7-mth low at 101.25, before the data and a recovery of the 102.00 handle. EUR – holds at 1.0800 now, following a new 8-mth high over 1.0870. JPY – Rip roaring day from 131.60 highs yesterday completely reversed and back to test 128.00 now. GBP – Sterling has breached 1.2400, following the US data and currently trades at 1.2335. Stocks – The US markets were weak into close (-1.24% to +1.81%). US500 -1.56% to 3928 and below 200 EMA and testing the 50MA. PNC -6.04%, UAL -4.57%, US500 FUTS trade at 3937. USOil – rallied again to test $82.50 before the US economic data and inventories took it lower to $79.00 where it holds now. Gold – has tested $1900 again today from highs of $1922 yesterday, trades at $1912 now. BTC – Continues to hold over $20k this week but has relinquished the $21k today to trade at $20.7k.Today – Building Permits/Housing Starts, Weekly Claims, Norges Bank & CBRT Announcements, ECB Minutes, Speeches from Fed’s Williams, Brainard & Collins, ECB’s Lagarde, Schnabel & Knot, Earnings – Procter & Gamble and Netflix.
Biggest FX Mover @ (07:30 GMT) AUDJPY (+1.41%). Rejected & reversed the post BOJ rally to 92.00, tanking close to 400 pips to test 88.00 lows. MAs aligned lower, MACD histogram & signal line negative & falling. RSI 22.87, OS & falling, H1 ATR 0.239, Daily ATR 1.278.
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Stuart Cowell
Head Market Analyst
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