1 Feb: Markets consolidate after yesterdays Fed move. Now awaiting US/China talks and US Jobs data.

By | February 1, 2019

Markets have mostly spent the day consolidating the previous session’s gains following the Fed’s dovish stance at the FOMC meeting although the Euro has lost a bit of ground after some soft EU data. Elsewhere the Jpy saw a bit of safe haven demand taking the dollar a bit lower but the dollar then recovered and spent the US session pretty much tracking the US stock markets. At the end of the session, stocks finished mixed, with the DJI ending -0.25%, the S+P +0.7% and the Nasdaq +1.2%, helped along by Facebook, +12%. The metals have been steady while WTI was 0.7% lower.

In terms of the data, the German retail sales dropped the most in 11 years, down 4.3% mm in December, well below the expectation of -0.5% mm. EU GDP growth was stuck at a 4 year low in Q4, at 0.2% qq, matching expectations and unchanged from Q3, but at the lowest rate in four years since Q2 of 2014. Italy was in technical recession in H2 2018, contracting by -0.2% qq in Q4, worse than expectation of -0.1% qq. The US also had some soft data, with the weekly initial jobless claims jumped 53k to 253k in the week ending January 26, well above expectation of 210k.

Friday will be another busy session, as traders wait for news of developments in trade talks between the US and China. Donald Trump will meet with Chinese Vice-Premier Liu He in the Oval office later in the day although no deal is expected before Trump meets with Chinese President Xi Jinping in the near future.

In terms of the economic calendar, Friday begins with the release of the Australian Performance of Mfg Index and Q4 PPI (exp 0.6%qq), the Japan Nikkei Mfg PMI and Unemployment figures, and the Caixin China Flash Manufacturing PMI. The EU will also focus on the PMIs but the main event of the day will be on the USA Jobs data (exp 3.9%, +166K, AHE 0.3%m/3.2%yy, AWH 34.5) and the ISM Mfg PMI/Prices Paid. Also due from the US will be the Total Vehicle Sales, Wholesale Inventories and the Michigan Consumer Sentiment Index. Have a good weekend.

Economic data highlights will include:                                                                                                  

Fri: AIG Performance of Mfg Index, Nikkei Mfg PMI, Caixin China Flash Manufacturing PMI, RBA Commodity Index,  EU Manufacturing PMI, UK Manufacturing PMI, US ISM Mfg PMI/Prices Paid, Jobs/NFP/Average Hourly Earnings data

EURUSD: 1.1445
Res  1.1475  1.1515  1.1550
Sup  1.1405  1.1375  1.1340
USDJPY: 108.89
Res  109.10  109.40  109.75
Sup  108.45  108.15  107.75
GBPUSD: 1.3111
Res  1.3140  1.3175  1.3205
Sup  1.3080  1.3050  1.3010
USDCHF: 0.9944
Res  0.9965  0.9990  1.0010
Sup  0.9925  0.9900  0.9870
AUDUSD: 0.7272
Res  0.7275  0.7295  0.7325
Sup  0.7240  0.7215  0.7180
NZDUSD: 0.6915
Res  0.6920  0.6940  0.6960
Sup  0.6880  0.6860  0.6840
S&P.fs: 2697
Res  2710  2725  2740
Sup  2675  2660  2640
DJ30.fs: 24923
Res  24985  25070  25170
Sup  24850  24790  24715
SPI200.fs: 5810
Res  5840  5870  5900
Sup  5790  5760  5730
XAUUSD: 1320
Res  1325  1330  1335
Sup  1315  1310  1305
XAGUSD: 16.05
Res  16.10  16.15  16.20
Sup  16.00  15.95  15.90
WTI.fs: 53.84
Res  54.30  54.90  55.35
Sup  53.10  52.55  52.05