- USDJPY looks poised to revisit the intervention level as US data strengthens
- Oil prices plunge as US-Iran risks ease; market remains supported amid demand outlook
- The sharp pullback in precious metal takes a breather for the time being
- The Indian Rupee surges against the Dollar as Trump announces trade deal and lower tariffs
- The Australian Dollar jumped across the board after the RBA out-hawked market expectations
- France January preliminary CPI +0.3% vs +0.6% y/y expected
- What are the main events for today?
- Reminder: US jobs report this week delayed again amid government shutdown
- FX option expiries for 3 February 10am New York cut
- RBA governor Bullock says the Australian economy is in a good position
- RBA governor Bullock says that inflation pulse is too strong
- Australian dollar gets a lift as the RBA delivers on a hawkish rate hike today
The main event of the session was the French CPI report. The data was much softer than expected as inflation continues to remain subdued in France. That might create some headache for the ECB as Germany’s inflation remains above target and contributes the most to Eurozone CPI.
Other than that, it’s been mostly just about continuations of prior moves. The Australian Dollar extended the gains earlier in the session following the hawkish RBA’s rate hike but gave them back as the US Dollar strengthened across the board. Precious metals continue to recoup losses after the historical plunge on Friday.
The mood in equity markets remains upbeat as the main US indices continue to charge higher. I’d be careful though because they’ve been diverging with credit spreads and it’s generally a bad sign for the bulls. It might be some underlying fear of a hawkish repricing as we await more top tier US data in the next days and weeks.
The bond market might be also sending some early signals as we’ve been seeing a bear flattening on the hot US data recently. A hawkish repricing should tighten financial conditions in the short-term and weigh on risk assets.
In the American session, we don’t have anything on the agenda as the partial US government shutdown delayed the US Job Openings report that was scheduled for today (the US NFP report on Friday was also delayed). We have a couple of Fed speakers on the calendar but they are unlikely to deviate from their recent comments as they await more data.
This article was written by Giuseppe Dellamotta at investinglive.com.