Monday 5th February: European Open Briefing

Global Markets:

• Asian stock markets: Nikkei down 2.53%, Shanghai Composite up 0.40%, Hang Seng down 1.19%, ASX down 1.56%
• Commodities: Gold at $1334.40 (-0.22%), Silver at $16.66 (-0.29%), WTI Oil at $64.89 (-0.86%), Brent Oil at $67.94 (-0.94%)
• Rates: US 10-year yield at 2.866, UK 10-year yield at 1.563, German 10-year yield at 0.763

News & Data:  

• (CNY) Caixin Services PMI 54.7 vs 53.6 expected
• (USD) Revised UoM Consumer Sentiment 95.7 vs 95 expected
• (USD) Unemployment Rate 4.10% vs 4.10% expected
• (USD) Non-Farm Employment Change 200K vs 181K expected
• (USD) Average Hourly Earnings m/m 0.30% vs 0.20% expected
• (GBP) Construction PMI 50.2 vs 52 expected
• (EUR) Spanish Unemployment Change 63.7K vs 50.3K expected
• Global Equity Slump Deepens as Rate Fears Grow
• A decade after recession, a jump in U.S. states with wage gains- RTRS

CFTC Positioning Data (Week Ending January 30, 2018)

• EUR long 149K vs 145K long last week.
• GBP long 32K vs 33K long last week.
• JPY short 114K vs 123K short last week.
• CHF short 20K vs 22K short last week.
• CAD long 33K vs 23K long last week
• AUD long 13k vs 17K long last week. 
• NZD long 3K vs 1K short last week.

Markets Update:

Asian markets witnessed steep declines today. Bond yields at an all-time high, and the rout in US markets on Friday reflected in the Asian markets today, which have now wiped off most of their 2018 gains. Strong NFP data, along with rising wage growth has fuelled higher inflation expectations, leading to speculation that the Fed will tighten at a pace (with a rate hike coming in as early as March) faster than assumed earlier.

While the Nikkei fell, the yen strengthened. US futures were also trading lower during the US session, suggesting that the decline will continue when US markets open today. Chinese markets have fared better than peers in the region, although they have been under the selling pressure too. On the other hand, services activity from China, Japan and Australia have shown improvements month on month.

The US Dollar has weakened against most major currencies, but at the same time, oil and gold prices have also fallen. In her outgoing remarks, Janet Yellen stopped shy of calling equities and real estate a bubble, but emphasized the position of precious metals in their portfolio.

Bitcoin is trading above 8000, following sell-offs last week. It is to be seen if current levels can be sustained.

Upcoming Events:               

Monday, 5^th February

• 09:30 AM GMT – (GBP) Services PMI
• 03:00 PM GMT – (USD) ISM Non-Manufacturing PMI
• 04:00 PM GMT – (EUR) ECB President Draghi Speaks

Tuesday, 6^th February

• 12:30 AM GMT – (AUD) Retail Sales m/m
• 12:30 AM GMT – (AUD) Trade Balance
• 03:30 AM GMT – (AUD) Cash Rate
• 03:30 AM GMT – (AUD) RBA Rate Statement
• 09:00 AM GMT – (EUR) German Buba President Weidmann Speaks
• 01:30 PM GMT – (CAD) Trade Balance
• Tentative – (NZD) GDT Price Index
• 03:00 PM GMT – (CAD) Ivey PMI
• 09:45 PM GMT – (NZD) Employment Change q/q
• 09:45 PM GMT – (NZD) Unemployment Rate

Wednesday, 7^th February

• 08:30 AM GMT – (GBP) Halifax HPI m/m
• 01:30 PM GMT – (CAD) Building Permits m/m
• 01:30 PM GMT – (USD) FOMC Member Dudley Speaks
• 03:30 PM GMT – (USD) Crude Oil Inventories
• 08:00 PM GMT – (NZD) Official Cash Rate
• 08:00 PM GMT – (NZD) RBNZ Monetary Policy Statement
• 08:00 PM GMT – (NZD) RBNZ Rate Statement
• 09:00 PM GMT – (NZD) RBNZ Press Conference
• 10:20 PM GMT – (USD) FOMC Member Williams Speaks

Thursday, 8^th February

• 12:00 AM GMT – (NZD) RBNZ Gov Spencer Speaks
• 12:30 AM GMT – (AUD) NAB Quarterly Business Confidence
• 08:45 AM GMT – (EUR) German Buba President Weidmann Speaks
• 09:00 AM GMT – (AUD) RBA Gov Lowe Speaks
• 12:00 PM GMT – (GBP) BOE Inflation Report
• 12:00 PM GMT – (GBP) MPC Official Bank Rate Votes
• 12:00 PM GMT – (GBP) Monetary Policy Summary
• 12:00 PM GMT – (GBP) Official Bank Rate
• 12:00 PM GMT – (GBP) Asset Purchase Facility
• 12:00 PM GMT – (GBP) BOE Inflation Letter
• 12:00 PM GMT – (GBP) MPC Asset Purchase Facility Votes
• 01:30 PM GMT – (CAD) NHPI m/m
• 01:30 PM GMT – (USD) Unemployment Claims
• 05:45 PM GMT – (CAD) Gov Council Member Wilkins Speaks

Friday, 9^th February

• 12:30 AM GMT – (AUD) RBA Monetary Policy Statement
• 01:30 AM GMT – (CNY) CPI y/y
• 01:30 AM GMT – (CNY) PPI y/y
• 09:30 AM GMT – (GBP) Manufacturing Production m/m
• 09:30 AM GMT – (GBP) Goods Trade Balance
• 01:30 PM GMT – (CAD) Employment Change
• 01:30 PM GMT – (CAD) Unemployment Rate
• 04:45 PM GMT – (GBP) MPC Member Cunliffe Speaks
• &more…