Posted at 31 January 2025 / Categories Market Roundups
Market Roundup
• ECB Interest Rate Decision (Jan) 2.90% ,2.90% forecast, 3.15% previous
•US Continuing Jobless Claims 1,858K ,1,890K forecast,1,900K previous
•US Core PCE Prices (Q4) 2.50, 2.50% forecast,2.20% previous
•US GDP (QoQ) (Q4) 2.3% ,2.7% forecast,3.1% previous
•US GDP Price Index (QoQ) (Q4) 2.2%, 2.5% forecast, 1.9% previous
•US GDP Sales (Q4) 3.2% ,- 3.3% previous
•US Initial Jobless Claims 207K ,224K forecast, 223K previous
•US Jobless Claims 4-Week Avg. 212.50K, - 213.50K previous
•US PCE Prices (Q4) 2.3%, - 1.5% previous
•US Real Consumer Spending (Q4) 4.2% ,- 3.7% previous
• Canada Average Weekly Earnings (YoY) (Nov) 5.03% ,- 5.24% previous
• US Pending Home Sales (MoM) (Dec) -5.5% ,0.0% forecast, 1.6% previous
• US Pending Home Sales Index (Dec) 74.2, 78.5 previous
Looking Economic Data (GMT)
•03:35 Japan 2-Year JGB Auction 0.602% previous
•05:00 Japan Construction Orders (YoY) (Dec) -10.2% previous
•05:00 Japan Housing Starts (YoY) (Dec) -3.7% forecast, -1.8%
Looking Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro slipped on Thursday after ECB cuts deposit rate cut by 25 bps to 2.75%. The European Central Bank cut interest rates on Thursday and signaled the possibility of further reductions in March, as concerns about sluggish economic growth took precedence over persistent inflation. This marks the fifth rate cut since June, with markets anticipating two to three more cuts this year. The rationale behind this is that the inflation surge is nearing its end, while the weakening economy requires support. Despite the euro zone's stagnation in the last quarter, largely due to industrial recession and weak consumption, the ECB is expected to continue its easing path, even as the U.S. Federal Reserve maintained rates and suggested a prolonged pause. Immediate resistance can be seen at 1.0405(50%fib), an upside break can trigger rise towards 1.0462(61.8%fib).On the downside, immediate support is seen at 1.0338(38.2%fib), a break below could take the pair towards 1.0276(23.6%fib).
GBP/USD: Sterling dipped against the dollar on Thursday as traders evaluated key monetary policy decisions from major central banks and the UK's economic outlook. The ECB cut rates by 25 basis points as expected and hinted at the possibility of further cuts, driven by concerns over weak economic growth outweighing inflation worries. Markets are pricing in additional ECB cuts in March, April, and June, with around 90 basis points of easing expected for 2025. Meanwhile, the Fed kept its benchmark rate unchanged at 4.25%-4.50%, removing its previous statement that inflation had "made progress" toward its 2% target. In contrast, central banks in Canada and Sweden both implemented a quarter-point rate cut Immediate resistance can be seen at 1.2516(50%fib), an upside break can trigger rise towards 1.2648(61.8%fib).On the downside, immediate support is seen at 1.2358(38.2%fib), a break below could take the pair towards 1.2163(23.6%fib)
USD/CAD: The Canadian dollar slipped sharply lower on Thursday as President Trump floated the threat of imposing tariffs on Canadian and Mexican goods, fueling concerns over trade tensions. Trump indicated Thursday that he would likely decide soon on imposing a 25% tariff on Mexican and Canadian oil imports, set to take effect February 1.Trump has repeatedly threatened Mexico and Canada, two key trading partners, with tariffs unless they halt fentanyl shipments and reduce migrant flows across U.S. borders. The loonie was trading 0.04% lower at 1.4487 per U.S., after hitting its weakest level since March 2020 at 1.4601 .Immediate resistance can be seen at 1.4510(Jan 21st high), an upside break can trigger rise towards 1.4601(23.6%fib).On the downside, immediate support is seen at 1.43410(38.2%fib), a break below could take the pair towards 1.4278(50%fib).
USD/JPY: The U.S. dollar fell on Thursday as the yen gained strength, driven by a shift in Japan's monetary policy outlook. Traders expect further tightening as Japan responds to economic and inflationary trends. The Bank of Japan raised its interest rate to 0.5% from 0.25% last week, anticipating that rising wages and stable inflation will support the move. BOJ Deputy Governor Ryozo Himino stated that the central bank will continue to raise rates if economic conditions and inflation align with expectations. The dollar weakened 0.19% to 154.00 against the Japanese yen . Immediate resistance can be seen at 155.38 (38.2%fib) an upside break can trigger rise towards 156.73(23.6%fib). On the downside, immediate support is seen at 154.28(50%fib) a break below could take the pair towards 153.18 (61.8%fib).
Equities Recap
Europe's benchmark index hit a record high on Thursday, driven by gains in real estate stocks, as investors anticipated further monetary policy easing from the European Central Bank this year. Market sentiment was also shaped by a mix of corporate earnings reports.
UK's benchmark FTSE 100 closed down by 1.04 percent, Germany's Dax ended up by 0.41 percent, France’s CAC finished the day down by 0.88 percent.
U.S. stocks closed higher on Thursday after a volatile session, as investors reacted to a series of key earnings reports. Positive remarks from Tesla helped counterbalance a disappointing forecast from Microsoft.
Dow Jones closed up by 0.38 percent, S&P 500 closed up by 0.53 percent, Nasdaq settled up by 0.25 percent.
Commodities Recap
Gold prices surged to a record high on Thursday, driven by safe-haven demand amid U.S. tariff threats.
Spot gold was up 1.3% at $2,794.42 per ounce, as of 1:57 p.m. ET (1857 GMT), hitting its record high level at $2798.24 earlier in the session. U.S. gold futures settled 1.8% higher at $2,845.20.
Oil prices edged higher on Thursday, but gains were limited by the looming threat of U.S. tariffs on Canadian and Mexican crude imports, which could take effect this weekend.
Brent crude futures settled 29 cents, or 0.4%, higher at $76.87 a barrel. U.S. crude futures finished at $72.73 a barrel, up 11 cents, or 0.2% higher than Wednesday, when they settled at their lowest level this year so far.