Daily Market Outlook, February 9, 2023

European Markets On the Front Foot, As German Inflation Increases At A Slower Rate

Asian markets trade with a bid tone, China indices pushed higher on PBOC liquidity interventions, an overnight reversal in US futures adds fuel to the risk on sentiment as delayed German inflation data came in at a lower rate than expected, markets immediately repriced ECB rate hikes as investors price a lower net Eurozone CPI estimate for January at circa 8.5%. Robust earnings from European stalwarts such as Siemens and Unilever along with takeover chatter as Abu Dhabi Bank are reported to be eyeing a bid for Standard Chartered Bank, all in all this has investors in buoyant spirits at the open of European trade.

The data docket is once again scant for the day ahead. In the UK testimony at the House of Commons Treasury Select Committee of Bank of England (BoE) Governor Bailey and other MPC members, Chief Economist Pill and MPC  members Tenreyro and Haskel will garner investor attention. Last week the BoE voted to raise interest rates for the 10th consecutive time by 50bp to 4%, however, the market read was of a more dovish tilt to proceedings, given Governor Bailey’s less than committal stance on further policy tightening, today’s hearing will give for committee members a platform to provide colour on this and to address any market misperceptions they might feel to be in the reaction to their latest rate adjustment and outlook.

In the US unemployment claims data are forecast to reaffirm a strong labour market. Markets expect initial claims to nudge higher towards 195k, admittedly still at very low levels despite nascent signs of significant job losses as witnessed by job cuts seen across the tech sector.

FX Options Expiration New York Cut

  • EURUSD 1.0950 (456mln)

  • USDJPY 128.00(490mln)

  • AUDUSD .6400 (750mln)

Overnight News of Note

  • Dollar Flat After Fed Official Comments; Focus On CPI Data Next Week

  • Traders Are Starting To Put Big Money On The Fed Going To 6%

  • Fed’s Williams Says Peak Rate Forecasts Still ‘Very Reasonable’

  • Fed’s Cook Says More Rate Hikes Needed To Curb Inflation

  • Japan Ruling Party Said to Be Divided If Kishida Seeks BOJ Pivot

  • Fed Officials Signal Higher Rates Will Be Needed To Contain Inflation

  • Biden Says He Sees No Recession In 2023 Or 2024 -PBS

  • U.S.-Bound Container Shipments From Asia Plunge As Inflation Bites

  • ECB Rates Must Hit Significantly Restrictive Levels, Kazaks Says

  • ECB’s Knot Says Half-Point Rate Hike May Be Needed In May

  • Bank Of Canada Debated Whether To Hike Or Hold In January

  • Bosses Call On UK Chancellor For More Tax Breaks To Avoid Recession

  • UK Housing Market Hit By Widest Prices Falls Since 2009 In January

  • Coinbase's CEO Cites 'Rumors' The SEC May Ban Crypto Staking

  • Oil Takes Breather After Three-Day Rally As Outlook Clouded

  • First Australian Coal Shipment To China In Two Years To Dock

  • Foreign Investors Start 23 With Record $21bn Push Into China Stocks

  • Walt Disney Stems Streaming Losses In Iger’s First Quarter Back

  • Walt Disney To Axe 7,000 Jobs In $5.5bn Cost-Cutting Plan

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4120

  • Primary support is 3990

  • Primary objective is 4384

  • Below 4080 opens 4020

  • 20 Day VWAP bullish, 5 Day VWAP bearish

EURUSD Bias: Intraday Bullish Above Bearish below 1.0810

  • Primary resistance is 1.0950

  • Primary objective is 1.06

  • Below 1.0580 opens 1.0500

  • 20 Day VWAP bearish, 5 Day VWAP bearish

GBPUSD Bias: Intraday Bullish Above Bearish below 1.21

  • Primary resistance  is 1.21

  • Primary objective 1.1840

  • Above 1.2165 opens 1.2260

  • 20 Day VWAP bearish, 5 Day VWAP bearish

USDJPY Bias: Intraday Bullish above Bearish Below 131

  • Primary support  is 130

  • Primary objective is 134.70

  • Below 130.80 opens 130.11

  • 20 Day VWAP bullish, 5 Day VWAP bullish

AUDUSD Bias: Intraday Bullish Above Bearish below .7050

  • Primary resistance is .7050

  • Primary objective is .6750

  • Above .7150 opens .7250

  • 20 Day VWAP bearish, 5 DayVWAP bullish

BTCUSD Intraday Bias: Bullish Above Bearish below 22200

  • Primary support 21200

  • Primary objective is 25000

  • Below 20300 opens 19500

  • 20 Day VWAP bullish, 5 Day VWAP bullish