Talking Points:
Commodity Dollars rise, Yen falls as risk appetite rebounds in Asia
Quiet economic calendar hints sentiment trends likely to stay in focus
S&P 500 futures point upward, hinting risk-on mood set to continue
A recovery in risk appetite defined FX market price action at the start of the trading week. The sentiment linked Australian, Canadian and New Zealand Dollars outperforming alongside a rally on Asian stock exchanges while the anti-risk Japanese Yen is on the defensive.
Investors’ chipper mood appears corrective after the release of January’s US employment data fueled risk aversion on Friday. While payrolls numbers trailed forecasts, the unemployment rate unexpectedly declined and wage growth impressed on the upside.
This appeared to rekindle Fed rate hike speculation (as we suspected might happen ahead of the release). The US Dollar moved broadly higher against its major counterparts alongside a rally in front-end US bond yields. Meanwhile, the stocks declined to reflect returning fears of on-coming tightening.
Looking ahead, a quiet economic calendar is likely to see sentiment remains remain at the forefront. S&P 500 futures are pointing higher, suggesting the recovery in risk appetite is likely to continue for now absent the emergence of unexpected news-flow.
How will the US Dollar fare against the major currencies this year? Check out our 2016 forecast!
Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
01:18
CNH
Foreign Reserves ($) (JAN)
3230.9B
3210.0B
3330.0B
23:50
JPY
BoP Current Account Balance (¥) (DEC)
960.7B
1051.7B
1143.5B
23:50
JPY
BoP Current Account Adjusted (¥) (DEC)
1635.4B
1590.0B
1423.5B
23:50
JPY
Trade Balance BoP Basis (¥) (DEC)
188.7B
305.3B
-271.5B
23:50
JPY
Bank Lending Incl Trusts (YoY) (JAN)
2.3%
–
2.2%
23:50
JPY
Bank Lending Ex-Trusts (YoY) (JAN)
2.4%
2.2%
2.2%
00:00
JPY
Labor Cash Earnings (YoY) (DEC)
0.1%
0.7%
0.0%
00:00
JPY
Real Cash Earnings (YoY) (DEC)
-0.1%
–
-0.4%
00:30
AUD
ANZ Job Advertisements (MoM) (JAN)
1.0%
–
-0.1%
04:30
JPY
Bankruptcies (YoY) (JAN)
-6.38%
–
1.89%
05:00
JPY
Eco Watchers Survey Current (JAN)
46.6
48.4
48.7
05:00
JPY
Eco Watchers Survey Outlook (JAN)
49.5
48.4
48.2
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
08:00
CHF
Total Sight Deposits (FEB 5)
–
472.7B
Low
08:00
CHF
Domestic Sight Deposits (FEB 5)
–
407.3B
Low
09:30
EUR
Eurozone Sentix Investor Confidence (FEB)
7.4
9.6
Low
11:00
EUR
ECB’s Walter Speak in Amsterdam
–
–
Medium
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.0897
1.1034
1.1097
1.1171
1.1234
1.1308
1.1445
GBP/USD
1.4236
1.4376
1.4439
1.4516
1.4579
1.4656
1.4796
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Source: Daily fx