Global Markets:

  • Asian stock markets: Nikkei down 0.65 %, ASX 200 lost 0.80 %, Shanghai & Hang Seng closed for holiday
  • Commodities: Gold at $1196 (+0.45 %), Silver at $17.18 (+0.25 %), WTI Oil at $52.90 (-0.50 %), Brent Oil at $55.40 (-0.60 %)
  • Rates: US 10-year yield at 2.47, UK 10-year yield at 1.47, German 10-year yield at 0.46

News & Data:

  • Japan Retail Trade (YoY) Dec: 0.6% (est. 1.7%, prev. 1.7%)
  • Japan Retail Sales (MoM) Dec: -1.7% (est. -0.5%, prev. 0.2%)
  • Global shares, dollar retreat on Trump travel ban, weak U.S. GDP – RTRS
  • Oil extends decline as rising U.S. output weighs – RTRS
  • Dollar slips on lacklustre U.S. data, concerns over Trump trade policy – RTRS

CFTC Positioning Data:

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  • EUR short 52K vs. 67K short last week. Shorts trimmed by 15K
  • GBP short 66K vs. 66K short bus week. Unchanged
  • JPY short 67K vs. 78K short last week. Shorts trimmed by 11K
  • CHF short 14K vs. 14K short last week. Unchanged
  • CAD long 3K vs. 5K short last week. Position flips to long with change of 8K
  • AUD long 10K vs 5K long last week. Longs increase by 5K
  • NZD short 10K vs 12K short last week. Shorts trimmed by 2K

Markets Update:

The Asian stock markets reacted negatively to the political developments in the United States over the weekend, with both the Nikkei and ASX down more than 0.50 % on the day. Chinese and HK markets are closed for the Lunar New Year holiday.

In FX, the Dollar weakened against most other major currencies. EUR/USD opened with a 20 pips gap higher and rallied to 1.0740, while GBP/USD rose from 1.2540 to 1.26. Meanwhile, USD/JPY came under pressure and fell from 115.00 to 114.30. Support is seen at 114.10, followed by 113.05/10.

While the focus has been on politics in the past few days, the weak US GDP print certainly also has weighed on the US Dollar. The economy grew only 1.9 % quarter-on-quarter, while the market expected a 2.2 % increase. Given the crowded positioning, the Dollar could remain under pressure in the near-term.

Upcoming Events:

  • 07:45 GMT – RBA Assistant Governor Debelle speaks
  • 09:00 GMT – ECB Member Nowotny speaks
  • 10:00 GMT – Euro Zone Consumer Confidence
  • 13:00 GMT – German CPI
  • 13:30 GMT – US Pending Home Sales
  • 13:30 GMT – US Core PCE Price Index
  • 23:30 GMT – Japanese Unemployment Rate
  • 23:30 GMT – Japanese Household Spending
  • 23:50 GMT – Japanese Industrial Production

The Week Ahead:

Tuesday, January 31st

  • 00:30 GMT – Australian NAB Business Confidence
  • 03:00 GMT – Bank of Japan Interest Rate Decision
  • 06:30 GMT – Bank of Japan Press Conference
  • 07:00 GMT – German Retail Sales
  • 07:45 GMT – French CPI
  • 08:00 GMT – Spanish CPI
  • 08:00 GMT – ECB President Draghi speaks
  • 08:55 GMT – German Unemployment Rate
  • 10:00 GMT – Euro Zone GDP
  • 10:00 GMT – Euro Zone CPI
  • 13:30 GMT – Canadian GDP
  • 14:45 GMT – US Chicago PMI
  • 15:00 GMT – US CB Consumer Confidence
  • 21:45 GMT – New Zealand Unemployment Rate
  • 22:30 GMT – Australian AIG Manufacturing Index
  • 22:35 GMT – Bank of Canada Governor Poloz speaks

Wednesday, February 1st

  • 01:00 GMT – Chinese Manufacturing PMI
  • 01:00 GMT – Chinese Non-Manufacturing PMI
  • 08:45 GMT – Italian Manufacturing PMI
  • 08:50 GMT – French Manufacturing PMI
  • 08:55 GMT – German Manufacturing PMI
  • 09:00 GMT – Euro Zone Manufacturing PMI
  • 09:30 GMT – UK Manufacturing PMI
  • 13:15 GMT – US ADP Nonfarm Employment Change
  • 15:00 GMT – US ISM Manufacturing PMI
  • 15:30 GMT – US Crude Oil Inventories
  • 19:00 GMT – Federal Reserve Interest Rate Decision
  • 19:00 GMT – FOMC Statement

Thursday, February 2nd

  • 00:30 GMT – Australian Trade Balance
  • 08:15 GMT – Swiss Retail Sales
  • 09:30 GMT – UK Construction PMI
  • 12:00 GMT – Bank of England Interest Rate Decision
  • 12:00 GMT – BoE Meeting Minutes
  • 12:30 GMT – Bank of England Governor Carney speaks
  • 13:30 GMT – US Initial Jobless Claims

Friday, February 3rd

  • 01:45 GMT – Chinese Caixin Manufacturing PMI
  • 08:45 GMT – French Services PMI
  • 08:50 GMT – Italian Services PMI
  • 08:55 GMT – German Services PMI
  • 09:00 GMT – Euro Zone Services PMI
  • 09:30 GMT – UK Services PMI
  • 10:00 GMT – Euro Zone Retail Sales
  • 13:30 GMT – US NFP
  • 13:30 GMT – US Unemployment Rate
  • 13:30 GMT – US Average Hourly Earnings
  • 13:45 GMT – US Services PMI
  • 15:00 GMT – US Factory Orders
  • 15:00 GMT – US ISM Non-Manufacturing PMI

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