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Disappointing retail sales data and industrial data from the US, the world’s largest economy, showed a contraction rekindling recession fears in the world despite China’s re-opening. ECB’s President Christine Lagarde says inflation is “too high” and will continue the tightening path to tame it. Fed’s Vice Chair, Brainard and ECB’s Schnabel are set to speak later in the New York session in Davos.
EURUSD holds above 1.0800 on ECB President Lagarde’s speech. The central bank president says they are still on course with rate hikes as inflation continues at higher levels. The dollar extended its drop as treasury yields continued to weaken. Looking ahead, the ECB will be publishing its account of the Monetary Policy report later in the day. The US economic docket will feature building permits, Philly fed Manufacturing index, Initial jobless claims, and crude oil inventories. Bulls are currently capped by 1.0886 and may retest 1.1000 near-term resistance.
AUDCHF tanked by -0.85% following downbeat data from Australia. The Australian Bureau of Statistics posted lower-than-anticipated employment data for December with the number of employed people dropping significantly to -14.6 K from an estimate of 22.5K. The unemployment rate in the country was at 3.5% missing targets of 3.4%. Producer Price Index month over month in Switzerland dropped to -0.7% from -0.5% although it did not impact the pair much. The pair got rejected at 0.6474 and may need to breach the 0.6165 low for a further slide.
NZDCAD pared -0.81% trading below the 0.8700 psychological level. Canada’s raw materials price index fell to -3.1% vs -1.3% anticipated in December. The risk-sensitive New Zealand dollar got weighed down by recession fears that resurfaced on Thursday. Later in the day, the New Zealand Business NZ PMI will be due. A move below 0.8600 may mean a sustained bearish run in the short term.
European stocks plunged as investors fret about weaker global sentiment. FTSE100 edged lower by -0.28% as bulls dropped from the 7850 resistance and bears could target the 7700 level. CAC40 lost by -1.25% and bears could target the 6900 level as 7000 holds as a near-term resistance. DAX slumped by -0.81% below the 15000 level and the next key target is at the 14700 level.
US stock futures extended Wednesday losses amid corporate earnings seasons. The US500 futures plunged by -0.51% towards the 3900-support level and a break below that level could trigger further selling towards the 3800 level. US100 futures were down -0.61% and critical levels to watch out for are 11500 resistance and 11200 support. US30 futures lost -0.47% and the next key support level is at 33000 psychological level. Upside gains are capped by the 34200 level.
In commodities, crude oil prices traded flat as recession fears took over. The American Petroleum Institute posted more than-expected crude oil stockpiles raising demand concerns in the world’s largest economy. Brent dropped -0.10% with targets on the slide seen at 82.80 per barrel while upside momentum may reclaim 86.20 and 90.80. US oil was up +0.15% as bulls got capped by $79.25 per barrel in the short term.
