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Markets experienced a risk-off mood at the start of the New Year as investors paid close attention to key economic data due for release later in the week. The dollar advanced to a 2-week high with a focus on the FOMC meeting minutes, while Yen jumped to a 7-month peak on rising expectations of a policy tweak by the BoJ. German Inflation data and US Manufacturing PMI are key events of the day. Stock markets-maintained gains as futures plunged on Tuesday.
The EURUSD pair tanked by -1.30% as safe haven flows lifted the dollar ahead of the highly anticipated FOMC meeting minutes and jobs data this week. In the eurozone, the German inflation data will be due following upbeat employment data in December. The German Unemployment Change came in at -13K vs 15K expected with the unemployment rate dropping to 5.5% vs 5.6% surveyed. That said, traders will also pay attention to the US Manufacturing PMI due today, which suggests a contraction in the sector. Bears took over from 1.0680 intraday resistance and may find support at 1.0450 and 1.0400.
NZDJPY traded -1.98% lower as the Yen gained on possible monetary policy tweaks by the BoJ at its upcoming January 18 meeting. Earlier, the Chinese Caixin Manufacturing PMI was at 49.0 failing to beat the previous reading of 49.4 which showed a weaker demand in the economy. This along with dampened risk flows weighed on the NZD. Looking ahead, the New Zealand Global Dairy Trade Price Index will be released. The pair tumbled from 83.00 and targets may be seen at 80.80 and 79.30 in the near term.
GBPAUD gained +0.57% following positive PMI data. The Manufacturing PMI in the UK came in at 45.3 against the 44.7 surveyed. The Composite PMI and Services PMI will be released on Thursday with the services sector expected to enter into an expansion zone. In Australia, the Manufacturing PMI slumped to 50.2 from 51.3. The pair bounced off 1.7670 and the bulls may be challenged by 1.7880 and 1.8000
European stocks soared early Tuesday as bulls got boosted by positive German employment data ahead of the Eurozone inflation print. FTSE100 rose by +1.92% after bouncing off the 7410 daily low and upside gains are capped by the 7600 psychological level. CAC40 surged by +1.23% after breaking above the 6600 level and the next key resistance is at the 6700 level. DAX advanced by +1.49% as bulls found a near-term support level at 13850, a 2-month low, and bulls could target 14500 if the 14250 level fails to hold.
US stock futures recovered earlier gains as investors maintain an optimistic mood ahead of US Manufacturing Data. S&P500 futures soared by +0.89% after finding near-term support at the 3820 level and bulls remain challenged by the 3900 resistance. A Break above that level could open the way for a 4000 psychological level. Nasdaq100 futures extended gains by +0.98% after reclaiming the 11000 psychological level. The next key levels to watch out for are 11250 and 11500. DJIA index futures were up by +0.78% as bulls defended the 33000-support level, however, gains remained capped by the 33500 resistance.
In commodity markets, Crude oil gave in earlier gains on a stronger dollar. USWTI crude oil futures plunged by -1.20% after bulls whipsawed from the 81.00, near-term resistance. On the downside, bears may target 77.50, an 8-day low. Brent crude oil stocks were down -1.09% after slightly sweeping above the 86.00 level and a break below the 82.50 level could reinforce selling pressure on the black liquid.
