Articles
US: Employment Cost Index rises by 1% in Q4 vs. 1.1% expected
287915 January 31, 2023 22:05 FXStreet Market News
- Employment Cost Index in the US rose less than expected in Q4.
- US Dollar Index lost its traction and erased daily recovery gains after the data.
The data published by the US Bureau of Labor Statistics revealed on Tuesday that the Employment Cost Index, compensation costs for civilian workers, increased by 1.1% in the fourth quarter.
This reading came in below the market expectation of 1% and followed the 1.2% increase recorded in the third quarter.
“Wages and salaries increased 1.0% and benefit costs increased 0.8% from September 2022,” the BLS further noted in its publication.
Market reaction
With the initial reaction, the US Dollar lost some strength against its major rivals and the US Dollar Index was last seen trading virtually unchanged on the day at 102.22.
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Canada: Gross Domestic Product expands by 0.1% in November vs. 0% expected
287914 January 31, 2023 22:05 FXStreet Market News
- Canadian economy grew by 0.1% on a monthly basis in November.
- USD/CAD holds in positive territory slightly below 1.3450 after the data.
Real Gross Domestic Product (GDP) in Canada grew by 0.1% on a monthly basis in November, the data published by Statistics Canada revealed on Tuesday.
This reading matched October’s expansion of 0.1% and came in slightly better than the market expectation of 0%.
“Advance information indicates that real GDP was essentially unchanged in December,” Statistics Canada noted in its publication. “Increases in the retail, utilities, and public sectors were offset by decreases in the wholesale, finance and insurance, and mining, quarrying, and oil and gas extraction sectors.”
Market reaction
USD/CAD pair edged slightly lower with the initial reaction and was last seen trading at 1.3437, gaining 0.4% on a daily basis.
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Binance Coin Price Forecast: BNB underpinned as rally steams on ahead of Fed
287912 January 31, 2023 22:02 FXStreet Market News
- Binance Coin price holds steady after the small decline on Monday.
- BNB sees traders bracing for a crucial showdown between Fed and markets.
- Bulls are putting their weight in the balance as a dovish outlook is expected.
Binance Coin (BNB) is set to jump higher as the US Federal Reserve comes out first with its assessment of the US economy and the best interest rate path approach in the future. Expectations are that the Fed will commit to a small 25-basis-point hike once or twice and go home for the year. If that is the case, a soft landing is nearby as the job market is holding up nicely. The US economy is still growing solidly, and some rejoicing and sighs of relief in several asset classes can be heard.
Binance Coin price entices bulls
Binance Coin price is seeing traders preparing for the US Federal Reserve to announce as the first central bank this week with the European Central Bank and the Bank of England next up after that. For long there has been a feared dislocation between the markets and the central banks. That narrative has shifted to a dislocation between the Fed and the ECB as inflation in the Eurozone suddenly is rising again, while inflation pressure is dissipating further in the US.
BNB found support after the slide lower as this Tuesday’s price action gets underpinned around $305. Bulls are not letting go of the price action either. Should the Fed deliver a dovish hike of 25 basis points on Wednesday, expect markets to perceive that as being in line with estimations and trigger a bullish wave. A break above the feared $323.80 would make sense with $336.50 as the next profit level nearby.
BNB/USD daily chart
A breakdown would occur if Jerome Powell comes out hawkish and the Fed sticks to its 50 basis-point hikes with further commitments in the future. Markets will need to change their stance and price out the Goldilocks scenario. That means risk assets would drop lower, and BNB would head toward $290 in search of the 200-day Simple Moving Average.
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USD Index Price Analysis: Further gains likely above 102.90
287910 January 31, 2023 22:02 FXStreet Market News
- The index extends the corrective upside beyond 102.00.
- The breakout of the 102.90 region could lend extra legs to the index.
DXY advances for the fourth consecutive session well north of the 102.00 hurdle on Tuesday.
Further recovery faces the immediate hurdle at the 3-month resistance line around 102.90. If the index manages to clear this region it could accelerate gains to the provisional 55-day SMA at 104.22.
Below this line, the dollar is expected to keep the short-term bearish bias unchanged.
In the longer run, while below the 200-day SMA at 106.47, the outlook for the index remains negative.
DXY daily chart
OPEC production fell 50K bpd in January – survey
287909 January 31, 2023 21:56 Forexlive Latest News Market News
- January output falls 50K bpd from December to 28.87 million barrels per day
- Members complied with quota cuts at 172% vs 161% in December
- Members undershoot Jan output target by 920k bpd vs 780k bpd in December
Iraq had a fresh production decline in January, according to the survey.
Nigeria repeatedly pledges to get its production on track but there was no progress in January. However a good portion of the missing barrels are being stolen so those presumably still end up on the global market.
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United States Redbook Index (YoY) up to 4.9% in January 27 from previous 4.6%
287908 January 31, 2023 21:56 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
USD/MXN: Downside surprise on Mexican GDP to put pressure on the Peso – Commerzbank
287907 January 31, 2023 21:56 FXStreet Market News
At the start of the week USD/MXN traded further sideways below the 19 mark. Mexican GDP data for Q4 2022 will be published today. A downside surprise could put pressure on the Peso, economists at Commerzbank report.
Economic momentum likely to have weakened
“Today, the Mexican office of statistics (INEGI) will publish a first estimate of growth in Q4 2022 – which will provide a backward glance. Bloomberg consensus expects that economic momentum will have weakened and expects seasonally adjusted QoQ growth of 0.3%, following 0.9% the previous quarter. Year-on-year consensus expects growth of 3.4% (in Q3 the rate stood at 4.3%). As a result, growth would be below Banxico’s projections.”
“If the data were to surprise on the downside and come in well below Banxico’s projections that is likely to put pressure on the Peso, above all in a more risk-averse market environment.”
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AUD/USD struggles near one-week low around 0.7000 amid softer risk tone, USD strength
287906 January 31, 2023 21:40 FXStreet Market News
- AUD/USD continues losing ground for the second straight day and drops to a one-week low.
- The dismal Australian data weighs on the domestic currency amid a modest USD strength.
- Traders look to the US macro data for a fresh impetus ahead of the FOMC on Wednesday.
The AUD/USD pair remains under heavy selling pressure for the second straight day on Tuesday and drops to over a one-week low heading into the North American session. The pair is currently placed around the 0.7000 psychological mark and seems vulnerable to prolonging its recent pullback from the highest level since June 2022 touched last week.
The Australian Dollar weakens across the board in reaction to the dismal domestic macro data, which showed that Retail Sales slumped 3.9% in December amid the persistent rise in prices. Furthermore, investors are increasingly pessimistic about the economic outlook amid expectations that additional rate hikes by the Reserve Bank of Australia (RBA) will contribute to the cost of living crisis. This, along with a modest US Dollar strength, exerts downward pressure on the AUD/USD pair.
The worst COVID-19 outbreak in China raises uncertainty about a strong recovery in the world’s second-largest economy and continues to weigh on investors’ sentiment. This is evident from a generally weaker tone around the equity markets, which is driving some haven flows towards the buck and weighing on the risk-sensitive Aussie. The USD uptick could also be attributed to some repositioning trade ahead of the highly-anticipated FOMC monetary policy decision, due to be announced on Wednesday.
The Fed is expected to further slow the pace of its policy-tightening cycle and deliver a smaller 25 bps rate hike. The recent US macro data, however, point to an economy that is resilient despite the rapidly rising borrowing costs and backs the case for the Fed to stick to its hawkish stance for longer. This, in turn, prompts traders to lighten their USD bearish positions, though a downtick in the US Treasury bond yields keeps a lid on any meaningful upside, at least for now.
Heading into the key central bank event risk, traders on Tuesday will take cues from the US economic docket, featuring the Chicago PMI and the Conference Board’s Consumer Confidence Index. This, along with the US bond yields and the broader risk sentiment, might influence the USD price dynamics and provide some impetus to the AUD/USD pair.
Technical levels to watch
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USD/CAD to test solid resistance at 1.3515/20 – Scotiabank
287905 January 31, 2023 21:40 FXStreet Market News
USD/CAD tested the 1.33 area yesterday but is trading through the mid-1.34 area today. The pair could exnted its race higher to the 1.3515/20 region, economists at Scotiabank report.
CAD slips back all to easily
“The USD made quick work of pushing through minor resistance in the mid-1.33s and has extended through stiffer, short-term resistance in the low-1.34s.”
“USD/CAD gains risk extending to retest key near-term resistance around 1.3515/20 in the short run, where we expect more solid resistance to the USD’s advance.”
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US employment cost index for Q4 1.0% vs 1.1% estimate
287904 January 31, 2023 21:35 Forexlive Latest News Market News
- Employment cost index for Q4 1.0% vs 1.2% last quarterly
- Wages 1.0% vs 1.3% last quarter
- Benefits 0.8% vs 1.0% last quarter
The data was a bit weaker than expectations. US yields have moved lower with the two-year trading at 4.217%. The 10 year is trading at 3.51% down -4.0 basis points. However, at 1.0%, it still is relatively high from historical perspective. Pre-pandemic, the numbers were south of 1% on a regular basis. Inflation is lower but is still relatively elevated.
US stocks have erased their declines and trade above and below unchanged.
US employment cost index for the fourth quarter
United States Employment Cost Index below expectations (1.1%) in 4Q: Actual (1%)
287903 January 31, 2023 21:35 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Canada Gross Domestic Product (MoM) above expectations (0%) in November: Actual (0.1%)
287902 January 31, 2023 21:35 FXStreet Market News
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.