Markets maintained the erratic price action almost the entire week… until a robust US Nonfarm Payrolls surprised everybody and lifted the Greenback to yearly highs when tracked by the USD Index (DXY). Additionally, the Fed kept its monetary status quo, as largely anticipated, while Powell said a rate cut in March looks off the table.
Starting Monday, the US calendar includes the final print of the Services PMI along with the key ISM Services PMI. Balance of Trade figures are due on February 7, while usual weekly Initial Jobless Claims and Wholesale Inventories come on February 8. In the meantime, DXY navigates the area of yearly highs and approaches the key 104.00 barrier, bolstered by rising yields and solid data.
In the euro area, the final Services PMI in Germany and the euro bloc are due on February y along with the German Balance of Trade results. Retail Sales in Euroland come on February 6 and the final Inflation Rate in Germany for the month of January is due on February 9. EUR/USD maintained a consolidative mood during the week, although Friday’s sharp advance in the US Dollar relegated the pair to the sub-1.0800 zone.
Across the Channel, the always-relevant Services PMI is due on February 5, seconded by BRC Retail Sales Monitor and the Construction PMI on February 6. GBP/USD traded in a choppy fashion this week, although the NFP-driven strong rebound in the greenback relegated it to the lower end of the range well south of 1.2700.
In Japan, Household Spending is out on February 6 followed by preliminary readings of the Coincident Index and the Leading Economic Index on February 7. Later in the week, Bank Lending and Foreign Bond Investment are due followed by the Eco Watchers Survey, all on February 8. USD/JPY rose sharply and revisited the 148.50 zone helped by the bout of strength in the greenback and rising US yields.
In the Australian docket, Balance of Trade results opens the week prior to the RBA’s interest rate decision on February 6. Additionally, the Ai Group Industry Index is due early on February 7. AUD/USD traded well on the defensive along with the rest of the risk-linked assets, approaching the 0.6500 zone for the first time since mid-November.
Markets’ attention will also be on China and the release of the Services and Composite PMIs tracked by Caixin on February 5. In addition, the Inflation Rate and Producer Prices are due on February 8 prior to advanced Q4 Current figures on February 9.
In Canada, the BoC Market Participants Survey kicks off the week, while Governor T. Macklem speaks on February 6. On February y comes the Balance of Trade results followed by the labour market report at the end of the week. USD/CAD rose to weekly tops near 1.3480 on Friday, an area coincident with the key 200-day SMA.
