Image Source: Unsplash
 

Asian equities are mostly subdued and down this morning following a mixed handover from Wall Street driven by stubbornly sticky US inflation data, while the month-over-month print was in line with expectations the headline year-over-year number was firmer leading to some whipsaw market action as investors sought to make sense of the data. The CPI release was followed by Fed speak from two notable voters, Williams and Harker, who both leaned towards the tune of rates still having a way to go, pointing to a minimum of 5% benchmark while not ruling now meaningful moves above that level depending on the data. 

UK inflation data for January has ticked down below expectations to 10.1% from 10.5% in December, confirming the third consecutive decline from the October peak of 11.1%, core (ex-food energy) also retreated from 5.8% from 6.3%. This will give a glimmer of hope for market watchers that the official line on a meaningful decline in inflation this year may materialize, however, investors remain dubious as to the extent of the decline as the Bank of England’s official target of 2% isn’t seen until the second half of 2024. The remainder of the European data docket is scant. In the UK, the ONS house prices data for December will be eyed for additional confirmation that price rises continue to decline in response to the rise in mortgage rates pressuring buyers. Eurozone industrial production is expected to have fallen by 0.7% in December, however, a sharp drop in Germany and an 8.5% decline in Ireland points to the potential for a larger overall decline.

In the US, January retail sales will be the focus for investors, market expectations are looking for a sizable monthly uptick rebounding from December’s downside, and car sales are believed to be a stand-out performer. The weather input is also believed to have driven the recovery, with January’s unusually mild weather seen promoting activity, just as the December drop was attributed to severe pre-Christmas storms, a really robust number above 1.5% may lead to another bout of market volatility as investors once again will be wary of the Feds response to an increase in the loosening of financial conditions. January US industrial production may also witness an uptick driven by mild weather which likely boosted manufacturing activity but means that seasonal demand for some utilities will probably have been weaker than usual.
 

FX Options Expiration New York Cut

• EURUSD 1.08(397m)
   

Overnight News of Note

• China Stocks In Hong Kong Head For Correction As Selloff Extends
• China Bolsters Liquidity Support To Meet Surge In Loan Demand
• Japan To Clear Way For SDF To Shoot Down Encroaching Balloons
• RBA: Australian Rates Have Not Peaked, Path To Soft Landing Narrow
• RBA’s Lowe Says He Won’t Resign, Warns Of 2-Sided Economic Risks
• Inflation Report Keeps Fed On Track To Continue Rate Increases
• Fed Officials Float Even Higher Rates After Brisk Inflation Data
• US Dollar Finds Friends After Sticky US Inflation Readout
• Treasury Yields Hold Tuesday Advance On Higher Rates Outlook
• Oil Extends Drop On Large Stockpile Build And Inflation Concerns
• Devon Delivered A Disappointing Q4, Even With Lower Energy Prices

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4177

• Primary support is 4005
• Primary objective is 4384
• Below 4000 opens 3965
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearish below 1.0810

• Primary resistance is 1.0950
• Primary objective is 1.0620
• Above 1.0820 opens 1.09
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish below 1.21

• Primary resistance  is 1.2265
• Primary objective 1.1840
• Above 1.2265 opens 1.2337
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

USDJPY Bias: Intraday Bullish above Bearish Below 132.50

• Primary support  is 130
• Primary objective is 134.70
• Below 130.80 opens 130.11
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

AUDUSD Bias: Intraday Bullish Above Bearish below .7050

• Primary resistance is .7050
• Primary objective is .6750
• Above .7150 opens .7250
• 20 Day VWAP bearish, 5 DayVWAP bearish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 21500

• Primary support 21200
• Primary objective is 25000
• Below 20300 opens 19500
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

More By This Author:

Will Equity Bulls Get An Inflation Heartbreaker?
A Cautious Start To Trading Ahead Of Inflation Data
Daily Market Outlook - Friday, Feb. 10