Collinson Forex Daily Market Commentary and Weekly Market Calendar

Monday, February 5, 2024


Daily Market Commentary

Non-Farm Payrolls blew through expectations (surging to 353,000 new jobs, while revising the previous month sharply higher), hinting that the US labour market remains tighter than expected, thus adding further pressure on the Fed Chairman. The Fed left rates unchanged last week, as expected, but poured cold water on market expectations of a March interest rate cut. The tight labour market will only serve to reinforce this hawkish stance. The NFP's number triggered a spike in US Bond Yields and pushed the US Dollar northwards. The EUR fell below 1.0800, while the GBP slipped to 1.2620, following a split Bank of England rate decision.

The surging reserve cut the legs out from the vulnerable commodity currencies, with the AUD testing 0.6500 (to the downside), while the NZD plunged to 0.6060. Recent weak inflation data from NZ and Australia has raised the prospects of rate cuts in the near future, allowing bond yields to tumble and the local currencies to fall. Central Bankers are talking a big game, hawkish bias, but in effect need to cut interest rates to stimulate recessionary economies. The coming week will be focused on trade and growth, while close attention will be paid to the RBA's rate decision and commentary. The Chinese New Year begins at the end of the week.

Weekly Market Calendar

5/2 Australia/Japan/China Services/Composite PMI, Australia Trade Exports/Imports, German Trade Exports/Imports, UK/France/German/EU Services/Composite PMI, EU PPI

6/2 US/Canada Services/Composite PMI, ISM Services PMI, Australia Retail Sales, RBA Rate Decision, German Factory Orders, EU Retail Sales

7/2 NZ Dairy Prices, NZ Employment, German Industrial Production, France Trade/Current Account Exports/Imports

8/2 Japan Current Account, Australia Building Permits, China CPI, Netherlands CPI, US Weekly Jobless Claims

9/2 German CPI, China Current Account, Chinese New Year begins

PLEASE NOTE THE VIEWS EXPRESSED IN THIS COMMENTARY ARE THOSE OF THE AUTHOR AND NOT COLLINSON & CO

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