(03 February 2020)DAILY MARKET BRIEF 2:Europe, US equities to rebound.
WTI crude dipped below $51 a barrel, as Brent crude fell to $55.40.
Gold spiked to $1591 per oz but corrected to the $1580
level as the US 10-year yield consolidated near 1.52%. Bitcoin traded past $9500.
It looks like stock markets elsewhere could get
away with the Monday sell-off. FTSE (+0.39%) and DAX (+0.17%) futures advanced before giving back a part of gains into the European open. Dow
Jones (+0.59%), S&P500 (+0.66%) and Nasdaq (+0.87%) futures hinted that the sentiment in Europe and the US could be less impacted by the
hefty Chinese debasement. However, energy and mining stocks will certainly feel the pinch of cheaper oil and commodity prices.
Elsewhere,
manufacturing in Japan contracted faster than expected in January. The USDJPY held ground at 108.30 as safe haven inflows to the yen were
partly offset by the weak PMI figure that resuscitated the Bank of Japan (BoJ) doves.
On the data docket today, the final PMI reads for
Europe, the UK, Canada and the US should be less surprising. A bottom in German slowdown is what investors are hoping for.
The euro
traded above the 1.1080 against the US dollar and looks set to challenge the 1.11 offers unless we see a negative surprise on the data front.
The
pound consolidated gains above 1.3155 against the US dollar, the minor 23.6% Fibonacci retracement on post-Bank of England (BoE) rebound.
Today’s PMI data will likely see little market reaction. Services PMI due Wednesday matters more to the British economy where services
stand for more than 80% of the economy. But encouraging economic data should help keeping the bears away. From a technical perspective, the
actual bullish trend should remain in place above the critical 1.3120, the major 38.2% retracement.
On the corporate side, Google
will report fourth quarter earnings after the market close today. Walt Disney and Twitter will post results on Tuesday and Thursday
respectively.
By Ipek Ozkardeskaya
