Lagarde rows back on ECB hawks

“Waiting helps you as an investor and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.” - Charlie Munger

 

 

 

HEADLINES

 

 

 

• Dollar, euro trade sideways after ECB pushback
• Canadian dollar weakens as oil rally loses momentum
• Gold firms near 2-week peak as inflation risks lift demand
• Oil slides over 2% from 7-year high on more U.S.-Iran talks
• Wall Street rallies on tech boost, European shares end flat
• USD/JPY to soar towards 120 on US T-bond yields rising above the key 2% mark – SocGen
• GOLD Short Term: Upside favored

 

 

 

FOREX

 

 

 

Dollar, euro trade sideways after ECB pushback

 

 

The dollar strengthened and the euro weakened in sideways trade on Tuesday, a day after European Central Bank President Christine Lagarde tapped down expectations of aggressive interest rate hikes that have spooked bond markets.

A more hawkish tone from both the ECB and the Federal Reserve last week caught markets off guard and sent yields soaring on euro zone and U.S. debt in anticipation rates could rise faster and higher than previously expected.

 

 

Canadian dollar weakens as oil rally loses momentum

 

 

The Canadian dollar weakened against its U.S. counterpart on Tuesday, giving back some of the previous day's sharp gains, as oil prices fell and domestic data showed a surprise trade deficit.

The price of oil, one of Canada's major exports, fell as investors worried the resumption of indirect talks between the United States and Iran could revive an international nuclear agreement and allow more oil exports from the OPEC producer.

 

 

 

COMMODITIES

 

 

 

Gold firms near 2-week peak as inflation risks lift demand

 

 

Gold prices advanced to a near two-week high on Tuesday, buoyed by mounting inflation concerns and Russia-Ukraine tensions, although expectations for a U.S. interest rate hike limited gains. U.S. gold futures settled up 0.3% at $1,827.90 per ounce, ahead of the U.S. inflation data due on Thursday.

 

 

Oil slides over 2% from 7-year high on more U.S.-Iran talks

 

 

Oil slid more than 2% on Tuesday from recent seven-year highs as the resumption of indirect talks between the United States and Iran could revive an international nuclear agreement and allow more oil exports from the OPEC producer.

A deal could return more than 1 million barrels per day (bpd) of Iranian oil to the market, boosting global supply by about 1%. The nuclear talks resumed in Vienna on Tuesday.

 

 

 

STOCKS

 

 

 

Wall Street rallies on tech boost, European shares end flat

 

 

Big Tech gave major U.S. stock indexes a boost on Tuesday and European shares ended largely unchanged as rising bond yields pressured technology stocks and a sharp fall in oil prices took the shine off bumper profits from oil company BP .

The euro retreated as the European Central Bank tried to cool interest rate hike expectations.

 

 

 

ANALYSIS

 

 

 

USD/JPY to soar towards 120 on US T-bond yields rising above the key 2% mark – SocGen

 

 

“If we are going to see 10-year Note yields break 2% and the market price in a higher terminal Fed Funds rate (which seems highly likely) then USD/JPY 116 is going to break again and a move towards 120 will follow.”

“For now, and all the more so given the price of oil and other commodities, the yen seems bound to remain cheap and get cheaper. USD/JPY can trundle to 120 and interruptions on days of higher volatility are likely to be temporary.”

 

 

 

CHART

 

 

 

GOLD Short Term: Upside favored

Technical View: Long position above 1800. Target 1830. Conversely, break below 1800, to open 1790.

Comments: The pair breaks above the resistance.

 

Source: Trading Central

 

 

 

CALENDAR

 

 

 

*Times in GMT

 

Source: FX Street Economic Calendar

SOURCE

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/usd-jpy-to-soar-towards-120-on-us-t-bond-yields-rising-above-the-key-2-mark-socgen-202202081557
https://www.reuters.com/markets/europe/global-markets-wrapup-1-2022-02-08/
https://www.reuters.com/business/euro-bounce-pauses-ahead-us-inflation-2022-02-08/
https://www.reuters.com/business/oil-slips-7-year-highs-ahead-more-us-iran-talks-2022-02-08/