How will the markets behave today? This 6 February Market Moving Fundamental Events from HotForex will guide you throughout today’s fundamental drivers in the market.
6 February, HotForex – The sell-off in stock markets deepened in Asia overnight, with Nikkei, Topix and Hang Seng losing more than 4%, the ASX 200 more than 3%, the CSI nearly 3%. With this level of correction bond markets benefited from a flight to safety and yields declined markedly, after yesterday’s fresh move higher.
Asian Market Outlook
With the global equity rout deepening, the question is will central bankers take note and with the change at the top of the Fed speculation that the sell-off will halt the rise in rates is mounting. In Japan Kuroda told parliament that it would be inappropriate to raise the yield target even by a small margin. Meanwhile, the focus has shifted to plunge in a popular exchange-traded fund, that was designed to bet against volatility and tanked in after-hour trade.
The dollar has held firm, and the yen firmed amid a persisting global risk aversion theme. Japan’s Nikkei closed with a 4.8% loss and was showing intraday losses of over 6% at the lows, while the Shanghai Composite and Australia’s ASX 200 racked up losses of over 3%. The narrow trade-weighted USD index (DXY) logged a two-week high at 89.72 before settling around the 89.50 mark, which is still just over 1% from the low seen last Friday.
USDJPY clocked an eight-day low at 108.50 as Asia as the yen continued to find safe haven bids as global stock markets continued to head south. Driving risk aversion is spiking sovereign yields and the concomitant rise inflation expectations and prospects for the Fed to lead key central banks to take away monetary policy stimulus.
Expectations are for USDJPY to grind lower over the coming days and weeks, though see the risk of there being a greater magnitude of declines in AUDJPY, which tends to correlate strongly with global stock market direction.
Today’s strongest currency is the NZD ahead of tomorrows rate decision.
German Factory Orders
German manufacturing orders jumped 3.8% m/m in December, much more than anticipated and with November revised up to -0.1% m/m from -0.4% m/m reported initially. An exceptionally strong number that points to ongoing strong growth in manufacturing. The statistical office reported that the main impulses came from export orders and here mainly orders from other Eurozone countries, which jumped sharply higher at the end of the year.
Main Macro 6 February Market Moving Fundamental Events
- US Trade Balance – a further fall to $-52.0 bln from $-50.5bln for the December number
- CAD Ivey PMI – Expected to rise from 60.4 to 61.0
- NZD Jobs Data – Q4 Employment Change (No Change expected -0.2%), Unemployment (No Change expected 4.6%) and Participation Rate (a fall to 70.8% from 71.1%)
This article about 6 February Market Moving Fundamental Events was written by Stuart Cowell, Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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