RBA surprisingly slashed its Official Cash Rate by 25 basis points to 2.25 percent from 2.50 percent on Tuesday. Meanwhile, the Bank of England decided rate stayed at 0.50 percent and GBP375 billion, respectively.
Markit reported UK Construction PMI surged to 59.1, well above the 56.9 median forecast. The January rebound was close to November’s 59.1 reading. Meanwhile, Services PMI also came in better than forecast at 57.2 and was just a tad lower than November’s 58.6 reading.
CAD Ivey PMI slumped to 45.4 its weakest reading since February 2011. On the other hand, Building Permits, Unemployment Change and Jobless Rate all were better at 7.7 percent, 35,400, and 6.6 percent, respectively.
In the United States, the latest report from the Department of Labor showed that there were fewer Americans who filed for unemployment claims last week. Jobless Claims was lower than expected at 278,000 compared to its 287,000 forecast. Trade deficit in the US widened to its largest in two years to -$46.6 billion in December. The November deficit has been revised from -$39 billion to -$39.8 billion.
US Personal Spending and Personal Income diverged, -0.3 percent and 0.3 percent, respectively. Core PCE Price Index was flat. ISM Manufacturing PMI came in lower than expected (53.5 versus 54.9 forecast).
US Non-Farm Payrolls for January rose 257,000 compared with expectations for a 236,000 rise. The Unemployment Rate inched up to 5.7 percent.
Gold had a difficult time sustaining gains and staying close to $1300 this week. Price declined $57 before settling the week with a close at $1,233. Critical support is around $1,200. Near-term resistance remains at $1,300.
Finally some respite was seen in Oil as it registered its second consecutive bullish weekly close this week. Price pierced through the $50 level easily and managed to rise as high as $54 before closing the week just above $52. The $50 mark must hold if bulls want to keep price from falling again.
EURUSD failed to keep gains it made through 1.1500 and ended the week virtually unchanged. This would be a blow to the pair, more so if the 1.1300 fails to hold in the coming week. Bulls need to push through 1.1600 to negate a significant amount of bearishness in this pair.
USDJPY was supposed to have an uneventful week until Friday when the pair surged through 119 and closed above this level. The pair could then attempt a move to 120 to break the status quo.
GBPUSD did better than EURUSD this week as the former managed to print its second consecutive bullish week. However, GBPUSD still needs to break the ceiling past 1.5600 to gain a better foot hold this February.
The Week Ahead
Monday will start the week with the release of Japan’s Current Account and Consumer Confidence; Australia’s ANZ Job Ads; and Canada’s Housing Starts. The two-day G20 meetings will also start today.
Tuesday with Japan’s Tertiary Industry Activity; Australia’s NAB Business Confidence and HPI; China’s PPI and CPI; Switzerland’s CPI and Jobless Rate; UK NIESR GDP Estimate, Manufacturing Production and Industrial Production; and US JOLTS Job Openings and Mortgage Delinquencies.
Wednesday will only have Australia’s Home Loans; China’s New Loans; and Eurogroup meetings.
On Thursday, there will be a raft of news such as Business NZ Manufacturing Index; Australia’s MI Inflation Expectations and jobs data; Japan’s Core Machinery Orders; BOE Inflation Report, Inflation Letter, and BOE Governor Carney’s speech; US Retail Sales and Jobless Claims; and EU Economic Summit.
On Friday, there will still be news to watch out for such as RBA Governor Stevens’ speech; France, Italy, and Germany’s Preliminary GDP; Eurozone Flash GDP; Canada’s Manufacturing Sales; US Import Prices and Preliminary UoM Consumer Sentiment.