The first trading session of February 2025 will set the tone for the week, with key economic data releases, corporate earnings, and global market developments driving investor sentiment.
Markets will react to fresh signals on economic growth, inflation trends, and monetary policy expectations.
KEY INDICATORS
China’s services sector performance
Caixin services PMI (January): This key indicator will provide insights into the strength of China’s services sector, a crucial component of the country’s economic recovery.
A strong reading could boost investor confidence in global demand, while weaker data may raise concerns about slowing growth.
US economic data
Factory orders (December): The latest factory orders data will give a glimpse into manufacturing sector activity, reflecting business investment trends and supply chain conditions.
Global market reactions
European market sentiment: Early trading in Europe will respond to weekend developments, including geopolitical events or central bank commentary that may influence global markets.
Oil price movements: Energy markets will react to updates on OPEC+ production decisions and geopolitical factors affecting crude oil supply.
MARKET MOVERS
EUR/USD
Possible short preference Short positions below 1.0217 with targets at 1.0196 & 1.0174 in extension. Alternative scenario Above 1.0261 look for further upside with 1.0294 & 1.0316 as targets. The RSI is bearish and calls for further decline.
Pound to euro breaches 1.20 on Trump tariffs
Trump will hit the eurozone with tariffs, but the UK is more insulated owing to its deficit in goods trade with the US. Pound sterling gapped higher against the euro at the opening of Asian FX trade, as predicted in our weekend note covering President Donald Trump’s threat to sanction EU imports.
The pound to euro exchange rate opened at 1.2011 from Friday’s close of 1.1964, hitting a high of 1.2032.
Over the weekend, Trump imposed a 25% tariff on imports from Canada and Mexico, with a 10% tariff placed on oil imports from both countries.
A 10% import tariff was levied on Chinese goods.
These measures confirm that Trump is serious about tariffs, and the EU will soon suffer a similar fate.
Asia-Pacific markets mostly rise after Wall Street gains overnight
Asia markets mostly rose on Friday after Wall Street gained overnight as investors assessed Big Tech earnings.
Japan’s benchmark Nikkei 225 and Topix advanced for the third straight day.
The Nikkei 225 gained 0.15% to close at 39,572.49.
The broader Topix index was up 0.24% to close at 2,788.66.
The Tokyo consumer price index, excluding fresh food, rose 2.5% year on year in January, compared with 2.4% in the previous month.
South Korea’s Kospi retreated 0.77% to end the day at 2,517.37, while the small-cap Kosdaq closed flat at 728.29 after a four-day break.
Over in Australia, the S&P/ASX 200 rose for the third consecutive day to close at an all-time high, climbing 0.45% to 8,532.30.
Crude Oil WTI
Possible long preference Long positions above 74.73 with targets at 75.16 & 75.73 in extension. Alternative scenario Below 73.48 look for further downside with 72.30 & 71.71 as targets. The RSI is bullish and calls for further upside.
TODAY’S NEWS HEADLINES
Oil set for weekly losses as US prepares to impose tariffs on Canada and Mexico
Oil prices eased on Friday and ended the week lower as investors awaited the United States’ 25% tariffs on Canada and Mexico, expected to take effect on Saturday.
Brent crude futures for March, which expire on Friday, settled down 11 cents at USD 76.76 a barrel. The more actively traded second-month futures fell 31 cents to USD 75.58.
US West Texas Intermediate (WTI) crude closed down 20 cents, or 0.3%, at USD 72.53.
For the week, the Brent and WTI benchmarks lost 2.1% and 2.9%, respectively, marking the second consecutive week of losses.
European auto stocks slide 3.5% as Trump tariffs weigh on global markets; Stoxx 600 falls 1.3%
European markets opened sharply lower on Monday after US President Donald Trump imposed trade tariffs on several countries and threatened similar measures against the European Union and UK.
The pan-European Stoxx 600 was down 1.34% at 8:30 a.m. London time, with all sectors firmly in negative territory.
Europe’s tech, industrial, and mining indexes each shed around 2%. Germany’s DAX index was more than 1.7% lower in early trade.
Asia-Pacific markets traded lower overnight following Trump’s tariff announcement.
US stock futures tumbled on Sunday night as investors assessed the potential impact of the new tariffs on the economy and corporate profits.
Gold surges past USD 2,800 as tariff threats reignite record rally
Gold prices surpassed the key USD 2,800 mark for the first time ever on Friday, fuelled by a rush to safety following US President Donald Trump’s tariff threats, which heightened concerns over global economic growth and inflationary pressures.
Spot gold rose 0.6% to USD 2,810.55 per ounce after hitting a record high of USD 2,817.23 earlier in the session.
US gold futures were little changed at USD 2,822.90, trading at a premium to spot gold rates.
Spot silver fell 0.5% to USD 31.52 an ounce after reaching a more than one-month high on Thursday.
