Daily Market Outlook, January 30, 2023

Central Bank Decisions To Dominate The Data Docket For the Week
Asian markets have started the week with a mixed tone as investors prepare for major central bank decisions from the US, Europe and the UK. The paring in risk appetite comes against a backdrop that has been broadly constructive for the opening month of the year, investors continue to pin their hopes on peak inflation having passed, focus now shifts to the global growth narrative and central bank policy. Chinese markets have returned from the Lunar New year holiday in somewhat soggy spirits nursing losses of just under 2% on the session.
Ahead of the trifecta of central bank decisions later in the week, European investors will eye flash German GDP this morning, sentiment reads for the period imply positive inputs will provide a more upbeat number than the weaker Q4 data. Spain released CPI figures for January which came in hotter than expected 5.8% v 4.7% expected, providing further cover for hawkishness from the ECB. In the UK the Lloyds Business Barometer was released overnight, showing a more positive tone for business in January, printing a second consecutive monthly uptick to 22%, the best levels seen in the last six months of data.
In the US, the data docket is pretty sparse today, instead investors will be prepping for Tuesday’s employment cost index for Q4 ‘22, Wednesday bring the critical FOMC decision and press conference, Thursday sess ISM manufacturing data and the we is rounded out with a pivotal Non Farm payrolls release.
Markets-wise, European bourses have opened with a softer tone, the FTSE and the EuroStoxx both in the red, following from a tepid session in Assia, US futures are also pointing south with losses of just under 1%. Spanish CPI released this morning has done little to help the retreat in risk sentiment with a hotter print, a concern for European investors as they mull tiger for longer ECB action and rhetoric. US 10yr yields remain steady around 3.5%, with Dollar marginally softer on the session but still rotating around the 102 handle, Crude has leaked lower overnight trading sub $80, while Gold remains bid above 1900.

Overnight News of Note

Stocks Mixed In Choppy Trading With China, Fed In Limelight
Oil Swings As Traders Track China’s Return And Mideast Strike
China Stocks Flirt With Bull Market On Return From Holidays
China Central Bank To Roll Over Lending Tools To Spur Growth
China Vows To Boost Consumption To Power Economic Recovery
China Economy Shows Muted Improvement During Holiday Period
BoJ Kuroda: Possible To Hit Stable Inflation With Continued Easing
Key Panel Urges BoJ To Make 2% Inflation Target Long-Term Goal
McCarthy And Biden To Discuss Debt Ceiling On Wednesday
Scholz Doubles Down On Refusal Of Fighter Jets For Ukraine
Spain’s Biggest Banks Prepare To Challenge Windfall Tax
UK Business Confidence Bounces Back But Interest Rates Will Rise
US Dollar Cautiously Firm Ahead Of Busy Central Bank Week
Hedge Funds Boost Treasury Shorts To Record On Doubts Over Rally
Pension Funds In Historic Surplus Eye $1 Trillion Of Bond-Buying
Stocks Poised To Hit New Lows This Year, Survey Of Investors Shows

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)

Options Expiration For the New York Cut 10am EST

(BOLD expiries with a value of a Billion+ more magnetic if price is within the daily trading range)

EURUSD 1.0950, 1.07
USDJPY 131.40 130.00
AUDUSD .7050

CFTC Data ( Source Reuters)

USD net spec short in the Jan 18-24 period; $IDX -0.46%
EUR$ +0.86% in period, specs buy 7,365 contract long now +134,349
$JPY +1.56% in period yen short cut by 1,326 contracts now -21,635
GBP$ +0.44$ in period, short reduced by 763 contracts to -23,934
CAD specs -3,453 contracts now -30,712; AUD specs +449 contract now -33,171
BTC +7.45%, spec short increased by 810 contracts now -1,437
Next week's data likely mooted by Fed, ECB, BoE meets Feb 1-2 after period closes