Gold failed to make a decisive move in either direction. $2,020 aligns as first near-term technical support for XAU/USD. January inflation data will be featured in the US economic docket next week. Gold struggled to gather directional momentum and closed the week with marginal losses. Investors will scrutinize the January inflation data from the US next week and pay close attention to technical developments for a directional clue. Gold price fluctuated in a relatively narrow channel this week In a televised interview with CBS News's 60 Minutes on Sunday, Federal Reserve (Fed) Chairman Powell repeated that the March policy meeting was likely too soon to have the confidence to start cutting rates. He also reiterated that they could move sooner if they saw labor market weakness or inflation coming down persuasively. The benchmark 10-year US Treasury Note yield extended the rally that was fuelled by the impressive jobs report and rose more than 3% on Monday, causing Gold to end the day in negative territory near $2,020. In the absence of high-tier macroeconomic data releases and fundamental drivers, the US Dollar Index corrected lower alongside the US yields, allowing XAU/USD to stage a modest rebound. Meanwhile, Qatar, acting as a mediator, said that Hamas had given a "generally positive" response to a proposed truce deal with Israel late Tuesday. This headline, however, failed to ease concerns over a deepening crisis in the Middle East, as an Israeli official told Israel's Channel 13 that some of the demands made by Hamas in the counterproposal were entirely unacceptable. On Wednesday, risk flows started to dominate the action in financial markets as the S&P 500 Index hit a new record high after the opening bell. Although the improving risk mood made it difficult for the USD to find demand, XAU/USD failed to gather bullish momentum. Later in the American session, the 10-year US T-bond yield climbed above 4.1% after the high-yield at the latest 10-year Treasury Note auction came in at 4.09%, forcing Gold to erase earlier gains. The US Department of Labor reported on Thursday that there were 218,000 Initial Jobless Claims in the week ending February 3, down from the previous week's revised 227,000. The USD held resilient against its rivals and Gold struggled to regain its traction. In the meantime, Richmond Fed President Thomas Barkin told Bloomberg that they have time to be patient on rate changes and said that he needs to see good inflation numbers being sustained and broadening. On Friday, the US Bureau of Labor Statistics (BLS) announced that it revised the monthly Consumer Price Index (CPI) increase for December lower to 0.2% from 0.3%. The Core CPI was unrevised at 0.3% for the same period. Gold edged slightly lower in the American session as the 10-year US yield continued to stretch higher ahead of the weekend. Gold price could react to US inflation data, technical developments The BLS will release January inflation data on Tuesday. On a monthly basis, the CPI and the core CPI, which excludes volatile food and energy prices, are forecast to rise 0.2% and 0.3%, respectively. It will take a significant downward surprise in monthly CPI readings, at or below 0%, for market participants to reconsider the probability of a Fed rate cut in March. In this scenario, the 10-year US T-bond yield could retreat below 4% and help XAU/USD gather bullish momentum. According to the CME FedWatch Tool, the odds of the US central bank maintaining the policy rate unchanged at the next policy meeting is 82.5%. The market positioning suggests that the USD doesn't have a lot of room left on the upside in case CPI prints come in above market forecasts. Nevertheless, a hot inflation report could support US yields and make it difficult for Gold to gain traction. On Thursday, the Retail Sales report for January will be featured in the US economic docket. This data is not adjusted for price changes and it's unlikely to trigger a significant market reaction.  Ahead of the weekend, the Producer Price Index (PPI) data for January and the University of Michigan's preliminary Consumer Sentiment Index data for February will be watched by market participants.  In summary, unless the US inflation report meaningfully alters the market pricing of the Fed rate outlook, investors are unlikely to take large positions based on next week's data releases. Instead, they might keep a close eye on technical developments for near-term trading opportunities. Gold technical outlook The Relative Strength Index (RSI) indicator on the daily chart moves sideways near 50 and XAU/USD struggles to pull away from the 20-day Simple Moving Average (SMA), reflecting the lack of directional momentum. On the downside, $2,020 (Fibonacci 23.6% retracement of the latest uptrend) aligns as first support before $2,000 (psychological level, static level) and $1,990 (100-day SMA). On the other...

EUR/USD fluctuates in a tight channel below 1.0800 on Friday. Hawkish comments from ECB officials help the Euro limit its losses. The pair needs to break out of the 1.0700-1.0800 range to find direction. Following a two-day rebound, EUR/USD failed to preserve its bullish momentum and closed virtually unchanged on Thursday. The pair continues to move sideways below 1.0800 as investors' search for fresh catalysts continues. The US Dollar (USD) outperformed its rivals in on Thursday as the benchmark 10-year US Treasury bond yield stretched higher after the Department of Labor reported that there were 218,000 Initial Jobless Claims in the week ending February 3, down from 227,000 in the previous week. Nevertheless, the currency struggled to gather further strength and helped EUR/USD limits its losses as Wall Street's main indexes held steady. Meanwhile, cautious comments from European Central Bank (ECB) officials on the timing of a policy pivot seem to be further supporting the Euro. ECB policymaker Martins Kazaks said that he was not optimistic for a rate cut in Spring and Governing Council Member Francois Villeroy de Galhau noted on Friday that the central bank will probably cut rates this year. Similarly, policymaker Pierre Wunsch said on Thursday that there is value in waiting to get more comforting wage data before taking policy action.

The strong demand for the US 30-year bond auction, that followed two other strong 3 and 10 year auctions this week triggered no appetite across the US bonds space yesterday, most probably because the 30-year paper is a long maturity paper and is mostly purchased by insurance and pension funds. But the week has been successful for the US Treasury department which saw a solid demand for its debt this week, and that's thanks to the expectation that the rates will fall – sometime this year – and that the Treasury will also slow down the pace of purchases moving forward. Appetite in risk assets remains robust. The S&P500 index shortly traded at the 5000 psychological mark before closing a few points below this level. The rally is not only fueled by rate cut expectations and AI speculation but is also backed – to some extent – by encouraging tech earnings from the stars of the league. Note that Apple, Microsoft, Alphabet, Amazon and Meta generated nearly $140bn cash from their operations last quarter. That was the highest on record. CPI revisions The Bureau of Statistics will release the CPI revisions today, which consists of the revised month-over-month CPI figures for the past five years, incorporating some adjustments. What's important to know is that the non-seasonally adjusted data remains unchanged, hence the year-over-year figures for the entire year will remain the same. Why do people care? Normally, they don't, because these changes are small and don't change the end result. But last year, the markets cared because the revisions were more significant than usual and resulted in lower adjusted m-o-m inflation numbers for the first half and higher revisions for the second half – a hint that the moderation in inflation was not as good as thought in the second half of 2022. The latter boosted the Federal Reserve (Fed) rate hike expectations and fueled the US 2-year yield. Today's revisions could reveal if the downtrending US inflation numbers hide a more significant slowdown, or a late pick up. If the revisions hint at a slowing momentum in monthly inflation figures, the Fed doves should come back in charge and the dollar should eas. If the monthly revisions warn that inflation may not be slowing as fast as we think, the Fed doves will further retreat, and the dollar should gain. And if there are no major revisions, well all eyes will turn to next Tuesday, regular CPI update. And so goes life. FX and energy The US dollar struggles to gain further momentum above the 100-DMA. But the US economy's positive divergence from the rest of the developed nations, its healthy jobs market, its decent fiscal spending are supporting the idea that the Fed is – maybe – not the best candidate to begin the pivot dance. The European Central Bank (ECB) for example is in a better position to start cutting its interest rates to prop up its depressed economies. That idea keeps the EURUSD offered near its own 100-DMA – which stands near 1.0780. Trend and momentum indicators remain comfortable negative and supportive of a deeper downside move in the EURUSD. Today, the German inflation data is expected to confirm a slowdown below the 3% in January – that should help the bears stay in charge. Elsewhere, the yen bulls are feeling the heat of a totally unexpected return to nearly 150 level at the start of this year. The USDJPY is now trading above the 149 level, and the BoJ hawks are giving in to the expectation that the Japs won't move soon or quick enough to make 2024 the year of the yen. The USDJPY's positive trend becomes increasingly vulnerable to verbal intervention as we approach the 150 level. In energy, we see a second positive attempt above the $76pb level, despite a 5.5-mio barrel build in the US inventories. The rising geopolitical tensions, strong US growth, and Chinese stimulus remain supportive for another attempt above the 200-DMA – near $77.50pb.

Dovish BoJ weakens JPY, AUD slumps on China fears Summary Better-than-expected Initial US Unemployment Claims, easing to 218,000 from 227,000 previously lifted bond yields and the Dollar. A popular gauge of the Greenback's value against a basket of 6 major currencies, the Dollar Index (DXY) pushed up to 104.15 (104.00). US treasury yields rallied with the 10-year finishing up 5 basis points to 4.17%. The two-year US treasury rate rose to 4.45% from 4.42%. In contrast, Japan's 10-year yield fell to 0.69% (0.72%). The US Dollar soared 0.9% to 149.37 Yen from 147.97 previously. Bank of Japan Deputy Governor Uchida said that the central bank was unlikely to raise interest rates aggressively. Richmond Fed President Tom Barkin said that it's a good idea that the US central bank take its time with interest rate cuts given all the uncertainty on where the US economy is headed. China's Consumer Prices slumped 0.8% in January from a year ago, the largest drop since 2009. The USD/CNH gained to 7.2150 from 7.2050. Chinese authorities were expected to stabilize the currency and prop up the economy. The Australian Dollar (AUD/USD) often seen as the FX proxy for China, slumped 0.51% to 0.6485 (0.6527).  The Aussie soared to 0.6532 after the RBA held rates steady but warned that a further interest rate hike is possible due to persistent high inflation. Sterling (GBP/USD) dipped 0.15% to 1.2615 from 1.2630 while the Euro (EUR/USD) eased to 1.0773 (1.0780). Germany's Annual Inflation released later today, is expected to steady at 3%. Against the Asian and Emerging Market Currencies, the Greenback finished mostly higher. The USD/SGD pair (USD-Singapore) grinded up to 1.3475 (1.3460). USD/THB (Dollar-Thai Baht) climbed to 35.88 from 35.60 previously. Wall Street stocks reversed earlier losses to finish with modest gains. The DOW was last at 38,715 from 38,705 while the S&P 500 steadied to 4,999 from 4,995. Other global shares rose. Other economic data released yesterday saw Australia's December Building Permits tumble to -9.5%, matching forecasts, but lower than the previous 0.3%. Japan's Economy Watchers Current Index Survey Outlook in January rose to 52.5 from 50.4 previously. AUD/USD – Against broad-based US Dollar strength and the slump in China's CPI, the Aussie was belted to 0.6480, the support level overnight. The Australian Dollar opened in Asia yesterday at 0.6527. Overnight high traded for the Aussie was at 0.6532. EUR/USD – The shared currency dipped modestly against the US Dollar to 1.0773 from 1.0780 yesterday. Overnight the Euro traded to a high at 1.0789 before easing. The overnight low recorded was 1.0741 in subdued trade. USD/JPY – The Greenback soared against the weaker Japanese Yen to 149.48 overnight highs. Broad-based US Dollar strength and a widening yield gap between the two currencies influenced trading. The overnight low recorded was 147.13 in choppy trade. GBP/USD – The British Pound eased modestly against the overall stronger US Dollar to finish at 1.2615 against 1.2630 previously. Sterling saw an overnight high at 1.2639. The overnight low recorded for the British currency was at 1.2572. On the lookout Today's economic calendar sees light data releases. Asian markets will be quiet in anticipation of the Lunar New Year which kicks off over the weekend. Germany kicks off Europe with its January Final Inflation Rate (m/m f/c 0.2% from 0.1%; y/y f/c 3.1% from 3.8% - ACY Finlogix). Italy follows with its January Industrial Production (m/m f/c 0.9% from -1.5%; y/y f/c -2.2% from -3.1% - ACY Finlogix). China releases its January New Loans (no f/c, previous was +CNY 1,107 billion -FX Street). Canada starts off North America with its January Employment Change (f/c 15K from 0.1K – ACY Finlogix), Canadian January Unemployment Rate (f/c 5.9% from 5.8% - ACY Finlogix) and Canada's January Participation Rate (f/c 65.3% from 65.4% - ACY Finlogix). Trading perspective The higher finish in US bond yields will continue to be Dollar supportive. While other global rates were also up, the Greenback maintains its yield advantage. The US 10-year bond rate climbed to 4.17%. Germany's 10-year Bund yield was last at 2.35% (2.31% previously). Being a Friday, traders can expect adjustments and profit taking to limit the Dollar's topside. Look for consolidation today with the Greenback maintaining its overall bid. AUD/USD – The Aussie Battler remained under pressure against the Greenback, breaking its support at 0.65 cents to finish at 0.6487. Look for immediate support today at 0.6480 (overnight low). The price action suggests strong bids at the 0.6480 level. The next support level comes in at 0.6450. Immediate resistance is found at 0.6540 and 0.6570. Look for a choppy trading session today, likely between 0.6470-0.6570. USD/JPY – The Greenback stayed bid against the Japanese Yen given a widening yield differential between the two currencies. Look for immediate resistance today at 149.50 (overnight high traded was 149.48). The...

The US blue chip index has not quite reached the 5,000 level at the time of writing, it is a mere 5 points away, but it seems inevitable that this key psychological level could be coming. The question now is what happens after this level is potentially breached? There is a bit of market nervousness around the 5,000 level and the index is fluctuating ahead of this level. The S&P 500 has rallied by more than 4.68% so far this year, easily outpacing European shares, and even performing better than the Nikkei on a  YTD basis, so some fatigue around this key level is to be expected. Earnings help to justify US stock market rally There has been good news regarding earnings. After a weak start to Q4 earnings season, largely because bank earnings disappointed, the outlook has brightened. There have been some notable outperformances from big oil, Disney, the tech giants and consumer discretionary like Uber, which has pushed Q4 earnings on aggregate for the S&P 500 into positive territory for last quarter. The earnings beat is widespread, which supports the rally in US stocks broadening beyond tech. However, while earnings reports are pulling their weight when it comes to boosting the S&P 500. However, there are some risk factors, including regional banks and their exposure to commercial property, Treasury auctions and Fed speak. Beware Fed speak and the policy risk premium There is a huge amount of Fed speak this week, and at this point in the monetary policy cycle – when we are on the precipice of change – it is incredibly important. The market learns of the Fed's beliefs through policy speeches, and there are lots of those, especially from the Fed. Financial markets respond directly, not only to policy actions, but also in anticipation of them and through what they learn from speeches. More Fed speakers urge caution on rate cuts On Thursday, it was the turn of the head of the Richmond Fed, Tom Barkin, who said that regional bank lenders' problems in commercial real estate won't be enough to get the Fed to cut rates early. He also said that unless the economy turns south, the Fed won't be jumping in with rate cuts. This has weighed on bond prices and has pushed up bond yields, the 10-year Treasury yield is higher by 3 basis points so far on Thursday. The market is still pricing in just under 5 rate cuts from the Fed, with the first cut still expected to come in May. However, this seems at odds with the fairly hawkish rhetoric that we have heard from Fed members this week. When the market disagrees with the Fed, it increases the chance of the 'policy risk premium'. So, as we near a critical level in the S&P 500, the policy risk premium is increasing, and this is a risk for future gains in the S&P 500. Interestingly, the Bloomberg Fed Speak Index, which uses AI to assess news headlines from Fed speakers, is still in dovish territory and is the most dovish since 2021. This is to be expected, as the Fed has said that they will cut rates this year. But we would point out that the US economy is posting positive economic surprises, and the Citi Economic Surprise Index is at its highest level since November 2023. Added to this, the Atlanta Fed GDPNow index is predicting Q1 growth of 4.2%, this is higher than the 3% estimate in January, and suggests that the pace of US growth is picking up and not slowing down as we move into the middle of Q1. This could cause Fed members to sound more hawkish, and we will be watching this index as we move forward. Treasury auctions get bigger, but demand is strong for now Elsewhere, there are some large US Treasury auctions coming up on Thursday, including $25bn of 30-year bonds. This is the largest amount in more than 2 years, however the market has been able to absorb hefty Treasury supply so far this week, so there is not much concern about the 30-year auction. On Wednesday, the US Treasury auctioned $42bn of 10-year bonds, which was a record size for a 10-year auction. However, the yield was lower than expected and demand was solid. With the Fed still expected to cut rates this year, the outlook for longer dated Treasury auctions remains strong, and we don't see them as a risk factor for the market right now, even if the size of some of the auctions is eye watering. Watch out for US CPI revisions Economic data risk will increase from this Friday. The seasonally adjusted CPI revisions for the US are released on Friday and actual CPI for January is released next Tuesday. The revisions are worth...

Gold price keeps its range play intact near $2,040, with US CPI revisions eyed. Cautious optimism and negative US Treasury bond yields cap the US Dollar rebound Gold price stays hopeful while th $2,035-$2,030 support holds. RSI defends the midline. Gold price is treading water while defending the $2,030 level in Friday's Asian trading. Investors trade with cautious optimism ahead of the US Consumer Price Index (CPI) revisions, which could have a significant influence on the Federal Reserve's (Fed) interest rates outlook, eventually impacting the US Dollar (USD) and the interest-rate-sensitive Gold price. Gold price remains at the mercy of US inflation data Ahead of next week's January CPI inflation report from the United States, all eyes remain on Friday's seasonally adjusted CPI revisions. The revisions are likely to emerge as the key event risks in Friday's trading, as they will help markets reprice the Fed rate cut expectations. The data will be closely scrutinized by the Fed for affirming the disinflation trend. A large upward revision to US CPI data, a year ago, triggered a big US Dollar reaction. Therefore, Gold traders are preferring to stay on the sidelines, refraining from placing any fresh directional bets on the bright metal. Additionally, Gold price is digesting the recent hawkish Fed commentary that pushed back against early rate cut bets, keeping the upside attempts in check. Richmond Fed President Thomas Barkin said Thursday that they have time to be patient on rate changes and said that he needs to see good inflation numbers being sustained and broadening. Meanwhile, another strong US government bond auction on Thursday drove the US Treasury bond yields higher across the curve, inspiring Gold sellers to retain control. However, early Friday, US Treasury bond yields came under renewed selling pressure, as fresh US-China trade tensions seem to weigh on risk sentiment while allowing Gold price to find a floor. Citing people familiar with the matter, Bloomberg reported that the Biden administration is considering an import ban on Chinese 'smart cars' and related components, in the face of mounting US concerns about data security. Looking ahead, Gold price will likely remain at the mercy of the broader market sentiment, US CPI revisions and upcoming speeches from Fed policymakers. However, the end-of-the-week flows and repositioning ahead of next Tuesday's US inflation report could trigger sharp moves in the Gold price. Gold price technical analysis: Daily chart The near-term technical outlook for Gold price remains more or less the same, with rangebound movement likely to extend before the US CPI revisions drop.   Gold price extends its struggle with the $2,030-$2,035 region. That level is the confluence of the 21-day and 50-day Simple Moving Averages (SMA). The 14-day Relative Strength Index (RSI) is trading listlessly just at the 50 level, justifying the side-trend in Gold price. Should the $2,030-$2,035 demand area guard the downside, the immediate powerful resistance for Gold price is seen at the $2,040 round level. Acceptance above the latter is needed to take on the $2,050 psychological level. The next critical resistance is envisioned at around $2,065. On the flipside, Gold sellers yearn for a daily close  below the abovementioned $2,035-$2,030 area. A breach of the last will put the $2,000 threshold at risk if the $2,010 round figure gives way.

Markets On Thursday, U.S. stock indexes remained subdued as markets paused at elevated levels, with the S&P 500 hovering just shy of the symbolic 5,000-point milestone. Investors were carefully assessing significant corporate earnings releases, secondary jobs data, and statements from policymakers regarding expectations for interest rate cuts. While it's not uncommon for markets to pause and consolidate after reaching significant levels, there's speculation that tomorrow's CPI revisions might dampen recent optimism about inflation. This could shift investor sentiment, which has been relatively resilient to the recent subtle backup in U.S. yields over the past week, considering that correlations can fly as quickly as they stick.  Indeed, even Treasuries faced challenges in gaining traction despite a robust $25 billion sale of long-term bonds, which concluded a week of increased issuance sizes.  U.S. yields continued to climb despite the successful 30-year auction, which helped alleviate concerns about oversupply, clearly indicating some caution ahead of tomorrow's CPI revisions. Yet stocks levitated near record height, driven once again by an increasingly narrower group of shares, which has analysts forever worried about concentration risk. The update of CPI seasonal adjustment factors last year was significant, revealing that inflation momentum was more substantial than previously believed at the end of 2022. This caught both the market and the Federal Reserve by surprise. On Friday, the market will be closely watching the 2023 update to see its implications for the timing of the first Fed rate cut this year. U.S. jobless claims were a non-event on Thursday. I mention them only in the context of the two prior weeks, which saw meaningful increases. The recent two-week uptick in initial jobless claims might have been another false dawn. Initial claims have consistently disappointed recession claimants, as each minor increase tends to dissipate quickly against the backdrop of the resilient underlying labour market. It only reinforces investors' awareness of the labour market's resilience, providing the Federal Open Market Committee (FOMC) with sufficient leeway to postpone any considerations of rate cuts. Oil Markets Crude oil leapt higher as Israel took hope for a ceasefire agreement off the table, triggering a wave of buying as geopolitical risk went on the boil again. Prime Minister Benjamin Netanyahu said that he sees no other solution than total victory following a counteroffer from Hamas for a ceasefire. This comes amid a military escalation against Iranian-backed " terrorist" factions by the U.S. and U.K. concerns.  Forex Markets The yen continued to weaken overnight as traders were caught off guard by Bank of Japan comments. Speculation was rife among market participants that Deputy Governor Uchida could signal that the BoJ is moving closer to raising rates as early as the next meeting in March. However, nothing could have been further from the speculative truth. He suggested that the BoJ would continue to support the JGB market through bond purchases even after Yield Curve Control (YCC) has formally been brought to an end, aiming to avoid a surge in yields. China Markets The recent macroeconomic news of China on Thursday added to the prevailing pessimism. The Consumer Price Index (CPI) print for January was worse than anticipated, with prices falling by 0.8% year-on-year, surpassing economists' expectations of a 0.5% decline and marking the weakest reading since 2009. Additionally, Producer Prices slipped by 2.5% from a year ago, reflecting ongoing factory gate deflation over the past 16 months. Consumer sentiment in China remains dismal, with many still reeling from the effects of the Shanghai lockdown. The government's response to the lockdown, now led by Premier Xi's appointed figure, has not alleviated the consumer confidence crisis. The problem extends beyond credit supply issues and is exacerbated by the lingering effects of the property crackdown. Burdened by excessive leverage, local governments face constraints in implementing meaningful fiscal stimulus measures. There is growing consensus that the central government must take decisive action, potentially including fiscal stimulus akin to helicopter money, to address China's economic challenges. Urgent action is needed to restore confidence and stimulate economic growth. If policymakers do not act decisively and quickly, they might fritter away one of the most significant economic breakthroughs ever.  

XAU/USD Current price: 2,0331.60 Government bond yields and Fed's speakers lead the way. Robust United States employment figures further undermined rate cut odds. XAU/USD volatile price action ended without providing directional clues. Spot Gold hovers around $2,030 in the American session, posting modest intraday losses on Thursday. The US Dollar remained weak during Asian trading hours, picking up some steam ahead of Wall Street's opening but holding within familiar levels. In the absence of relevant macroeconomic data, market players are taking clues from yields and central banks' speakers. The yield on the 10-year US Treasury note surged intraday to 4.16% following United States (US) employment data. The country reported that weekly unemployment claims rose to 218K in the week finished February 2, beating the 220K expected. Robust data from the labor sector further undermined the rate-cut odds in the country. Meanwhile, remarks from Federal Reserve (Fed) officials align with Chair Jerome Powell's comments following the central bank monetary policy meeting. American policymakers are confident inflation is in the right direction but maintain the cautious stance of waiting for more data to confirm it will keep trending lower. Overall, market participants are trying to digest the fact that rate cuts could be less than initially expected this year. XAU/USD short-term technical outlook XAU/USD fell to an intraday low of $2,020.08, recovering $10 afterwards, and went back to its comfort zone. The pair is technically neutral according to the daily chart, still stuck around a directionless 20 Simple Moving Average (SMA). The longer moving averages remain far below the current level, partially losing their upward strength. Finally, technical indicators have returned to consolidate around their midlines, reflecting the lack of directional conviction. For the near term, the upward potential seems limited. XAU/USD briefly dipped below all its moving averages, which anyway lack directional strength, but quickly returned to above the 20 and 100 SMAs. Technical indicators, in the meantime, turned back north but remain around neutral levels, failing to provide fresh clues. Support levels: 2,022.75 2,009.10 1,988.90 Resistance levels: 2,044.60  2,053.10 2.065.60

EUR/USD edges higher toward 1.0800 after posting marginal gains on Wednesday. The near-term technical outlook points to a bullish tilt. A significant increase in US Initial Jobless Claims could hurt the USD. EUR/USD registered small gains on Wednesday and continued to push higher toward 1.0800 early Thursday. Although the pair's near-term technical outlook highlights a bullish tilt, technical buyers could stay on the sidelines until 1.0800 is confirmed as support. Improving risk mood made it difficult for the US Dollar (USD) to find demand on Wednesday but a late recovery in US Treasury bond yields helped the currency limit its losses, capping EUR/USD's upside. Meanwhile, European Central Bank (ECB) policymakers continue to push back against market expectations for an early policy pivot and support the Euro. ECB Executive Board member Isabel Schnabel said that they must remain patient and cautious on risks of inflation flaring up again. Similarly, Governing Council member Boris Vujcic argued that they shouldn't rush to lower rates, citing resilience in services inflation and wages.

Hawkish comments from the Federal Reserve members continued to make the headlines in the US, yesterday, with Susan Collins, Thomas Barkin and a new Fed Governor Adriana Kugler, all saying the same exact thing: that there is no hurry for the US to cut the interest rates. But knowing that the Fed is done hiking its rates and the expectation that the next move from the Fed will be a rate cut is enough to keep the market in a sweet spot. The US had a record-breaking auction for its 10-year bonds yesterday, where it sold $42bn worth of notes at a lower than anticipated yield, the S&P500 renewed record and traded at a spitting distance from the 5000 psychological mark. Disney followed in the footsteps of its happy tech peers yesterday and rose almost 7% in the afterhours trading. Sentiment was less cheery in Germany after the commercial real estate stress jumped to Germany. Meanwhile in China, the CSI traded mixed after the announcement of deeper deflation in January. Alibaba missed the opportunity to break above its down-trending channel that has been building since last August as its shares dived 6% after its sales missed expectations in the latest Q4 report. 

The Chinese economy is stabilising but the only fireworks will come from the new year celebrations which begin on 11 February as momentum remains weak . Mission accomplished on 2023 GDP as growth stabilises You could say it's 'mission accomplished' as data over the past month confirms that the Chinese economy beat its 2023 GDP growth target and growth certainly stabilised. But as people celebrate the Chinese New Year, sentiment seems weak. Key activity data won't be published this month, so expect a period of calm before the much anticipated annual parliamentary gathering, the Two Sessions, in early March. China's GDP growth for the fourth quarter rose from 4.9% year-on-year to 5.2%, bringing 2023 full-year growth to 5.2% YoY, exceeding the 5% growth target set at last year's Two Sessions. China 2023 GDP growth managed to beat the 5% target Monthly indicators show few signs of growth dynamism The property sector remains the largest drag on the economy. Real estate investment slumped to -9.6% YoY at the end of 2023, while the number of buildings sold also dropped 6.5%. Secondary market property prices fell 8.9% from the peak, while 39 of the National Bureau of Statistics's 70-city sample saw a more than 10% decline from the peak. Trade is dragging on growth. Last year, the trade balance was down 3.4% YoY to USD858.6bn, while exports and imports fell 5.1% YoY and 5.6% YoY, respectively. The silver lining is that there have been some signs of a bottoming out in the past several months; December exports fell to the lowest YoY level in eight months, and imports recovered to positive YoY growth. Consumption was the main growth driver, but while month-to-month volatility has been high, retail sales growth has been trending down overall, ending the year at 7.2% YoY and has yet to reclaim pre-pandemic levels of growth despite a favourable base effect. The most encouraging sign has been a clear acceleration in credit growth. Aggregate financing had all but stagnated, growing just 1.3% YoY over the first seven months of 2023 before a shift in policy tone in August prompted a 32.2% YoY growth for the final five months of the year. China activity monitor PMI data points to a soft start to the year So, keep in mind that China bundles many January and February indicators for publication in March and, as we said, momentum remains soft. The January manufacturing PMI came in at 49.2, and that was slightly below expectations. But it did trend in the right direction with a smaller contraction than in December. The Chinese manufacturing sector remains under pressure amid a weak domestic recovery and poor external demand. The manufacturing PMI has been under 50 for nine of the past ten months. Sub-indices pointed to a small recovery in new orders but further deterioration of employment. China PMI showed manufacturing remains in contraction Policy direction remains supportive to start the year Growth stabilisation has been the key theme for policymakers in the last few months, and we saw many piecemeal supportive policies released both on a provincial and national level. Some of the highlights include discussions of a market stabilisation fund, as well as the continued rollout of property market policies such as city-level project whitelists. While the People's Bank of China (PBOC) refrained from cutting rates in January, it did announce a 50bp cut in the required reserve ratio (RRR) to take effect from 5 February. The cut was the largest since 2021 and provides, in theory, up to RMB1tn of liquidity to markets. The PBOC also broadened access to commercial loans for property developers by allowing bank loans pledged against developers' commercial properties to be used to repay other loans and bonds until the end of the year. It also cut the refinancing and rediscount rates for rural and micro-loans by 0.25 basis points to 1.75%. Largest RRR cut since 2021 may be a signal of more policy support to come Markets await the Two Sessions to set the tone for 2024 Soon after the Lunar New Year, the Chinese government will hold its annual Two Sessions, which refers to the plenary sessions of the National People's Congress (NPC) and the Chinese People's Political Consultative Conference (CPPCC). The Two Sessions are typically the most important policy meetings of the year, and will start on 4-5 March. This year, there is a higher-than-usual level of uncertainty as the Third Plenary Session (traditionally a fourth-quarter meeting where the economy is the main focus and various reforms and new measures are announced) was postponed. As such, the Two Sessions meetings will be highly scrutinised for any new policy signals. Regarding economic targets, we feel it is unlikely we will see major movements here. Premier Li Qiang's comments at Davos and the provincial-level 2024 GDP targets indicate...

Gold price is stuck in a familiar range between $2,030 and $2,040 early Thursday. Risk-on rally in global stocks weighs on the US Dollar amid subdued US Treasury bond yields.   The path of least resistance for Gold price appears to the upside but $2,050 holds the key. Gold price is finding buyers early Thursday to take on the $2,040 barrier once again, having failed to resist above the same since last Friday. Gold price is capitalizing on the risk-on sentiment-driven US Dollar (USD) weakness while sluggish US Treasury bond yields also remain supportive. All eyes remain on mid-tier US jobs data and more Fedspeak The US Dollar is extending its downbeat momentum into Asian trading on Thursday, undermined by muted US Treasury bond yields and a risk rally seen on global markets. Asian stocks track the US equities higher, as the S&P 500 index closed at a record high, courtesy of strong earnings and increased expectations of a 'soft-landing' for the US economy. Markets also stay cheerful on expectations that more policy support measures from China could come through, as the country continues to battle deflation. China's prices fell at the fastest pace in 15 years, reflected by the 0.8% decline in the Consumer Price Index (CPI). China's Producer Price Index (PPI) fell 2.5% from a year earlier in January after a 2.7% decrease reported in the previous month. Gold price is also capitalizing on China's stimulus optimism, as the dragon nation is the world's top consumer of the yellow metal. However, traders are expected to take account of the recent less dovish commentary from the US Federal Reserve (Fed) policymakers, limiting the upside attempts in the Gold price. Boston Fed President Susan Collins said on Wednesday, "for the moment, policy remains well positioned, as we carefully assess the evolving data and outlook," adding it will be "appropriate to begin easing policy restraint later this year." Richmond Fed President Thomas Barkin, "I am very supportive of being patient to get to where we need to get. There's still a reasonable amount of uncertainty" on inflation. Meanwhile, "sitting here today I would say two to three cuts would seem to be appropriate for me right now...that's my gut based on the data we have so far," Minneapolis Fed President Neel Kashkari said in an interview with broadcaster CNBC. Later in the day, Gold traders will brace for more Fedspeak, with Barkin set to speak again. Also, the US weekly Jobless Claims data will be closely watched after the Initial Jobless Claims increased to a seasonally adjusted 224,000 for the week ended Jan. 27. The Fed commentary and the US data could help markets repricing the Fed rate cut bets for this year, providing a fresh trading impetus to Gold price. Gold price technical analysis: Daily chart As observed on the daily chart, Gold price continues its battle with the $2,030-$2,035 region. That level is the confluence of the 21-day and 50-day Simple Moving Averages (SMA). The 14-day Relative Strength Index (RSI) is trading listlessly just at the 50 level, pointing to a further rangebound movement in Gold price. If Gold price holds the fort above the $2,030-$2,035 demand area, the immediate powerful resistance for Gold price is seen at the $2,050 psychological level. The next critical supply zone for the bright metal is seen at around $2,065. To the downside, Gold sellers need to seek a decisive close  below the abovementioned $2,035-$2,030 area. Further down, a test of the $2,000 threshold if the $2,010 round figure gives way.