Yesterday’s trading saw relatively constrained trading ranges, with the low to high ranges starting the week on a subdued note. Despite this, the euro (EUR) emerged as the strongest major currency by the end of the day as the ECB tried to push back on rate cut expectations.

Christine Lagarde, President of the European Central Bank (ECB), provided insights into the current economic conditions and inflation outlook. Lagarde noted signs of economic growth bottoming out, with some forward-looking indicators suggesting a potential rebound later in the year. However, she also highlighted inflation as a significant concern, indicating the ECB’s focus on addressing inflationary pressures.

In terms of economic data, the US New Home Sales annualized figure came in weaker than expected at 0.661 million, compared to estimates of 0.680 million and down from the previous month’s figure of 0.664 million. Additionally, the US Treasury conducted auctions for 2 and 5-year notes, with demand ranging from average to below average. Another auction for 7-year notes is scheduled for the following day. Oil prices experienced an upward trend, with crude oil trading $1.20 higher, or 1.50%, at $77.60 per barrel.

Today’s Market Expectations

The day begins with the release of the Japanese inflation report. Core CPI Y/Y is projected to fall 5 points to 1.9% in January, from 2.3% previously, with the prior headline CPI YoY printing at 2.6% and the Core-Core CPI Y/Y coming in at 3.7%. The Tokyo CPI, which is seen as a leading indicator of national inflation, was recently startled by decreasing significantly more than expected, with almost all indicators falling below the BoJ’s 2% objective, which should continue this month as well. So the Bank of Japan will not likely move interest rates, and even if they decide to exit the negative rate policy, it appears that it will be a one-time event.

The US durable goods will highlight the day, and they are expected to show a major decline in headline orders. Durable goods orders are expected to show a 4.7% decline in January, after falling flat at 0.0% in December. However, core orders are expected to show a 0.2% increase, which wouldn’t be so bad.

The CB consumer confidence report will close the day. The recent increase in confidence indicates growing optimism among consumers. The existing situation indicator, which measures consumers’ perception of the current employment market, saw a significant jump in the last reading. This could potentially point to the strong January Non-Farm Payrolls (NFP) data released a week later. the upcoming February reading, the consensus among analysts anticipates that the Consumer Confidence index will remain unchanged at 114.8.

Ethereum Slips Below the $3,000 Level

Ethereum also experienced a notable surge in value yesterday, with the price of ETH/USD above the $3,000 mark, but there was a subsequent dip below this level last week. However, yesterday’s strong bullish momentum sent the price surging higher, which shows that buyers are still exerting control in the market.

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