Daily Market Outlook - Friday, Feb. 7 -

Daily Market Outlook – Friday, Feb. 7

Feb 07, 2025Jeremy ParkinsonFinance, No picture0

Image Source: Unsplash
European and US stock futures remain rangebound as investors exercise caution ahead of the US jobs report, which is expected to provide insights into the direction of interest rates in the US. Outperformance in mainland China supported Asian stocks on Friday, with the Hong Kong technology stock index is poised to enter a technical bull market. Treasuries remained stable following slight declines across the curve on Thursday. The Dollar index remains under pressure. The mixed signals from markets reflect a lack of clear direction before the upcoming US nonfarm payroll data, which will be released later on Friday and may shift traders’ focus from the tariff concerns that rattled financial markets earlier this week. The Yen weakened against the Dollar, poised for its first decline in five sessions. Japan’s Prime Minister Ishiba is scheduled to meet with Trump on Friday, markets are wary of the next Trump media or Truth Social storm after his announcement this week regarding the Middle East Riviera ambitions.The UK Bank Rate was cut by 25bps to 4.5% on Wednesday. The two-year CPI projection rose to 2.3% for Q1 2027, economic supply growth weakened, and the neutral rate increased. Despite these hawkish signals, the 7-2 vote favoured a 25bps cut, with two dissenters pushing for 50bps. Mann’s shift from hawk to supporting a 50bps cut hints at a more aggressive stance. While cuts are expected to remain gradual, potentially alternating meetings, March could see four votes for a cut. May remains the likely timing for the next reduction.Stateside, the unexpected drop in job openings in December has raised questions about the strength of the US labour market. However, this concern seems inconsistent with other employment indicators, including low jobless claims, the strong ADP report released on Wednesday, and various surveys. Even manufacturers remain optimistic, particularly about their hiring plans. While President Trump’s assertive policy approach has faced criticism from some, his America First agenda appears to resonate positively within domestic markets. Considering the underlying momentum, the median payroll estimate of 170k seems conservative, especially when accounting for a potential slowdown in government hiring and a slight dip in production. Potential risks could arise from annual revisions, which include updates to population estimates, adjustments to benchmark processes, and seasonal recalibrations. For example, mid-year revisions through March 2024 previously revealed an 818k reduction in hiring; if this trend continues, it could decrease the total job count for the year by 800k to 1 million. Adjusted population data might also cause a slight increase in the unemployment rate. Nonetheless, such recalibrations should not provoke excessive concern. The focus should remain on the current positive trends and the strong demand evident at the year’s end.
Overnight Newswire Updates of Note

German ‘Debt Brake’ Reform May Rattle Global Bond Markets

ECB To Face Personnel Shakeup Since 2019 This Year

BoE’s Bailey: US Banks Tell Me They Want Basel Implemented

Bessent’s Focus On 10Y US Treasury Yield May Let Fed Off The Hook

Chinese Tech Stocks Near Technical Bull Market On DeepSeek Hype

Xiaomi Hits Fresh Record High On China’s Subsidy Program Boost

Japan’s Household Spending Beats; Fuels Case For BoJ Hikes

Energy, Defense Stocks In Focus In Tokyo As Ishiba To Meet Trump

Investors To Take A ‘Countertrend’ Stocks Right Now, K. Stockton Says

Amazon Slips After Sales Outlook Misses Expectations

L’Oreal Quarterly Sales Grow At Slowest Since The Pandemic

Apple’s Long-Awaited Overhaul of iPhone SE Nears Release

(Sourced from reliable financial news outlets)
FX Options Expiries For 10am New York Cut (1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

EUR/USD: 1.0300-10 (1.5BLN), 1.0325-35 (1.23BLN)

1.0350 (814M), 1.0375-85 (1.53BLN), 1.0400-10 (2.83BLN)

1.0415 (417M)

USD/JPY: 150.35-45 (400M), 150.60 (210M), 151.00 (606M)

151.90-00 (355M), 152.25 (245M), 153.00 (787M)

153.50 (1.24BLN), 154.00 (748M). EUR/JPY: 160.00 (300M)

AUD/JPY: 98.00 (327M). USD/CHF: 0.9160 (485M)

EUR/GBP: 0.8320-30 (410M), 0.8390-00 (500M)

GBP/USD: 1.2300 (1.0BLN), 1.2350 (560M), 1.2420 (210M)

1.2450 (300M)

AUD/USD: 0.6100 (495M), 0.6200 (802M), 0.6275-80 (671M)

0.6300 (479M)

USD/CAD: 1.4250 (867M), 1.4300-10 (2.0BLN), 1.4325-35 (1.71BLN)

1.4350-55 (1.3BLN), 1.4360-65 (1.2BLN), 1.4370-75 (2.35BLN)

CFTC Data As Of 31/1/25

According to the CFTC positions report for the week ended January 28th, the British pound had a net short position of -21,672 contracts, while the euro had a net short position of -66,604 contracts. The Swiss franc showed a net short position of -43,000 contracts, while the Japanese yen had a net short position of -959 contracts.

In the cryptocurrency space, Bitcoin demonstrated a net long position of 1165 contracts.

On the equity fund side, CME net short positions for the S&P 500 increased by 3,073 contracts to 402,829, while CME net long positions surged by 29,242 contracts to 961,171.

Speculators trimmed the CBOT US 5-year Treasury futures net short position by 20,136 contracts to 1,776,055 contracts, while increasing CBOT US 10-year Treasury futures net short position by 120,397 contracts to 700,642 contracts. Moreover, speculators raised the CBOT US 2-year Treasury futures net short position by 27,182 contracts to 1,201,559 contracts and the CBOT US Ultrabond Treasury futures net short position by 11,604 contracts to 241,592 contracts.

In contrast, speculators raised the CBOT US Treasury bonds futures net long position by 4,128 contracts to 28,584 contracts. These position reports provide insights into market sentiments and trends, pointing towards potential future developments and opportunities in different market segments.

Technical & Trade ViewsSP500 Pivot 6040

Daily VWAP bullish

Weekly VWAP bullish

Seasonality suggests bullishness Into Feb 6th

Long above 6075 target 6195

Short Below 6045 target 5743

EURUSD Pivot 1.0435