CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an account
✖

European Open: Yields continue higher overnight, futures point lower

Article By: ,  Market Analyst
January 19, 2022 7:39 AM

Asian Indices:

  • Australia's ASX 200 index fell by -76.3 points (-1.03%) and currently trades at 7,332.50
  • Japan's Nikkei 225 index has fallen by -790.02 points (-0.28%) and currently trades at 27,467.23
  • Hong Kong's Hang Seng index has fallen by -93.26 points (-0.39%) and currently trades at 24,019.52
  • China's A50 Index has fallen by -113.61 points (-0.74%) and currently trades at 15,183.66

UK and Europe:

  • UK's FTSE 100 futures are currently down -33 points (-0.44%), the cash market is currently estimated to open at 7,530.55
  • Euro STOXX 50 futures are currently down -24.5 points (-0.58%), the cash market is currently estimated to open at 4,233.32
  • Germany's DAX futures are currently down -77 points (-0.49%), the cash market is currently estimated to open at 15,695.56

US Futures:

  • DJI futures are currently down -156 points (-0.44%)
  • S&P 500 futures are currently down -103.5 points (-0.68%)
  • Nasdaq 100 futures are currently down -24.5 points (-0.54%)

Asian equities were lower overnight as upside pressure on global bond yields persisted. The Australian 2-year bond rose 16 basis points to a two-year high, whilst the 5-year rose 23 bps. The Nikkei bared the brunt of selling as it fell -3%, taking a leaf from Nasdaq’s bearish book which fell -2.7% yesterday. China’s CSI300 and Australia’s ASX 200 were down around -1%.

The yen caught a late-session bid

Currency markets were mostly quiet despite weak sentient for equities, yet in the past hour we’ve seen the Japanese yet move broadly higher against its forex major peers. USD/JPY has broken beneath yesterday’s lows and EUR/JPY broke key support.

UK inflation data is at 07:00 GMT

UK inflation rose to 5% according to December’s report which piled even more pressure on the BOE to raise rates. At the time, it was still unclear whether Omicron would derail the economy and the potential for the BOE to hike rates, yet the market have since decided all is fine and driven the British pound to a five-week high, as of last week during a short-covering rally. Unless we see some notably weak inflation numbers today (which we very much doubt) then the BOE are likely to be forced to hike rates in the coming weeks. Yet what is driving the pound lower this week is the markets renewed appetite for the dollar thanks to a hawkish Fed and bond-market sell-off.

EUR/GBP probes cycle low

A large bearish engulfing candle formed on the daily chart of EUR/GBP yesterday. Yield differentials between the two regions points to a downside break and trader have tried to push hit lower overnight. Yet we are urging caution at these lows given potential support levels nearby which diminish the potential reward/risk. The weekly S1 pivot sits at 0.8320, the monthly S1 at 0.8312 and historical support at 0.8304 (not to mention 0.8300 being a round number).

Of course, another potential catalyst is the ousting of Boris Johnson. But he was to be “out by Christmas” yet still clings on to power. And should he last the week it may even give the pound another boost.

GBP/CAD in focus for Canadian inflation

Just after lunch at 13:30 Canada will release their inflation report. Given the UK release theirs earlier in the day and GBP/CAD sits below a key resistance level, GBP/CAD is of interest. The daily chart has produced a head and shoulders top pattern which projects a target around 1.6823 and remains in play, so long as prices stay below the 1.7065 neckline.

However, and alternative scenario is a countertrend rally within a bearish channel. A Doji and bullish hammer have formed on this timeframe so if we see momentum turn higher then a swing low has formed. Yet a minor rally from current levels (and respect of 1.0765 resistance) suggests the H&S top is in play.

FTSE 350: Market Internals

FTSE 350: 4287.22 (-0.68%), 19 January 2022

  • 14 stocks rose to a new 52-week high, 20 fell to new lows
  • 89 (25.36%) stocks advanced, 250 (71.23%) stocks declined

Outperformers:

  • +8.237% - Just Group PLC (JUSTJ.L)
  • +6.869% - Qinetiq Group PLC (QQ.L)
  • +4.985% - Darktrace PLC (DARK.L)

Underperformers:

  • ·-11.5% - Petropavlovsk PLC (POG.L)
  • ·-8.07% - Trustpilot Group PLC (TRST.L)
  • ·-7.583% - Chrysalis Investments Ltd (CHRY.L)

Up Next (Times in GMT)

 

 

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

© FOREX.COM 2025