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Americas Roundup: Dollar edges up after slide to 3-year lows, euro, pound broadly down, Wall Street slides, Oil dips but set for biggest January rise in five years-January 30th, 2018

Market Roundup


• US Dec Core PCE Price Index MM, 0.2%, 0.2% forecast, 0.1% previous.

• US Dec Core PCE Price Index YY, 1.5%, 1.5% forecast, 1.5% previous.

• US Dec PCE Price Index MM, 0.1%, 0.2% previous.

• US Dec PCE Price Index YY, 1.7%, 1.8% previous.

• US Dec Personal Consump Real MM, 0.3%, 0.4% previous.

• US Dec Personal Income MM, 0.4%, 0.3% forecast, 0.3% previous.

• US Dec Consumption, Adjusted MM, 0.4%, 0.4% forecast, 0.6% previous, 0.8% revised.

• US Dec Dallas Fed PCE, 1.8%, 2.2% previous, 2.1% revised.

• US Jan Dallas Fed Mfg Bus Index, 33.40, 29.70 previous.

• U.S. FBI No. 2 official McCabe steps down amid Trump criticism –source.

• Trump team idea to nationalize 5G network to counter China is rejected.

• U.S. to implement security upgrades to refugee program.

• EU offers Brexit transition, but UK must "accept rules".

• ECB will only stop pumping out cash when confident about inflation – Praet.

• German govt raises 2018 growth forecast to 2.4 pct – sources.

• Merkel's embrace splits German Social Democrats over party identity.

• Italy's 5-Star presents "super-competent" candidates for election.

• NAFTA negotiators still divided, but cite progress in talks.

Looking Ahead - Economic Data (GMT)

• 29 Jan 21:45 Australia Dec Trade Balance, -1,193.0M previous

• 29 Jan 21:45 Australia Dec Trade Balance YY, -3.44B previous

• 29 Jan 23:30 Japan Dec All Household Spending YY, 1.7% forecast, 1.7% previous

• 29 Jan 23:30 Japan Dec All Household Spending MM, -0.6% forecast, 2.1% previous

• 29 Jan 23:30 Japan Dec Jobs/Applicants Ratio, 1.57 forecast, 1.56 previous

• 29 Jan 23:30 Japan Dec Unemployment Rate, 2.7% forecast, 2.7% previous

• 29 Jan 23:30 Japan Dec Retail Sales YY, 1.8% forecast, 2.2% previous

• 29 Jan 00:30 Australia Dec NAB Business Conditions, 12 previous

• 30 Jan 00:30 Australia Dec NAB Business Confidence, 6 previous

Looking Ahead - Events, Other Releases (GMT)

• N/A U.S. Federal Reserve's Federal Open Market Committee (FOMC) starts its two-day meeting on interest rates (to Jan. 31) - Washington

• 11:00 ECB policymaker Francois Villeroy de Galhau speaks at a Fintech conference in Paris - Paris

• 16:00 French Finance Minister Bruno Le Maire, Belgium Finance Minister Johan Van Overtveldt, Lithuania Finance Minister Vilius Sapoka and Luxembourg Finance Minister Pierre Gramegna speak at a fintech conference in Paris - Paris

• 15:30 Bank of England's Mark Carney makes an annual appearance before the House of Lords Economic Affairs Committee - London

• 16:30 ECB's Yves Mersch speaks at the Goethe University - Frankfurt

Currency Summaries

EUR/USD is likely to find support at 1.2291 levels and currently trading at 1.2378 levels. The pair has made session high at 1.2395 and hit lows at 1.2330 levels. The euro declined against US dollar on Monday as dollar rose against a basket of currencies as U.S. bond yields climbed and traders waited for a Federal Reserve meeting and a U.S. jobs report later in the week. Treasury Secretary Steven Mnuchin gave U.S. currency bears a major boost last week with a tacit endorsement of a weak dollar. While U.S. President Donald Trump, who has advocated a strong dollar, tried to minimize those comments, the remarks had already made an impact and the greenback's downturn since November showed little sign of abating.U.S. Treasury yields surged to more than three-year highs on Monday after comments from a European Central Bank official added to expectations that central banks globally will reduce stimulus as the economic outlook improves. The 10-year yield rose to 2.71 percent, its highest since early 2014. . On the data front, U.S. consumer spending rose solidly in December as demand for goods and services increased, but the gain came at the expense of savings, which dropped to a 10-year low in a troubling sign for future consumption and economic growth. Traders are awaiting a U.S. Department of Labor report, set to be released on Friday that will include data on nonfarm payrolls, average hourly earnings and the unemployment rate. The dollar rose 0.33 percent against a basket of currencies, while the euro was down 0.27 percent at $1.2377.

GBP/USD is supported in the range of 1.3900 levels and currently trading at 1.4068 levels. It reached session high at 1.4119 and dropped to session low at 1.4021 levels. Sterling declined against the dollar on Monday as new concerns over Prime Minister Theresa May's ability to advance her plans for Brexit encouraged traders to take profits after a recent surge. The pound is up about 4 percent so far this year, as investors expect Britain and the European Union to agree a transition deal soon for the UK's exit from the bloc. But analysts said investors seized on negative headlines on Monday to cut their long positions on the British currency. The House of Lords Constitution Committee said on Monday that May's legislation to end Britain's EU membership had "fundamental flaws". That followed reports at the end of last week that May was facing another leadership challenge. Britain is due to exit the EU on March 29, 2019, but there are deep divisions inside the government and within May's Conservative party about what sort of relationship should replace 46 years of membership. Until now, however, those divisions have not appeared to rattle investors, with the currency surging against both the dollar and on a trade-weighted basis since the end of last year. Data on Friday showed speculators added to their bets on the pound strengthening further in the most recent week, with net-long positions at their highest since mid-2014. On Monday, however, sterling skidded 0.8 percent to as weak as $1.4030, hitting five-day lows after Theresa May's spokesman said there was some distance between the EU and Britain on more than one transitional deal issue.

USD/CAD is supported at 1.2280 levels and is trading at 1.2339 levels. It has made session high at 1.2546 and lows at 1.2463 levels. The Canadian dollar was little changed against its U.S. counterpart on Monday as oil prices fell and the greenback climbed, while investors turned their attention to NAFTA renegotiations. U.S. President Donald Trump's trade chief on Monday dismissed Canadian proposals for unblocking NAFTA modernization talks but pledged to stay at the table, easing concerns about a potentially imminent U.S. withdrawal from the trilateral pact. U.S. Trade Representative Robert Lighthizer said after a sixth round of NAFTA modernization talks in Montreal that Trump's views on the pact are unchanged, and cautioned that talks are still moving too slowly on U.S. priorities. Critical comments by Trump, Lighthizer and others have unsettled markets that fret about the potential damage to a highly integrated North American economy if the United States gives six months' notice it is leaving. Negotiators are supposed to finish in Washington in March with the eighth and final round. Oil prices slipped 1.5 percent, pressured by a strengthening dollar and rising U.S. crude output, but prices remained on track for the biggest January increase in five years. The Canadian dollar was last trading 0.2 percent lower at C$1.2334 to the greenback, or 81.08 U.S. cents. The currency traded in a range of C$1.2306 to C$1.2355. On Thursday, it touched its strongest in more than four months at C$1.2283.

AUD/USD is supported around 0.8039 levels and currently trading at 0.8091 levels. It hit session high at 0.8107 and made session lows at 0.8072 levels. The Australian dollar eased against its U.S. counterpart on Monday as speculators booked some profits on short U.S. dollar positions while bracing for a key report on domestic inflation later in the week. The local currency has been underpinned by broad weakness in its U.S. counterpart, strength in global growth and commodity prices and a run of improving data domestically. Yet its ascent will also put downward pressure on import prices and inflation, a trend that is unlikely to be welcomed by the Reserve Bank of Australia (RBA).Consumer price figures for the December quarter, due on Wednesday, are expected to show underlying inflation remained stuck below the floor of the RBA's 2-3 percent target for two years straight. Investors suspect risks are for a softer result given Q4 CPI data from New Zealand showed price pressures in tradable goods and services were surprisingly weak. Investors already assume the RBA will be in no rush to tighten, with a hike implied as a 50-50 chance for August. Yet a move is fully priced in by November. The Aussie dollar was down 0.26 percent at $0.8091, having stretched as far as $0.8136 on Friday. That was its highest since May 2015 and cleared a double top from September at $0.8105 and $0.8125.

Equities Recap

Heavy losses in utility after a profit warning and other disappointing company updates weighed on European shares on Monday, pushing the pan-European benchmark to its lowest level since end-September.

The UK's benchmark FTSE 100 closed up by 0.1 percent, FTSEurofirst 300 ended the day down by 0.19 percent, Germany's Dax ended down by 0.2 percent, and France’s CAC finished the down by 0.1 percent.

Wall Street pulled back from record highs on Monday with the S&P 500 marking its biggest one-day percentage decline in about five months, weighed down by a slide in Apple shares.

Dow Jones closed down by 0.68 percent, S&P 500 ended down 0.69 percent, Nasdaq finished the day up by 0.54 percent.

Treasuries Recap

U.S. Treasury yields surged to more than three-year highs on Monday after comments from a European Central Bank official added to expectations that central banks globally will reduce stimulus as the economic outlook improves.

Ten-year note yields reached a peak of 2.727 percent, the highest since April 2014. The notes were last down 11/32 in price to yield 2.701 percent.

Commodities Recap

Gold prices fell on Monday as a recovery in the U.S. dollar and rising government bond yields prompted investors to cash in bullion after its sixth weekly price rise in seven weeks.

Spot gold was down 0.5 percent at $1,342.56 an ounce by 2:05 p.m. EST (1905 GMT), while U.S. gold futures for February delivery settled down $11.80, or 0.9 percent, at $1,340.30.

Oil prices settled lower on Monday, pressured by a strengthening dollar and rising U.S. crude output, but prices remained on track for the biggest January increase in five years.

Brent crude futures for March delivery settled down $1.06, or 1.5 percent, at $69.46 a barrel, after rallying to a session high of $70.64.

U.S. West Texas Intermediate (WTI) crude futures fell 58 cents, or 0.9 percent, to close at $65.56 a barrel.


 

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November 19 11:30 UTC Released

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