Market Roundup
• Russia Dec Interest Rate Decision 4.25%,4.25% forecast, 4.25% previous
• UK Dec CBI Industrial Trends Orders -25, -34 forecast, -40 previous
• US Current Account (Q3) -178.5B, -189.0B forecast, -170.5B previous
• Canada Oct Retail Sales (MoM ) 0.4%,0.2% forecast, 1.1% previous
•Canada Oct Core Retail Sales (MoM) 0.0%, 0.2% forecast, 1.0% previous
•14:00 Belgium Dec NBB Business Climate -8.4k,-13.4 forecast, -12.1 previous
•15:00 US Nov Leading Index (MoM) 0.6%,0.5% forecast, 0.7% previous
•16:00 Russian Real Wage Growth (YoY) 0.5%, 1.0% forecast, 2.2% previous
•Canada Oct Budget Balance (YoY) -18.51B, -198.11B previous
•Canada Oct Budget Balance -216.62B -27.59B previous
•18:00 US U.S. Baker Hughes Oil Rig Count 346 , 258 previous
Looking Ahead - Events, Other Releases (GMT)
•No significant data
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro strengthened against dollar on Friday after survey showed German business morale rose unexpectedly in December. High demand for industrial goods, brighter export expectations and government support for companies hit by lockdowns to slow the spread of the coronavirus contributed to an unexpected rise in German business morale in December. The Ifo institute said its business climate index rose to 92.1 from an upwardly revised reading of 90.9 in November. The euro traded at $1.2260, having hit a two-and-a-half-year high of $1.2273 on Thursday. Immediate resistance can be seen at 1.2272(23.6% fib), an upside break can trigger rise towards 1.2300 (Psychological level).On the downside, immediate support is seen at 1.2239 (Daily low), a break below could take the pair towards 1.2200 (5DMA).
GBP/USD: The British pound fell on Friday, reversing some of its recent gains, as EU chief negotiator Michel Barnier warned that there were just hours left to reach a Brexit trade deal with London. Market confidence has risen sharply this week that the two sides will clinch a deal, which would ensure that the goods trade which makes up half of annual EU-UK trade would remain free of tariffs and quotas beyond Dec. 31.The pound hit 2-1/2 yeah highs above $1.36 on Thursday, but Friday’s trading session served as a reminder that a deal is far from guaranteed. Immediate resistance can be seen at 1.3549 (38.2%fib), an upside break can trigger rise towards 1.3604 (23.6%fib).On the downside, immediate support is seen at 1.3495 (50%fib), a break below could take the pair towards 1.3446 (61.8%fib).
USD/CAD: The Canadian dollar weakened to an eight-day low against the greenback as investors weighed prospects of U.S. coronavirus relief and domestic data showed fading retail sales momentum, with traders booking some profit in the currency after a recent run higher. The loonie was trading 0.5% lower at 1.2789 to the greenback, or 78.19 U.S. cents, having hit its weakest intraday level since Dec. 10 at 1.2798. On Tuesday, the loonie notched a 2-1/2-year high at 1.2684. The currency's subsequent pullback left it down 0.1% for the week, its first decline in five weeks. Immediate resistance can be seen at 1.2800(50%fib), an upside break can trigger rise towards 1.2847 (Daily high).On the downside, immediate support is seen at 1.2747 (38.2%fib), a break below could take the pair towards 1.2700 (23.6%fib).
USD/JPY: The dollar strengthened against the Japanese yen on Friday after Bank of Japan extended its aid scheme for corporate lending and kept other policy settings steady, as expected. The Bank of Japan on Friday unveiled a plan to examine more effective ways to achieve its 2% inflation target, following in the foot steps of its U.S. and European peers as a renewed spike in infections threatened to derail a fragile recovery. In a surprise move, the BOJ said it will look at ways to make its policy “more effective and sustainable,” as the blow to growth from the pandemic pushes inflation further away from its target and forces it to maintain its massive stimulus longer.Strong resistance can be seen at 103.16 (38.2%fib), an upside break can trigger rise towards 103.29 (61.8%fib).On the downside, immediate support is seen at 103.05 (38.2%fib), a break below could take the pair towards 102.91 (23.6%fib).
Equities Recap
European shares fell on Friday as doubts over a post-Brexit trade deal and a stimulus package in the United States capped gains at the end of a solid week.
UK's benchmark FTSE 100 closed down by 0.33 percent, Germany's Dax ended down by 0.27 percent, France’s CAC finished the day down by 0.39 percent.
U.S. stocks ended lower on Friday, pulled down by uncertainty around a coronavirus stimulus deal, while Tesla shares hit a lifetime high in anticipation of their addition to the S&P 500 next week.
Dow Jones closed down by 0.41 percent, S&P 500 closed down by 0.35 percent, Nasdaq settled down by 0.07% percent.
Treasuries Recap
The Treasury yield curve steepened on Friday to its highest since February 2018 as investors waited to see whether the U.S. Congress would agree on $900 billion in fresh COVID-19 relief by the end of the day.
The 10-year yield was last up 1.3 basis points at 0.943%. The 30-year yield rose 1.8 basis points to 1.693%. The short end of the curve dipped, with the two-year yield last down 0.4 basis point at 0.123%.
Commodities Recap
Oil settled up at a nine-month high on Friday, rounding out seven straight weeks of gains as investors focused on the rollout of COVID-19 vaccines and a decline this week in the U.S. dollar
Brent crude settled up 76 cents, or 1.5%, to $52.26 a barrel after touching $52.48, its highest since March. U.S. West Texas Intermediate (WTI) crude settled up 74 cents, or 1.5%, to $49.10 after reaching $49.28, its highest since February.
Gold prices retreated on Friday as the dollar rebounded, but were still on track for a third straight weekly gain after a recent rally driven by progress on a U.S. stimulus deal.
Spot gold dipped 0.3% to $1,880.46 per ounce by 0724 GMT. For the week, it was up 2.3%. U.S. gold futures fell 0.2% to $1,886.30 per ounce.
