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America’s Roundup: Dollar index languishing near 2-1/2-year low ,Wall Street ends higher, Gold gains, Oil prices jump 5% on OPEC+ output talks, Iran tension-January 6th,2020

Market Roundup

•Canadian Nov IPPI (MoM)  -0.6% , -0.4% previous

•Canadian Nov IPPI (YoY)  0.0%, 0.7% previous

•Canadian Nov RMPI (YoY) -1.7% ,-0.3% previous

•Canadian Nov RMPI (MoM)  0.6% ,0.5% previous

•US Redbook (YoY) 5.5%,8.9% previous

•US Redbook (MoM) 0.5%,0.4% previous

• US Dec ISM Manufacturing PMI 60.7, 56.6 forecast, 57.5 previous

• US Dec ISM Manufacturing Prices 77.6,  65.7 forecast, 65.4 previous

• US Dec ISM Manufacturing Employment 51.5, 48.4 previous

• US Dec ISM Manufacturing New Orders Index 67.9, 65.1 previous

Looking Ahead - Economic Data (GMT) 

• 03:30 Australia Services PMI    52.9 previous

•06:00   Japan Dec Services PMI  47.2, 47.8 previous

Looking Ahead - Events, Other Releases (GMT)      

• No significant events

Currency Summaries

EUR/USD: The euro edged higher against dollar on Tuesday as investors were keen to bet on a powerful combination of European Central Bank bond-buying and the European Union’s recovery fund propped up the euro. Combination of ECB bond-buying and the EU recovery fund, which is seen as limiting the economic fallout from COVID-19 in the hardest-hit European countries, such as Italy, gave investors an incentive to buy euro zone government bonds .Immediate resistance can be seen at 1.2289 (Daily high), an upside break can trigger rise towards 1.2307 (23.6%fib).On the downside, immediate support is seen at 1.2243 (5EMA), a break below could take the pair towards 1.2208 (38.2%fib).

GBP/USD: The British pound steadied on Tuesday but held well below a more than 2-1/2 year high of $1.37 hit in the previous session as a new lockdown deflated post Brexit-deal optimism. Prime Minister Boris Johnson ordered England into a new national lockdown to contain a surge in COVID-19 cases that threatens to overwhelm parts of the health system before a vaccine programme reaches a critical mass.The new measures which could cost about 10% of economic output for as long as they last, according to some analysts, deflated any lingering bullishness around the British currency and sent it tumbling 1% from the May 2018 highs. Immediate resistance can be seen at 1.3611 (38.2%fib), an upside break can trigger rise towards 1.3686 (23.6%fib).On the downside, immediate support is seen at 1.3547 (50%fib), a break below could take the pair towards 1.3481 (61.8%fib).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Tuesday as oil rallied and the greenback fell against a basket of major currencies, but gains for the loonie were capped as investors weighed prospects for U.S. Senate runoff elections. The price of oil, one of Canada's major exports, rose as tension simmered following Iran's seizure of a South Korean vessel and as the OPEC+ group studied a possible production cut in February. The Canadian dollar was trading 0.2% higher at 1.2755 to the greenback. The currency traded in a range of 1.2730 to 1.2791. Immediate resistance can be seen at 1.2737 (38.2%fib), an upside break can trigger rise towards 1.2798 (50%fib).On the downside, immediate support is seen at 1.2651(23.6%fib), a break below could take the pair towards 1.2626(Lower BB).

USD/JPY: The dollar declined against the Japanese yen on Tuesday as dollar struggled  amid new COVID lockdowns in Europe and Senate runoff races in Georgia that will affect incoming U.S. President Joe Biden’s ability to pursue his preferred economic policies. Markets were watching to see whether Tuesday’s Georgia run-off election enable the Democrats to flip both Senate seats and disrupt what markets view as a delicate political balance in Washington. Strong resistance can be seen at 102.89 (38.2%fib), an upside break can trigger rise towards 103.09 (50%fib).On the downside, immediate support is seen at 102.61  (Lower BB), a break below could take the pair towards 102.00  (Psychological level).

Equities Recap

European stocks slipped on Tuesday as losses in defensive sectors offset gains in oil and retail stocks, while investors looked past a new national lockdown in Britain to curb a surge in coronavirus cases.

UK's benchmark FTSE 100 closed up by 0.61 percent, Germany's Dax ended down by 0.55 percent, France’s CAC finished the day down by 0.44 percent.

Shares on Wall Street ended higher on Tuesday in choppy trading, as investors took advantage of the previous session’s slump to buy them back, ahead of the outcome of the Senate runoff elections in the battleground state of Georgia, which will determine the balance of power in Washington.

Dow Jones  closed up by 0.55 percent, S&P 500 closed  up by 0.71 percent, Nasdaq was settled  up by 0.95 percent.

Treasuries Recap

Longer-term U.S. Treasury yields shot higher and the yield curve steepened on Tuesday as the market awaited the outcome of Georgia elections that will determine which party controls the U.S. Senate.

 The benchmark 10-year yield was last up 3.1 basis points at 0.9482%.

 Commodities Recap

Gold hit a two-month high on Tuesday, buoyed by a weaker dollar and growing concerns about COVID-19 as investors awaited the U.S. Senate run-offs in Georgia that could impact prospects for more fiscal stimulus.

Spot gold was up 0.3% at $1,947.18 an ounce by 10:38 a.m. EST (1538 GMT), having earlier scaled its highest level since Nov. 9, at $1,952.36.

Oil prices climbed nearly 5% on Tuesday after news that Saudi Arabia will make voluntary cuts to its oil output, while international political tension simmered over Iran’s seizure of a South Korean vessel.

Brent crude futures rose $2.51, or 4.9%, to settle at $53.60 a barrel. U.S. West Texas Intermediate crude ended $2.31, or 4.9%, higher at $49.93 a barrel.

 

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