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Americas Roundup: Dollar index slips to 3-year low on broad-based weakness, Wall Street edges higher, Gold rises, Oil jumps as Brent tops $70, with inventory data on tap-January 24th 2018

Market Roundup


• US Jan Rich Fed, Services Index, 20, 25 previous.

• US Jan Rich Fed Mfg Shipments, 15, 24 previous.

• US w/e Redbook MM, 0.0%, -0.3% previous.

• US w/e Redbook YY, 3.9%, 2.6% previous.

• Shutdown-ending bill seen expanding U.S. debt by $31 bln in decade.

• U.S. lawmakers scramble on immigration as govt. shutdown paused.

• Fed nominee Goodfriend: Current Fed policy "more or less" on right course.

• U.S. attorney general questioned in special counsel Russia probe.

• North Korea, U.S. clash at disarmament forum over nuclear arms.

• Eurozone Jan consumer confidence jumps to 17-yr high.

• Upbeat German investors shrug off political uncertainty.

• Germany anti-euro party to chair budget committee if SPD joins government.

• Catalan separatist leader stays vague on possible return, Spain on alert.

• Crunch time for NAFTA as negotiators open Montreal round of talks.

• Trans-Pacific trade pact, without U.S., to be signed in March –Japan.

Looking Ahead - Economic Data (GMT)

• 23 Jan 23:50 Japan Dec Exports YY, 10.1% forecast, 16.2% previous

• 23 Jan 23:50 Japan Dec Imports YY, 12.3% forecast, 17.2% previous

• 23 Jan 23:50 Japan Dec Trade Balance Total Yen, 530.0B forecast, 112.2B previous

• 24 Jan 00:30 Japan Nikkei Mfg PMI Flash, 54.0 previous

Looking Ahead - Events, Other Releases (GMT)

• 23 Jan 23:30 Fed's Charles Evans gives introductory remarks before the Chicago Council on Global Affairs conference - Chicago

• 24 Jan 10:30 Riksbank Deputy Governor Martin Floden to discuss current monetary policy at Moody's seminar on Credit Trends - Stockholm

• 24 Jan 08:15 ECB's Daniele Nouy attends the European Banking Federation Boardroom Dialogue - Frankfurt

Currency Summaries

EUR/USD is likely to find support at 1.2156 levels and currently trading at 1.2297 levels. The pair has made session high at 1.2305 and hit lows at 1.2224 levels. The euro rose higher against US dollar on Tuesday after data showed euro zone consumer confidence jumped much more than expected in January, underlining the strong momentum in the euro zone economy. Data showed consumer confidence jumped much more than expected in January, a flash estimate from the European Commission showed on Tuesday. The Commission said consumer confidence in the 19 countries sharing the euro in January rose to 1.3 points from 0.5 points in December, well above market consensus of a rise to 0.6.The euro has rallied this year, boosted by growing optimism that a strengthening economy would prompt the European Central Bank to signal a quicker exit from its years of efforts to stimulate the economy than previously forecast. The dollar index, which measures the greenback against six rival currencies, was down 0.32 percent at 90.115, after slipping as low as 90.063, its lowest since December 2014.The euro was up 0.29 percent to $1.2295 against the greenback.

GBP/USD is supported in the range of 1.3850 levels and currently trading at 1.3999 levels. It reached session high at 1.4028 and dropped to session low at 1.3913 levels. Sterling briefly popped above $1.40 on Tuesday, extending a rally since the closing days of last year on growing investor optimism about the near-term outlook for the British currency. Protracted dollar weakness and optimism that Britain will reach a favorable divorce deal with the European Union has powered a 3.5 percent rally in the British pound since the last week of December. On Tuesday, it rose above the $1.40 level in early Asian trading to a post-Brexit high of $1.4005. On a year-to-date basis, it is the best performing major currency, beating even the euro which is up more than 2 percent in that period thanks to a rapidly improving economy. At 0745 GMT, sterling was trading at $1.3965 against the dollar. Against the euro, it was broadly flat at 87.73 pence. Currency traders believe the mood in London and Brussels suggests both sides are more amenable to hammering out a transition agreement between Britain and the trading bloc, and then an eventual deal for the terms of departure. With the chance of a "hard" Brexit reduced, the pound has re-anchored itself to UK economic performance and to monetary policy outlook.

USD/CAD is supported at 1.2397 levels and is trading at 1.2450 levels. It has made session high at 1.2490 and lows at 1.2428 levels. The Canadian dollar edged higher against its U.S. counterpart on Tuesday after U.S. President Donald Trump said talks to renegotiate NAFTA were going well and as oil prices rose. Trump previously threatened to withdraw from the North American Free Trade Agreement, which could hurt Canada's economy. The country sends 75 percent of its goods exports to the United States. It has helped the Canadian dollar that Trump was not issuing more threats. Canada has responded to the lack of clarity over the future of the 1994 agreement by attempting to diversify its trade. Earlier on Tuesday, it and 10 other nations agreed to sign a reworked Asia-Pacific trade pact. The price of oil, one of Canada's major exports, was lifted by healthy world economic growth prospects and production curbs by the Organization of the Petroleum Exporting Countries, Russia and their allies. The Canadian dollar was last at trading 0.1 percent higher at C$1.2426 to the greenback. The currency traded in a range of C$1.2415 and C$1.2490.On the data front, Canadian retail sales data for November is due on Thursday and the December inflation report is due on Friday.

AUD/USD is supported around 0.7933 levels and currently trading at 0.7997 levels. It hit session high at 0.7997 and made session lows at 0.7954 levels. The Australian dollar dipped slightly against its U.S. counterpart on Tuesday as news of U.S. tariffs sparked fears of a global trade war, offsetting upgrades to the world growth outlook and a deal to re-open the U.S. government. Risk sentiment took a knock when President Donald Trump slapped steep tariffs on imported washing machines and solar panels, in what might only be the first of several potential trade restrictions. While the tariffs were not aimed directly at Australian goods, the country is heavily reliant on free trade and particularly of commodities that fuel global supply chains. As a result the Aussie dropped back to $0.7997, from a top of $0.8029. The currency had already run into offers above $0.8030 and needs to end a day above the $0.8000 barrier to keep its recent uptrend going. The Aussie had being doing well after the IMF upgraded its global economic outlook to growth of 3.9 percent for this year and next, against 3.7 percent previously. The price of oil, was lifted by healthy world economic growth prospects and production curbs by the Organization of the Petroleum Exporting Countries, Russia and their allies. U.S. crude prices were up nearly 1 percent at $64.18 a barrel.

Equities Recap

European shares rose to new highs on Tuesday after U.S. senators struck a deal to end a three-day government shutdown, while earnings updates were also in focus.

UK's benchmark FTSE 100 closed up 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.09 percent, Germany's Dax ended up by 0.7 percent, France’s CAC finished the day down by 0.2 percent.

U.S. stocks advanced on Tuesday, as strong results from Netflix helped lift the S&P and Nasdaq Composite, but the Dow Industrials were hemmed in by declines in Johnson & Johnson and Procter & Gamble.

Dow Jones closed up by 0.01 percent, S&P 500 ended up by 0.22 percent, Nasdaq finished the day up by 0.73 percent.

Treasuries Recap

U.S. Treasury debt yields weakened on Tuesday in quiet trading, moving in tandem with Japanese government bond yields, after the Bank of Japan kept interest rate targets unchanged and its top official quashed speculation of a move away from an easy monetary policy.

In late trading, U.S. 10-year Treasury yields fell to 2.627 percent, from 2.663 percent late on Monday.

U.S. 30-year bond yields, meanwhile, hit a one-week low of 2.879 percent and was last at 2.907 percent, down from Monday's 2.927 percent.U.S. 2-year note yields were also down, trading at 2.048 percent.

Commodities Recap

Gold prices rose on Tuesday as the U.S. dollar fell to fresh three-year lows, but an end to uncertainty created by a three-day U.S. government shutdown capped gains.

Spot gold was up 0.3 percent at $1,337.36 an ounce at 1:38 p.m. EST (1838 GMT) after touching a one-week high of $1,339.09, while U.S. gold futures for February delivery settled up $4.80, or 0.4 percent, at $1,336.70 per ounce.

Oil rose more than 1 percent on Tuesday, with benchmark Brent crude hitting $70 a barrel for the first time in a week, boosted by healthy world economic growth prospects and expectations for continued production curbs by OPEC, Russia and their allies.

U.S. West Texas Intermediate (WTI) crude futures closed up 90 cents to $64.47 a barrel, for a gain of 1.4 percent. WTI reached its highest since December 2014 on Jan. 16 at $64.89.

Brent crude futures settled up 93 cents, or 1.4 percent, to $69.96, not far off the three-year high of $70.37 reached on Jan. 15.
 

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November 16 21:00 UTC Released

UST Flows,Incl.Swaps

Actual

16.7 Bln USD

Forecast

Previous

111.5 Bln USD

November 16 21:00 UTC Released

USOverall Net Capital Flows

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-29.1 Bln USD

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108.2 Bln USD

January 31 00:00 UTC 420179420179m

ARAnnual Primary Balance*

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2016 bln ARS

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January 31 00:00 UTC 420179420179m

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2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 431999431999m

ARTrade Balance

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-1541 %

January 31 00:00 UTC 420179420179m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 431999431999m

ARTrade Balance

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-1541 %

January 31 00:00 UTC 420179420179m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 420179420179m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 420179420179m

ARAnnual Primary Balance*

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2016 bln ARS

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