Market Roundup
- PBOC sets Yuan mid-point at 6.8668 / dollar vs last close 6.8830 vs 6.9307 fix Thurs– Reuters.
- Yuan mid-point rate is strongest since Dec 6 -Reuters
- Australian Nov trade surplus AUD 1.24 billion vs forecast AUD 500 million deficit - Reuters
- Goods and services exports +8.4%, goods and services imports flat Reuters
- Japan government spokesman says Toyota is an important corporate citizen in the US Reuters
- Japan trade minister Seko: Japan firms have and will continue to contribute to the US. Employment -Reuters
- Japan chief government spokesman: temporarily recalling Japan's ambassador to S. Korea -Reuters
- Japan suspends talks on FX swap deal with S. Korea over comfort women statue - Reuters
Economic Data Ahead
- (0200 ET/0700 GMT) Norway Credit Indicator YY* % Nov 5.00 previous
- (0200 ET/0700 GMT) Norway Manufacturing Output MM* % Nov 0.20
- (0200 ET/0700 GMT) Germany Industrial Orders MM % Nov 4.90
- (0245 ET/0745 GMT) France Current Account bln EU Nov -3.50
- (0245 ET/0745 GMT) France Imports, EUR Approx Time bln EU Nov 41.94
- (0245 ET/0745 GMT) France Trade Balance, EUR, SA bln EU Nov -5.20
- (0245 ET/0745 GMT) France Exports, EUR Approx Time bln EU Nov 36.74
- (0500 ET/1000 GMT) Eurozone Business Climate Dec 0.42
- (0500 ET/1000 GMT) Eurozone Consumer Confidence Final Dec -6.10
- (0500 ET/1000 GMT) Eurozone Selling Price Expectations Dec 4.80
- (0500 ET/1000 GMT) Eurozone Retail Sales MM % Nov 1.10
- (0500 ET/1000 GMT) Eurozone Services Sentiment Dec 12.10
- (0500 ET/1000 GMT) Eurozone Industrial Sentiment Dec -1.10
- (0500 ET/1000 GMT) Eurozone Retail Sales YY % Nov 2.40
- (0500 ET/1000 GMT) Eurozone Economic Sentiment Dec 106.50
- (0500 ET/1000 GMT) Eurozone Cons Inflation Expectations Dec 6.30
Key Events Ahead
- No Significant Event Scheduled
FX Beat
DXY: The dollar rose versus its major peers, as investors attention shifted towards the U.S. non-farm payroll report for hints on the pace of possible Fed interest rate hikes this year. The greenback against a basket of currencies traded 0.3 percent higher at 101.68, hovering away from a low of 101.30 hit in the previous session, its lowest since Dec. 14. FxWirePro's Hourly Dollar Strength Index stood at -62.59 (Bearish) by 0500 GMT.
EUR/USD: The euro eased below the 1.0600, as the dollar gained traction ahead of the U.S. non-farm payrolls due out later in the day. On Thursday, the major rallied 1.3 percent to 1.0615 from a low of 1.0480, after the ADP National Employment Report showed that U.S. private employers added 153,000 jobs in December, below estimates for a gain of 170,000. The European currency traded 0.2 percent up at 1.0584, having hit a high of 1.0615 in the previous, it’s highest since Dec. 30. Investors’ attention now remains on German retail sales, factory orders and Eurozone's economic sentiment indices, ahead of the U.S. employment data for further cues on the pair. FxWirePro's Hourly Euro Strength Index stood at 38.08 (Neutral) by 0400 GMT. Immediate resistance is located at 1.0627 (Nov 25-High), a break above targets 1.0650. On the downside, support is seen at 1.0550, a break below could drag it till 1.0519 (7-EMA).
USD/JPY: The dollar retreated after declining to a fresh 3-week low earlier in the session, despite the flat action in the Treasury yields. On Thursday, the major fell 1.6 percent overnight, from a high of 117.42 to 115.22 following the release of downbeat U.S. ADP employment report. The pair trades 0.3 percent higher at 115.71, having hit an early low of 115.07, its lowest since Dec. 14. Markets focus now shifts towards the U.S. non-farm payrolls figure, wage growth number and unemployment rate releases for further momentum on the pair. FxWirePro's Hourly Yen Strength Index stood at 119.95 (Highly Bullish) by 0400 GMT. Immediate resistance is located at 116.13 (Session High), a break above targets 117.00. On the downside, support is seen at 115.00, a break below could take it near 114.20.
GBP/USD: Sterling declined after touching a near 3-week peak above the 1.2400 handle, as the greenback recovered across the board following a tumble overnight to a 3-week low. The major rose from a low of 1.2270 to 1.2431 in the previous session, as strong data from the UK's services sector and record car sales underlined the economy's post-Brexit resilience. Sterling trades 0.2 percent up at 1.2382, pulling away from a high of 1.2431 hit on Thursday, it’s highest since Dec.19. FxWirePro's Hourly Sterling Strength Index stood at -68.76 (Bearish) by 0400 GMT. Markets attention will remain on series of U.S. economic data, amid a lack of relevant data from the UK docket. Immediate resistance is located at 1.2450, a break above could take it near 1.2500. On the downside, support is seen at 1.2336 (7-EMA), a break below targets 1.2300. Against the euro, the pound trades 0.1 percent down at 85.45 pence, having hit a near 1-week low of 85.81 the day before.
AUD/USD: The Australian dollar stood firm near 3-week highs after data showed the economy recorded its first trade surplus in almost three years in November as rising commodity prices strengthened export earnings. Australia posted a trade surplus of A$1.243 billion in November, surpassing forecasts of a A$500 million deficit, as exports rose by 8.4 percent. However, the major trimmed gains after rising to an intra-day high of 0.7352, as the greenback recovered across the board. The Aussie trades 0.24 percent down at 0.7315, having hit a high of 0.7356 on Thursday, it’s highest since Dec. 16. It has gained nearly 2 percent for the week. FxWirePro's Hourly Aussie Strength Index stood at 11.22 (Neutral) by 0500 GMT. Investors will continue to digest upbeat Australian trade data, ahead of the U.S. employment figures due later in the day. Immediate support is seen at 0.7300, a break below could drag it till 0.7268 (7-EMA). On the upside, resistance is located at 0.7370, a break above targets 0.7400.
NZD/USD: The New Zealand dollar rallied, extending its recovery mode to a 3-week high, however, it eased as buying interest intensified around the U.S. dollar against a basket of major currencies. The Kiwi trades 0.2 percent lower at 0.7010, having hit a high of 0.7043, its highest since Dec. 16, and has gained 1.1 percent this week FxWirePro's Hourly Kiwi Strength Index was at 0.47 (Neutral) by 0500 GMT. The major will continue to track board based market sentiment, ahead of the U.S. employment data and trade balance figures. Immediate resistance is located at 0.7050 (Dec 16 High), a break above could take it till 0.7100. On the downside, support is seen at 0.6980 (21-DMA), a break below could drag it near 0.6950.
Equities Recap
Asian shares hit 4-week peak, while world shares touched a 1-1/2-year peak, as the U.S. dollar recovered across the board ahead of U.S. nom-farm payroll data.
MSCI's gauge of the world's stock markets gained, rising to its highest levels in a year and a half, while MSCI's broadest index of Asia-Pacific stocks outside Japan added 0.25 percent to its strongest in four weeks.
Tokyo's Nikkei fell 0.43 percent to 19,438.60 points, Australia's S&P/ASX 200 index ended flat at 5,753.10 points and South Korea's KOSPI was trading 0.38 percent up at 2,049.53 points.
Shanghai composite index fell 0.3 percent to 3,156.21 points, while CSI300 index was trading 0.49 percent lower at 3,351.31 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 22,523.32 points. Taiwan shares added 0.15 percent to 9,372.22 points.
Commodities Recap
Crude oil prices slightly edged down, as doubts that all producers will implement output cuts agreed in 2016 kept prices from rising further. International benchmark Brent crude was trading 0.04 percent lower at $56.85 per barrel by 0406 GMT, having touched a high of $58.35 earlier in the week, its strongest since July 2015. U.S. West Texas Intermediate crude fell 0.06 percent at $53.72 a barrel, after rising as high as $55.21 on Tuesday, it’s highest since July 2015.
Gold prices declined from a 1-month high hit in the previous session, as investors attention shifted towards the U.S. jobs data due later in the day for clues on the pace of likely Fed interest rate hikes this year. Spot gold eased 0.1 percent to $1,178.70 per ounce by 0412 GMT, having hit its highest since Dec. 5 at $1,184.81. U.S. gold futures were down 0.2 percent, at $1,179 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.3628 percent lower by 0.005 bps, while 5-year yield was down by 0.01 bps at 1.8530 percent.
The Australian government bonds traded modestly firmer as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year Treasury note fell 1 basis point to 2.70 percent, the yield on 15-year note dipped 1-1/2 basis points to 3.16 percent and the yield on short-term 2-year slid 1 basis point to 1.86 percent.
The New Zealand government bonds gained following firmness in the U.S. Treasuries post dovish FOMC December meeting minutes. Also, investors poured into safe-haven assets as dairy prices posted their largest fall over ten months at the first dairy auction of 2017. In intraday trading, the yield on the benchmark 10-year bond fell 5-1/2 basis points to 3.20 percent, the yield on 7-year note dipped 3-1/2 basis points to 2.84 percent and the yield on 5-year note slid 2-1/2 basis points to 2.58 percent.
Canadian government bond prices were higher across the yield curve, with the 2-year up 6.5 Canadian cents to yield 0.72 percent and the 10-year rising 38 Canadian cents to yield 1.666 percent. The gap between Canada's 10-year yield and its U.S. equivalent narrowed by 5.6 basis points to -68.5 basis points, as U.S. Treasuries outperformed amid uncertainty about the incoming Trump administration.
