Market Roundup
- Trump: assured by Rosenstein he's not a target of Mueller probe -NYT
- Trump to meet with China's Xi to try to seal trade deal, progress reported
- Trump, Democrats battle in early stage of U.S. border security talks
- U.S. envoy raises prospect of U.S. compromise in N.Korea talks
- Relocation on agenda for nearly 1-in-3 UK firms due to Brexit-IoD
- India's Modi looks to budget to shore up political base; jobs and farmers in focus
- Australian home prices slide into new year, decline quickening
- China Jan Caixin Mfg PMI Final, 48.3, 49.5 f'cast, 49.7 prev
- Japan Jan Nikkei Mfg PMI, 50.3, 50.0 prev
- Japan Dec Unemployment Rate, 2.4%, 2.4% f'cast, 2.5% prev
- U.S. fund investors slash $13.5 bln of stock holdings in latest week -Lipper
- Foreign CB US debt holdings +$5.595 bln to $3.414 tln Jan 30 week
- Treasuries -$1.725 bln to $3.025 tln, agencies +$6.834 bln to $318.935 bln
Economic Data Ahead
- (0350 ET/0850 GMT) France Jan Markit Mfg PMI, 51.2 f'cast, 51.2 prev
- (0355 ET/0855 GMT) Germany Jan Markit/BME/Mfg PMI, 49.9 f'cast, 49.9 prev
- (0400 ET/0900 GMT) EZ Jan Markit Mfg Final PMI, 50.5 f'cast, 50.5 prev
- (0430 ET/0930 GMT) Great Britain Jan Markit/CIPS/Mfg PMI, 53.5 f'cast, 54.2 prev
- (0500 ET/1000 GMT) EZ Jan HICP Flash YY, 1.4% f'cast, 1.6% prev
Key Events Ahead
- (0945 ET/1445 GMT) Fed Dallas's Robert Kaplan participates in moderated Q&A session before Texas Lyceum Public Conference - Austin
FX Beat
DXY: The dollar index rallied as investor risk sentiment improved after U.S. President Donald Trump said he would meet with Chinese President Xi Jinping soon to try and seal a comprehensive trade deal. The greenback against a basket of currencies trades 0.1 percent up at 95.62, having touched a low of 95.16 on Thursday, its lowest since December 10. FxWirePro's Hourly Dollar Strength Index stood at -24.69 (Neutral) by 0500 GMT.
EUR/USD: The euro eased, extending losses from the previous session, as growth and inflation in the euro zone remained weaker than expected. The European currency traded 0.05 percent down at 1.1440, having touched a high of 1.1514 on Thursday, its highest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at 27.07 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and EZ prelim consumer price index, ahead of the U.S. non-farm payrolls, unemployment rate and Markit manufacturing PMI. Immediate resistance is located at 1.1474 (December 21 High), a break above targets 1.1540 (January 11 High). On the downside, support is seen at 1.1422 (Jan. 8 Low), a break below could drag it till 1.1370 (Jan. 17 Low).
USD/JPY: The dollar slightly edged higher amid optimism the United States and China may reach a trade deal. The major was trading 0.05 percent up at 108.88, having hit a low of 108.49 on Thursday, its lowest since January 16. FxWirePro's Hourly Yen Strength Index stood at -24.69 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. non-farm payrolls, unemployment rate and Markit manufacturing PMI. Immediate resistance is located at 109.39 (Jan. 17 High), a break above targets 109.88 (Jan. 18 High). On the downside, support is seen at 108.37 (Jan. 16 Low), a break below could take it lower at 107.98 (Jan. 14 Low).
GBP/USD: Sterling declined, below the 1.3100 handle, amid persisting uncertainty over a deal to avoid a chaotic British exit from the European Union. The major traded 0.1 percent down at 1.3098, having hit a high of 1.3217 on Friday; it’s highest since October 16. FxWirePro's Hourly Sterling Strength Index stood at -91.81 (Slightly Bearish) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3170, a break above could take it near 1.3257 (October 12 High). On the downside, support is seen at 1.3021 (November 6 Low), a break below targets 1.3000. Against the euro, the pound was trading flat at 87.31 pence, having hit a low of 87.66 on Thursday, it’s lowest since Jan. 23.
AUD/USD: The Australian dollar eased, reversing some of its previous session gains, after data showed China's Caixin/Markit index of manufacturing fell to its lowest since February 2016. However, optimism about the prospects for a U.S.-China deal on tariffs limited downside. The Aussie trades 0.4 percent down at 0.7238, having hit a high of 0.7295 on Thursday; it’s highest since December 5. FxWirePro's Hourly Aussie Strength Index stood at 89.50 (Slightly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7197 (Dec. 12 Low), a break below targets 0.7115 (Jan. 22 Low). On the upside, resistance is located at 0.7300 (November 20 High), a break above could take it near 0.7327 (November 28 High).
NZD/USD: The New Zealand dollar retreated from a near 2-month peak touched in the prior session after a private survey showed factory activity in China shrank by the most in almost three years in January. The Kiwi trades 0.1 percent down at 0.6909, having touched a high of 0.6938 on Thursday, its highest level December 5. FxWirePro's Hourly Kiwi Strength Index was at 95.99 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6944 (Dec. 5 High), a break above could take it near 0.6998 (May 30 High). On the downside, support is seen at 0.6856 (Dec. 6 Low), a break below could drag it below 0.6799 (Jan. 15 Low).
Equities Recap
Asian shares retreated from recent peaks as a dismal survey on China's factory activity portrayed a weaker picture of the Chinese economy.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 percent.
Tokyo's Nikkei rallied 0.1 percent to 20,788.39 points, Australia's S&P/ASX 200 index declined 0.05 percent to 5,862.80 points and South Korea's KOSPI fell 0.1 percent to 2,202.39 points.
Shanghai composite index rose 1.2 percent to 2,615.99 points, CSI300 index traded 1.4 percent up at 3,246.47 points, and Hong Kong’s Hang Seng traded 0.3 percent higher at 27,855.25 points.
Commodities Recap
Crude oil prices declined, weighed down by fresh concerns over China's economic slowdown. International benchmark Brent crude was trading 0.3 percent down at $60.94 per barrel by 0510 GMT, having hit a high of $62.64 on Wednesday, its highest since January 22. U.S. West Texas Intermediate was trading 0.3 percent lower at $53.82 a barrel, after rising as high as $55.35 on Thursday, its highest since the November 21.
Gold price slumped from a 9-month peak as investors sought riskier assets amid optimism the United States and China may reach a trade deal. Spot gold fell 0.2 percent to $1,318.14 per ounce at 0517 GMT, having touched a high of $1,326.15 on Thursday, its highest level since April 26 and was set to gain 1.2 percent for the week. U.S. gold futures were down 0.1 percent at $1,317.80 per ounce.
Treasuries Recap
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries, with the 10-year rising 29 Canadian cents to yield 1.879 percent.
