Market Roundup
- China and U.S. to hold trade talks in Beijing on Jan 7-8.
- On first day in power, House Democrats challenge Trump to end shutdown.
- Most of UK PM May's Conservative Party members oppose her Brexit deal – survey.
- Powell's plain English Fed may need more nuance - ex-official.
- BOJ's Kuroda says need to beat deflation by whatever it takes.
- Japan Dec Nikkei manufacturing PMI, 52.6, 52.4 previous.
- China Dec Caixin Services PMI, 53.9, 53.8 previous.
- U.S. stock funds bleed more after record Dec withdrawals –Lipper.
- U.S. muni bond funds post $599.2 mln in outflows-Lipper.
- Foreign CB US debt holdings -$7.927 bln to $3.388 tln Jan 2 week.
- Treasuries -$7.387 bln to $3.016 tln, agencies -$438 mln to $307.126 bln.
Economic Data Ahead
- (0245 ET/0745 GMT) France Dec CPI(EU Norm) Prelim YY, 2.0% forecast, 2.2% previous.
- (0355 ET/0855 GMT) Germany Dec Markit Services PMI, 52.5 forecast, 52.5 previous.
- (0355 ET/0855 GMT) Germany Dec Markit Comp Final PMI, 52.2 forecast, 52.2 previous.
- (0355 ET/0855 GMT) Germany Dec Unemployment Chg SA, -11k forecast, -16k previous.
- (0355 ET/0855 GMT) Germany Dec Unemployment Total NSA, 2.186M previous.
- (0355 ET/0855 GMT) Germany Dec Unemployment Rate SA, 5.0% forecast, 5.0% previous.
- (0355 ET/0855 GMT) Germany Dec Unemployment Total SA, 2.276 previous.
- (0400 ET/0900 GMT) EZ Dec Markit Services Final PMI, 51.4 forecast, 51.5 previous.
- (0400 ET/0900 GMT) EZ Dec Markit Comp Final PMI, 51.3 forecast, 51.3 previous.
- (0500 ET/1000 GMT) EZ Dec HICP Flash YY, 1.8% forecast, 1.9% previous.
- (0500 ET/1000 GMT) EZ Dec HICP-X F&E Flash YY, 1.1% forecast, 1.1% previous.
Key Events Ahead
- (1015 ET/1515 GMT) Federal Reserve Chairman Jerome Powell participates in panel titled "U.S. Federal Reserve: Joint Interview" before the American Economic Association/Allied Social Science Association annual meeting in Atlanta.
- (1015 ET/1515 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic participates in "Long-Run Macroeconomic Performance: A Multi-Faceted Perspective" panel before the American Economic Association/Allied Social Science Association annual meeting in Atlanta.
- (1330 ET/1830 GMT) Federal Reserve Bank of Richmond President Thomas Barkin speaks on "The Outlook for Growth" before the Maryland Bankers' Association First Friday Economic Outlook in Baltimore.
FX Recap
USD: The dollar index was relatively unchanged at 96.3. The index fell 0.56 percent in the previous session.
EUR/USD: The euro was unchanged from Thursday's close at $1.1393 mark. It made intraday high at $1.1411 and low at $1.1383 mark. A consistent close below $1.1393 will drag the parity down towards key supports around $1.1270, $1.1185 and $1.1080 levels respectively. Alternatively, reversal from key support will drag the parity higher towards key resistances around $1.1472, $1.1550, $1.1620 and $1.1820 marks respectively.
USD/JPY: The safe-haven yen weakened versus the dollar on Friday on hopes upcoming U.S.-China trade talks would make some progress, but broader market confidence remained weak amid worries over slowing global growth. Market sentiment perked up after China confirmed that trade talks with the United States will be held at the vice ministerial level in Beijing on Jan 7-8. Trade tensions between the world's two largest economies had rattled financial markets for most of 2018. The yen weakened 0.5 percent to 108.44. It made intraday high at 108.44 and low at 107.51 levels. A sustained close above 107.65 is required to take the parity higher towards key resistances around 108.89, 110.48, 111.40, 112.60, 113.98, 114.55, 115.25 and 117.98 marks respectively. Alternatively, a daily close below 107.65 will drag the parity down towards key support around 101.40 marks respectively.
GBP/USD: The sterling trades almost flat against U.S. dollar and currently trading around $1.2628 mark. Pair made intraday high at $1.2645 and low at $1.2615 mark. A sustained close below $1.2632 requires for dragging the parity down towards key support around $1.2150 mark. On the other side, key resistances are seen at $1.2815, $1.3047, $1.3187, $1.3215, $1.3362 and $1.3490 levels respectively.
AUD/USD: The Aussie was back at $0.7016, after a wild 24 hours saw it collapse almost three full cents to $0.6715 only to fetch up higher than when it started. The pair made intraday high at $0.7029 and low at $0.6933 levels. A consistent close above $0.7066 requires for upside rally.
NZD/USD: The kiwi dollar had returned to $0.6694, having been as low as $0.6585 at one stage on Thursday when a "flash crash" had sent it and the Aussie careening lower. A sustained close below $0.6654 requires for the downside rally. Alternatively, key resistance was seen at $0.6750 mark.
Equities Recap
Tokyo's Nikkei share average extends fall, down 3.06 pct.
Australia’s S&P/ASX 200 was trading 0.25 pct lower at 5,619.40 points.
Shanghai composite index to open down 0.7 pct at 2,446.02 points and China's CSI300 index up over 2 pct.
Taiwanese stock was trading around 1.30 percent lower at 9,374.45 points.
Hong Kong’s Hang seng was trading 1.45 pct higher at 25,430.25 points.
South Korea’s Kospi was trading 0.57 percent higher at 2,005.55 points.
India’s NSE Nifty was trading around 0.08 percent lower at 10,667.58 points while BSE Sensex was trading 0.02 points lower at 35,507.55 points.
Commodities Recap
Oil prices steadied on Friday after China said it would hold talks with Washington on Jan. 7-8 aimed at solving trade disputes between the two world's biggest economies. Crude prices had previously fallen after the United States followed most other major economies into a manufacturing downturn. U.S. West Texas Intermediate (WTI) crude oil futures were at $47.15 per barrel at 0345 GMT, 6 cents, or 0.1 percent above their last settlement. International Brent crude futures were close to their last close, at $55.93 a barrel.
Gold prices hit their highest in 6-1/2 months on Friday as volatile equity markets on the back of weak U.S. data heightened fears of a global economic slowdown, propelling the safe-haven metal towards a potential third straight weekly gain. Spot gold was up 0.2 percent at $1,296.35 per ounce, as of 0301 GMT, having earlier touched $1,298.42, its highest since mid-June. The yellow metal has risen over 1 percent so far this week. U.S. gold futures were up about 0.4 percent at $1,299.50 per ounce.
Treasuries Recap
Aussie yields on 10-year debt dropped 10 basis points to 2.18 percent, depths not visited since October 2016.
10-year bond futures held gains of almost 19 ticks for the week at 97.8200, which would be its best weekly performance since late 2017.
NZ yields on two-year debt have dived to 1.68 percent, putting them below the 1.75 percent cash rate.
