Market Roundup
- Gold hits four-month high
- Oil prices jump $2 after U.S airstrike
Economic Data Ahead
- (0400 GMT/0900 GMT) EZ M3 Money Supply
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index held firm as an index of U.S. manufacturing activity due later is expected to show a slight uptick to 49.0 in December, from 48.1 the month before. The greenback against a basket of currencies traded flat at 96.77, having touched a low of 96.36 on Tuesday, its lowest since July 1.
EUR/USD: The euro consolidated near yesterday's low after data showed factory activity across the eurozone contracted for an 11th straight month, indicating the economy don’t expect an imminent improvement, purchases of raw materials were reduced and staffing levels cut. The European currency traded flat at 1.1174, having touched a high of 1.1239 on Wednesday, its highest since August 7. Investors’ attention will remain on a series of data from the eurozone economies and EZ M3 Money Supply, ahead of the U.S. construction spending, ISM manufacturing PMI and FOMC minutes. Immediate resistance is located at 1.1188, a break above targets 1.1220. On the downside, support is seen at 1.1154, a break below could drag it below 1.1134.
USD/JPY: The dollar plunged to a 2-month low as tensions mounted in the Middle East after a senior Iranian military official was killed in a U.S. airstrike. The major was trading 0.4 percent down at 108.16, having hit a low of 108.16 earlier, its lowest since Nov. 1. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. construction spending, ISM manufacturing PMI and FOMC minutes. Immediate resistance is located at 109.02 (5-DMA), a break above targets 109.22. On the downside, support is seen at 107.88, a break below could take it near at 107.62.
GBP/USD: Sterling steadied below the 1.3200 handle after data released yesterday showed British factory output fell in December at the fastest rate since 2012. The major traded flat at 1.3136, having hit a high of 1.3384 on Wednesday, it’s highest since Dec. 17. Investors’ attention will remain on the development surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3229, a break above could take it near 1.3284. On the downside, support is seen at 1.3054 (10-DMA), a break below targets 1.2989. Against the euro, the pound was trading 0.1 percent up at 85.05 pence, having hit a high of 84.53 on Wednesday, it’s highest since Dec. 17.
AUD/USD: The Australia dollar declined to a 1-week low as risk sentiment weakened after the Pentagon confirmed U.S. air forces had killed a senior Iranian military official at Baghdad airport. The Aussie trades 0.3 percent down at 0.6971, having hit a high of 0.7031 on Wednesday, it’s highest since July 23. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6940 (10-DMA), a break below targets 0.6895 (21-DMA). On the upside, resistance is located at 0.7016, a break above could take it near 0.7031.
NZD/USD: The New Zealand dollar slumped to a 1-week trough below the 0.6700 handle as speculators took profits on recent gains. The Kiwi trades 0.3 percent down at 0.6677, having touched a low of 0.6670 earlier, its highest level since Dec. 27. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6710, a break above could take it near 0.6755. On the downside, support is seen at 0.6659 (10-DMA), a break below could drag it below 0.6622.
Equities Recap
Asian shares fell after U.S. airstrikes in Iraq killed a top Iranian commander, heightening geopolitical tensions.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent.
Tokyo's Nikkei plunged 0.8 percent to 23,656.62 points, Australia's S&P/ASX 200 index rose 0.7 percent to 6,739.80 points and South Korea's KOSPI surged 0.2 percent to 2,178.21 points.
Shanghai composite index eased 0.3 percent to 3,076.01 points, while CSI 300 index traded 0.4 percent down at 4,135.46 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 28,495.11 points. Taiwan shares shed 0.2 percent to 12,078.32 points.
Commodities Recap
Crude oil prices surged more than $2 after a U.S. air strike killed key Iranian and Iraqi military personnel, raising concerns that escalating Middle East tensions may disrupt oil supplies. International benchmark Brent crude was trading 2.9 percent at $68.15 per barrel by 0356 GMT, having hit a high of $69.15 earlier, its highest since September 17. U.S. West Texas Intermediate was trading 2.7 percent up at $62.80 a barrel, after rising as high as $63.81 earlier, its highest since September 17.
Gold prices rallied to a 4-month high as tensions mounted in the Middle East after a senior Iranian military official was killed in a U.S. airstrike. Spot gold was trading 0.6 percent up at $1,537.57 per ounce by 0402 GMT, having touched a high of $1540.99 earlier, its highest since September 5. U.S. gold futures gained 0.9 percent to $1,541.20 per ounce.
Treasuries Recap
The Australian bonds jumped during Asian session tracking a similar movement in the United States’ Treasuries amid thin trading day as markets are scheduled to witness data of little economic significance towards the start of this year. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 4 basis points to 1.261 percent, the yield on the long-term 30-year bond slumped to 1.883 percent and the yield on short-term 2-year suffered 8 basis points to 0.829 percent.
