Market Roundup
- Traders buy T-bills at auction in bet on U.S. debt ceiling deal.
- North Korean leader orders border hotline with South Korea reopened on Wednesday.
- U.S. warns North Korea against new missile test, plays down talks.
- South Korea to consider steps to boost capital outflows if won rally continues.
- Bankers to burn midnight oil ahead of "MiFID" dawn.
- As protests rage in Iran, Trump's Iran policy faces sanctions test.
Economic Data Ahead
- (0400 ET/0900 GMT) Germany December Unemployment Change SA, forecast -12k, -18k last.
- (0400 ET/0900 GMT) Germany December Unemployment Total NSA, forecast 2.411 mln, 2.368 mln last.
- (0400 ET/0900 GMT) Germany December Unemployment Rate SA, forecast 5.6%, 5.6% last.
- (0430 ET/0930 GMT) UK December Markit/CIPS Cons PMI, forecast 52.5, 53.1 last.
Key Events Ahead
- (1400 ET/1900 GMT) U.S. Fed's FOMC will release the minutes from its Dec meeting- Washington.
FX Recap
USD: The dollar index against a basket of six major currencies held steady at 91.902, having pulled up from Tuesday's 3-1/2 month low of 91.751.
EUR/USD: The euro eased on Wednesday to take a breather from a rally prompted by optimism over the euro zone's economy and expectations the European Central Bank will wind down its bond-buying stimulus in 2018. The euro slipped 0.1 percent to $1.2048. The currency hit a four-month high of $1.2081 on Tuesday, marking a gain of roughly 3 percent from a mid-December trough and bringing it close to a September high of $1.2092, the currency's highest level since early 2015. It made intraday high at $1.2066 and low at $1.2041 mark. Immediate support was seen at $1.1717 and resistance was seen at $1.2099 mark.
USD/JPY: The yen trades almost flat against U.S. dollar. It made intraday high at 112.39 and low at 112.17 levels. A sustained close above 112.27 is required to take the parity higher towards key resistances around 112.96, 113.75, 114.17, 115.37 and 117.42 marks. Alternatively, a daily close below 112.27 will drag the parity down towards key supports around 111.45, 109.23, 108.12 and 107.50 marks respectively.
GBP/USD: The Sterling hits fresh 4-month high on Wednesday at $1.3610 mark, with investors brushing off weaker-than-expected manufacturing data to focus on upcoming Brexit talks. The pound, which in 2017 recorded its best annual performance against the dollar since 2009 with an almost 10 percent rise, added to those gains on Tuesday. It climbed as much as 0.7 percent to $1.3605, its strongest since Sept. 20, as the dollar weakened across the board.
AUD/USD: The Australian and New Zealand dollars consolidated near multi-week highs on Wednesday as a spate of rousing factory surveys from around the globe seemed to bode well for the two countries' commodity exports. The Aussie dollar was steady at $0.7826, having made a fresh three-month top at $0.7845 overnight. It faces stiff chart resistance at $0.7884 and $0.7898, twin peaks from October.
NZD/USD: The New Zealand dollar faded a touch to $0.7090, after topping out at $0.7130 overnight. Immediate resistance was seen at $0.7171 and support was seen at $0.7017.
Equities Recap
Japanese banks will be closed in observance of the 4 - day Bank Holiday.
Shanghai composite index to open flat at 3,347.74 points and China's CSI300 index to open up 0.1 pct at 4,091.46 points.
Australia’s S&P/ASX200 was trading 0.12 pct higher at 6,068.55 points.
Hong Kong’s hang seng was trading 0.31 pct higher at 30,611.55 points.
Taiwan stock was trading around 0.76 pct higher at 10,793.32 points.
South Korea’s Kospi was trading 0.30 percent higher at 2,487.47 points.
India’s NSE Nifty was trading around 0.23 percent higher at 10,466.70 points and BSE Sensex was trading at 0.31 percent higher 33,916.06 points.
Commodities Recap
Oil prices were stable on Wednesday, not far off mid-2015 highs reached the previous session, as strong demand and ongoing efforts led by OPEC and Russia to curb production tightened the market. U.S. West Texas Intermediate (WTI) crude futures were at $60.40 a barrel at 0141 GMT, up 3 cents from their last close, and not far off the $60.74 June 2015 high reached the previous day. Brent crude futures - the international benchmark for oil prices - were at $66.55 a barrel, down 2 cents but still not far off the $67.29 May 2015 high from the previous day.
Gold prices edged down on Wednesday after hitting a 3-1/2-month high, as the dollar recovered from its lows and technical indicators pointed to a short-term correction. Spot gold fell 0.4 percent to $1,312.71 an ounce at 0257 GMT. The precious metal earlier hit $1,321.33, its highest level since Sept. 15. U.S. gold futures were mostly unchanged at $1,315.60 an ounce.
Treasuries Recap
New Zealand government bonds slipped in line with global debt markets, pushing yields up around 4 basis points.
Australian government bond futures were likewise lower, with the three-year bond contract off 2.5 ticks at 97.800. The 10-year contract eased 5 ticks to 97.2650.
The U.S. 10-year Treasury yield was 2.465 percent at the close of U.S. trade on Tuesday, below a nine-month high of 2.504 percent on Dec. 21.
