Market Roundup
- IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) was revised higher to 47.5 in December
- PBoC cut its Reserve Requirement Ratio in the first quarter of 2020 by 0.5 percentage points
- Gauge of Brexit uncertainty falls to a six-month low in December - BoE survey
- WTI posts modest daily losses, continues to trade above $61
Economic Data Ahead
- (0830 ET/1330 GMT) U.S Initial Jobless Claims (Dec 27) (Forecast 227K, Prior 222K)
- (0830 ET/1330 GMT) U.S. Continuing Jobless Claims (Dec 20) (Forecast 1.717M, Prior 1.719M)
- (0930 ET/1430 GMT) Canada Markit Manufacturing PMI (Dec) (Forecast 51.9, Prior 51.4)
- (0945 ET/1445 GMT) U.S Markit Manufacturing PMI (Dec) (Forecast 52.5, Prior 52.5)
Key Events Ahead
- No Major Events Scheduled
FX Beat
DXY: The US Dollar Index, which tracks the greenback's value against a basket of six major currencies pauses losing streak. DXY bounces off six-month low to hit session highs at 96.65. Close above 5-DMA (96.68) required for upside continuation.
EUR/USD: EUR/USD edges lower amid broad US dollar recovery. The major was trading 0.23% lower at 1.1196 at 10:58 GMT, pausing its upward streak. Rally in German yields and upbeat German/ EZ PMIs are likely to limit downside. Price action is holding above 200-DMA and technical studies keep scope for further gains. Focus on US Jobless Claims and Manufacturing PMI data along with US-China trade updates for trading impulse. Major support lies at 200-DMA at 1.1142, while 55W EMA offers immediate resistance at 1.1209.
USD/CAD: USD/CAD recovers from 14-month lows at 1.2951 hit on December 31st trade. The pair was trading 0.20% higher at 1.3000 at 11:30 GMT. Technical studies are strongly bearish. Price action is on track to close below 200W MA. Oversold oscillators may support minor upside. Weekly Jobless Claims data from the US and the IHS Markit's Manufacturing PMI (final) from both Canada and the US will be looked upon for fresh impetus. 5-DMA is immediate resistance at 1.3048. Break above could see test of 21-EMA at 1.3132.
GBP/USD: The GBP bulls pauses winning streak after UK Final Dec Manufacturing PMI disappoints. The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) was revised higher to 47.5 in December versus 47.6 expected and four-month lows of 47.4 – December’s first reading. Bulls in GBP ignore the upward revision to the UK Manufacturing PMI for December. GBP/USD recovery mode intact, technicals support gains. Price action is extending gains above 200W MA, scope for further upside.
USD/JPY: USD/JPY recovers from 3-week lows amid broad-based USD recovery and risk-on sentiment. However, holiday season in Japan keeps trading activity subdued. Focus on US Jobless Claims and Manufacturing PMI data along with US-China trade updates for fresh impetus. The major finds strong support at 110-EMA at 108.61. Weakness only on decisive break below. Price action has retraced above 200-DMA (108.68). Scope for further gains as technical studies support upside.
Equities Recap
European stocks strong footing on Thursday's trade. At around 11:45 GMT, The Stoxx Europe 600 was up 0.78% at 419.42. The German DAX gained 0.68% to 13,348.94.
The French CAC 40 was up 1.00% at 6,037.75 and the U.K. FTSE 100 was up 0.84% at 7,605.46.
Commodities Recap
WTI slips lower on aggressive selling amid broad USD recovery. Focus remains on Friday’s EIA Crude Stocks data for next direction. WTI was trading at 61.17 at 12:00 GMT.
Golds extends gradual grind higher, hovers around three-month highs near $1525. Spot gold was up 0.10% at 1521.72 at around 12:00 GMT.
Treasuries Recap
U.S.: The U.S. Treasuries edged tad down during Thursday’s afternoon session ahead of the country’s weekly initial jobless claims data, scheduled to be released today by 13:30GMT and the December FOMC meeting minutes, also due today by 19:00GMT. The yield on the benchmark 10-year Treasury yield traded 1/2 basis point higher at 1.916 percent, the super-long 30-year bond yield also edged slightly higher to 2.382 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points up at 1.573 percent.
EUR: The German bunds remained flat during early European session Thursday after returning from a long year-end holiday, following Christmas and New Year, while the country’s manufacturing PMI for the month of December, edged tad higher than market expectations as well as the previous reading. The German 10-year bond yield, which move inversely to its price, hovered around -0.187 percent, the yield on 30-year note remained flat at 0.347 percent while the yield on short-term 2-year too remained steady at -0.599 percent.
