Market Roundup
- EUR/USD -0.17%, USD/JPY 0.42%, GBP/USD -0.10%, EUR/GBP -0.09%
- DXY 0.21%, DAX 1.17%, FTSE 0.34%, Brent -0.82%, Gold -0.41%
- EZ Inflation, Flash YY Dec, 1.4%, 1.4% forecast, 1.5% previous
- EZ Inflation Ex Food & Energy Flash Dec, 1.1%, 1.0% forecast, 1.1% previous
- EZ Producer Prices MM Nov, 0.6%, 0.3% forecast, 0.4% previous
- EZ Producer Prices YY Nov, 2.8%, 2.5% forecast, 2.5% previous
- Germany Retail Sales YY Real Nov, 4.4%, 2.5% forecast, -1.4% previous
- France Consumer Confidence Dec, 105, 103 forecast, 102 previous
- France CPI (EU Norm) Prelim YY Dec, 1.3%, 1.2% forecast, 1.2% previous
- Italy Consumer Prices Prelim YY Dec, 0.9%, 0.9% previous
- UK economic productivity up by most since 2011 in Q3 2017
- China Dec data to show economic growth slowly cooling but still solid
- Thai c. bank ready to intervene if baht moves too fast, affects private sector
- Oil slips away from 2015 highs as doubts emerge over rally
- Gold dips ahead of US jobs data but set for 4th week of gains
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of December. The report is likely to show 190,000 jobs were added compared with an increase of 228,000 in November.
- (0830 ET/1330 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of December. The rate stood at 62.7 percent in the previous month.
- (0830 ET/1330 GMT) The U.S. Labor Department is expected to report that unemployment rate remained steady at 4.1 percent in December.
- (0830 ET/1330 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in December after climbing 0.2 percent in the month before.
- (0830 ET/1330 GMT) The United States releases trade balance figures for the month of November. The economy's trade deficit is expected to have widened to $49.5 billion from 48.7 billion in October.
- (0830 ET/1330 GMT) The Statistics Canada is likely to report that international trade deficit narrowed to C$1.20 billion in November from C$1.47 billion in October.
- (0830 ET/1330 GMT) The Statistics Canada releases employment report for December. The economy is likely to have added 1,000 jobs, compared to a rise of 79,500 jobs in November, while the participation rate stood at 65.7 percent in the same month.
- (0830 ET/1330 GMT) Canada's unemployment rate is expected to edge up 6.0 percent in December from 5.9 percent in the previous month.
- (1000 ET/1500 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index rose to a final reading of 57.6 in December from 57.4 in November.
- (1000 ET/1500 GMT) The United States is likely to report that factory orders increased 1.1 percent in November after posting a fall of 0.1 percent in the prior month.
- (1000 ET/1500 GMT) The Richard Ivey School of Business releases Canada's seasonally adjusted Ivey Purchasing Managers Index for the month of December. The index posted a reading of 63.0 in the prior month.
- (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (1015 ET/1515 GMT) Philadelphia Fed President Patrick Harker speaks on the economic outlook before "The United States and Global Economic Outlook" panel at the 2018 ASSA/American Economic Association Annual Meeting in Philadelphia.
- (1145 ET/1645 GMT) FedTrade operation 30-year Ginnie Mae (max $1.295 bn)
- (1230 ET/1730 GMT) Cleveland Fed chief Loretta Mester participates in panel, "Coordinating Conventional and Unconventional Monetary Policies for Macroeconomic Stability" before the 2018 ASSA/American Economic Association Annual Meeting in Philadelphia.
- (1430 ET/1930 GMT) BoE Chief Economist Andy Haldane: Chairing panel sessions at the Allied Social Sciences Association Annual Meeting in Philadelphia.
FX Beat
DXY: The dollar index steadied just above near four-month lows ahead of crucial U.S. non-farm payroll numbers. The greenback against a basket of currencies traded 0.2 percent at 92.04, having touched a low of 91.75 on Tuesday, its lowest since Sept. 20. FxWirePro's Hourly Dollar Strength Index stood at 9.38 (Neutral) by 1000 GMT.
EUR/USD: The euro declined, reversing some of its previous session gains on some expectations that European policymakers may initiate withdrawing stimulus policies earlier than previously forecasted. The European currency traded 0.2 percent down at 1.2044, having touched a high of 1.2088 on Thursday, its highest since Sept. 8. FxWirePro's Hourly Euro Strength Index stood at 35.83 (Neutral) by 0900 GMT. The near-term is around 1.2045 (10- 4H MA) and any break below will drag the pair down till 1.2013 (4H Kijun-Sen)/1.1971 (55- 4H EMA)/1.1940/1.1900. On the higher side, near-term resistance is around 1.20920 and any break below will take it till 1.2112 (161.8% fib)/1.21850/1.2297 (138.2% fib).
USD/JPY: The dollar rallied to a 1-week peak above the 113.00 handle, as markets focus shifted on the U.S. non-farm payrolls report, which is expected to show job gains of 190,000 for December. The major was trading 0.4 percent up at 113.20, having hit a high of 113.23 earlier, its highest since Dec. 28. FxWirePro's Hourly Yen Strength Index stood at -82.03 (Slightly Bearish) by 1000 GMT. It is trading slightly above trend line resistance at 113.25 and any break above will take the pair to next level till 113.63/114. The minor weakness can be seen below 200 4H EMA at 112.76 and any break below will take it to next level till 112.50/112.
GBP/USD: Sterling eased after Reuters poll showed the British pound is set to mostly hold steady against both the dollar and the euro this year, but much will depend on progress in Britain's talks with Brussels on its withdrawal from the European Union. The major traded 0.1 percent up at 1.3533, having hit a high of 1.3612 on Wednesday; it’s highest since Sept. 20. FxWirePro's Hourly Sterling Strength Index stood at -80.91 (Slightly Bearish) by 1000 GMT. On the lower side, near-term support is around 1.347 (200- H MA) and any break below will drag the pair to next level till 1.3430/1.34020 (61.8% retracement). The near-term resistance is around 1.3600 and any break above will take it to next level till 1.3655/1.3700. Against the euro, the pound was trading 0.1 percent up at 88.98 pence, having hit a high of 88.48 pence on Wednesday, it’s highest since Dec. 22.
USD/CHF: The Swiss franc slumped, giving up almost all of its previous session gains as the greenback rebounded ahead of the release of the first U.S. Nonfarm payroll in 2018. The major trades 0.4 percent down at 0.9769, having touched a low of 0.9699 on Tuesday, it’s lowest since Jan. 2. FxWirePro's Hourly Swiss Franc Strength Index stood at -112.21 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9800 and any break above will take the pair to next level till 0.9865/0.9900/0.9970 (Dec 8th, 2017 high)/1.000. The near-term support is around 0.9705 and any close below that level will drag it to next level till 0.9635/0.9600.
AUD/USD: The Australian dollar tumbled after rising for thirteen consecutive sessions, as the economy posted a trade deficit of A$628 million for November as against a surplus of A$915 million expected and A$105 million surplus reported in the previous month. The Aussie trades 0.1 percent down at 0.7849, having hit a high of 0.7869 earlier; it’s highest since Oct. 20. FxWirePro's Hourly Aussie Strength Index stood at 128.39 (Highly Bullish) by 1000 GMT. On the lower side, the near term support is around 0.7818 (4H Kijun-Sen) and any convincing break below will drag the pair till 0.7770 (55- 4H EMA)/0.7692. The near-term resistance is around 0.7900 and any convincing break above targets 0.7950/0.8000.
Equities Recap
European stocks rallied, with the British and Swiss benchmarks hitting record highs, while the greenback steadied ahead of crucial U.S. non-farm payroll report.
The pan-European STOXX 600 index advanced 0.5 percent to 395.58 points, while the FTSEurofirst 300 index rallied 0.5 percent to 1,555.18 points.
Britain's FTSE 100 trades 0.2 percent higher at 7,714.10 points, while mid-cap FTSE 250 gained 0.2 percent to 20,858.47 points.
Germany's DAX rose 0.7 percent at 13,265.84 points; France's CAC 40 trades 0.6 percent up at 5,447.46 points.
Commodities Recap
Crude oil prices declined, hovering away from highs last seen in 2015, as increasing U.S. production undermined prices. International benchmark Brent crude was trading 0.6 percent up at $67.55 per barrel by 0936 GMT, having hit a high of $68.25 the day before, its highest since May 2015. U.S. West Texas Intermediate was trading 0.6 percent higher at $61.50 a barrel, after rising as high as $62.18 on Thursday, its highest since May 2015.
Gold prices slumped from the previous session's 3-1/2 month high but remained on track for their fourth straight weekly gain ahead of U.S. non-farm payroll data. Spot gold was down 0.4 percent at $1,317.23 an ounce at 0937 GMT, after touching its highest since Sept. 15 at $1,325.79 on Thursday. U.S. gold futures were down 0.2 percent at $1,319.10 an ounce.
Treasuries Recap
The U.S. Treasuries neutralized on the last trading day of the week as investors await the country’s employment report for the month of December, scheduled to be released today at 13:30GMT. The yield on the benchmark 10-year Treasuries rose nearly 1 basis point to 2.46 percent, the super-long 30-year bond yields flat at 2.79 percent and the yield on the short-term 2-year hovered around 1.96 percent.
The UK gilts gained amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year gilts, slipped 1 basis point to 1.22 percent, the super-long 30-year bond yields fell nearly 1 basis point to 1.77 percent and the yield on the short-term 2-year traded flat at 0.49 percent.
The German bunds traded flat after the Eurozone’s consumer price-led inflation index for the month of December met market expectations at 1.4 percent y/y, albeit down from prior 1.5 percent y/y. The German 10-year bond yields, which move inversely to its price, hovered around 0.43 percent, the yield on 30-year note also steadied around 1.25 percent and the yield on short-term 2-year traded flat at -0.61 percent.
The New Zealand government bonds rallied at the time of closing on continuing signal from a subdued dairy supply outlook despite an improvement in the global dairy prices at the country’s latest GlobalDairyTrade Price auction held lately. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 1-1/2 basis points to 2.79 percent, the yield on 20-year slipped 1 basis point to 3.23 percent and the yield on short-term 2-year ended nearly flat at 1.95 percent.
The Japanese government bonds traded sideways on the last trading day of the week as investors refrained from any major trading activity amid a muted session that witnessed no data of major economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.05 percent, the yield on long-term 30-year also traded nearly flat at 0.81 percent and the yield on short-term 2-year steadied at -0.13 percent
The Australian government bonds rallied following worse-than-expected trade balance data for December, which turned negative, lowering the investors risk sentiments. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 3-1/2 basis points to 2.625 percent, the yield on the long-term 30-year note dipped 2-1/2 basis points to 3.333 percent and the yield on short-term 2-year down 6 basis points to 1.907 percent.
