Europe Roundup: Sterling recovers as traders wait for data cues on BoE rate cut, European shares edge higher, Gold inches down, Oil rises after U.S.-China deal, IEA forecast limits gains-January 16th, 2020

Market Roundup
 
• Irish Dec CPI (YoY) 1.3%,1.1% previous

• Irish Dec  CPI (MoM)  0.2%,-0.1% previous

• Irish Dec  HICP (MoM)  0.2%, -0.2% previous

• Irish Dec HICP (YoY)  1.1%,0.8% previous

Looking Ahead - Economic Data (GMT) 
   
• 13:00 Russia Central Bank Reserves (USD) 549.8B previous

• 13:30 US Continuing Jobless Claims 1,720K, 1,803K previous

• 13:30 US Dec Core Retail Sales (MoM)  0.5%,0.1% previous

• 13:30 US Export Price Index (YoY) -1.3% previous    

• 13:30 US Import Price Index (YoY)  -1.3% previous

• 13:30 US Initial Jobless Claims 216K forecast, 214K previous

• 13:30 US Jobless Claims 4-Week Avg 224.00K previous

• 13:30 US Jan Philadelphia Fed Manufacturing Index  3.8 forecast, 2.4 previous

• 13:30 US Dec Retail Sales (MoM)  0.3% forecast , 0.2% previous
    
• 13:30 Canada ADP Nonfarm Employment Change 30.9K previous
    
• 13:30 US Nov Business Inventories (MoM)  -0.1%,0.2% previous

• 13:30 US Jan NAHB Housing Market Index  74 forecast, 76 previous

• 13:30 US Nov Retail Inventories Ex Auto  -0.2% previous

Looking Ahead - Events, Other Releases (GMT)

• 18:00 ECB President Lagarde Speech
        
Currency Summaries

EUR/USD: The euro edged high against the U.S. dollar on Thursday, after the United States and China signed the first phase of an agreement to end their 18-month trade war. The deal signed by U.S. President Donald Trump and Chinese Vice Premier Liu He will roll back only some of tariffs that the two sides have been imposing on each other. The rest remain in place for what looks to be another tricky phase of talks. The euro was up 0.07 percent at $1.1157. An index that tracks the dollar versus a basket of six major currencies was down 0.04 at 97.17 on Monday. Immediate resistance can be seen at 1.1164 (Daily High), an upside break can trigger rise towards 1.1213 (Higher BB).On the downside, immediate support is seen at 1.1138 (9 DMA), a break below could take the pair towards 1.1100 (Psychological level).

GBP/USD: Sterling edged higher on Thursday, hitting its best level of the week as investors paused the ramping-up of bets on the Bank of England cutting interest rates later this month.The British currency fell sharply earlier this week after another BoE policymaker said he would vote for a rate cut unless economic data improved significantly. Traders are now preparing for December retail sales data due on Friday, followed by purchasing managers’ index (PMI) surveys next week. Evidence that Britain economy’s failed to improve after the general election on Dec. 12 will likely raise expectations for a rate cut and knock sterling lower.Immediate resistance can be seen at 1.3063 (11 DMA), an upside break can trigger rise towards 1.3194 (Higher BB).On the downside, immediate support is seen at 1.3020 (50 DMA), a break below could take the pair towards 1.2913 (Lower BB).

USD/CHF: The dollar was little changed against the Swiss franc on Thursday, after signing of the Phase 1 trade deal between the United States and China, since most of the issues agreed upon had been expected and the threat of tariffs was not eliminated. Yet market enthusiasm was checked, because much of the agreement was priced in and it addressed few of the issues that led to the conflict in the first place. At (GMT 12:25), Greenback fell 0.12% versus the Swiss franc to 0.9628. Immediate resistance can be seen at 0.9673 (5 DMA), an upside break can trigger rise towards 0.9698 (11 DMA).On the downside, immediate support is seen at 0.9619 (Lower BB), a break below could take the pair towards 0.9600 (Psychological level).

USD/JPY: The dollar was little changed against the Japanese yen on Thursday, after the United States and China signed an initial deal to defuse their 18-month trade war, though financial markets were wary as a number of thorny issues remained unresolved. U.S. President Donald Trump and Chinese Vice Premier Liu He on Wednesday signed a deal that will roll back some tariffs and see China boost purchases of U.S. goods and services by $200 billion over two years. The dollar was last up 0.07% at 109.97 yen . Strong resistance can be seen at 110.23 (Jan 9thhigh), an upside break can trigger rise towards 110.64 (May 22nd High).On the downside, immediate support is seen at 109.83 (5 DMA), a break below could take the pair towards 109.40 (9 DMA). 

Equities Recap

European shares gained ground on Thursday after the United States and China signed an eagerly awaited Phase 1 trade deal, but some questions still remained over certain key issues.

At (GMT 12:34),UK's benchmark FTSE 100 was last trading lower at 0.50 percent, Germany's Dax was down by 0.18 percent, France’s CAC was last down by 0.15 percent

Commodities Recap

Gold prices edged lower on Thursday, as optimism over a preliminary trade deal between the United States and China increased risk appetite, although concerns about tariffs and unresolved core issues remained.

Spot gold fell 0.2% to $1,552.22 per ounce by 0619 GMT. U.S. gold futures eased 0.1% to $1,552.60.

Oil prices rose on Thursday after the United States and China signed an eagerly awaited Phase 1 trade deal, giving some relief to markets, but gains were capped as the International Energy Agency said it expected oil production to outstrip demand.

Brent  was 36 cents, or 0.6%, higher at $64.36 a barrel by 0941 GMT, while U.S. crude was up by 22 cents, or 0.4%, at $58.03 a barrel.

Treasuries Recap    

U.S.: The U.S. Treasuries remained flat during Thursday’s afternoon session ahead of the country’s retail sales for the month of December, scheduled to be released today by 13:30GMT and FOMC member Bowman’s speech, also due today by 15:00GMT. In addition, the Philly Fed manufacturing index for January, lined up for release today by 13:30GMT shall provide further direction to the debt market. The yield on the benchmark 10-year Treasury yield remained flat at 1.788 percent, the super-long 30-year bond yield hovered around 2.245 percent and the yield on the short-term 2-year also steadied at 1.562 percent.

EUR: The German bunds gained during European trading session Thursday ahead of the European Central Bank’s account of its December monetary policy meeting, scheduled to be released today by 12:30GMT, followed by President Christine Lagarde’s speech, also due to be delivered today by 18:00GMT. The German 10-year bond yield, which moves inversely to its price, slipped nearly 1 basis point to -0.213 percent, the yield on 30-year note remained tad down at 0.299 percent and the yield on short-term 2-year too traded 1/2 basis point lower at -0.599 percent.

AUS: The Australian bonds gained during Asian session Thursday, tracking a similar movement in the U.S. Treasuries as investors shrugged-off the signing of Phase 1 trade deal between China and the United States, trying to read beyond the lines. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2-1/2 basis points to 1.181 percent, the yield on the long-term 30-year bond plunged nearly 3-1/2 basis points to 1.790 percent and the yield on short-term 2-year lost nearly 2 basis points to 0.784 percent.