Market Roundup
• Britain's May to meet lawmakers in last-ditch Brexit deal bid.
• Pound briefly hits 2-mth high, braces for Brexit parliament vote.
• Trump predicts U.S. will reach trade deal with China.
• Hot labor market won't cause rapid rise in wages: SF Fed paper.
• U.S. inflation expectations stabilize after steady year -NY Fed.
• U.S. government shutdown drags into fourth week amid stalemate.
• Trump's Attorney General pick vows to shield Russia probe from politics.
• Basel eases capital hit from new trading book rules for banks.
• Oil falls 1 percent on concerns about China slowdown.
Looking Ahead - Economic Data (GMT)
• No major economic data scheduled
Looking Ahead - Events, Other Releases (GMT)
• 10:30 ECB Mario Draghi participates in meeting of the plenary of the European Parliament in Strasbourg
• 13:30 Philadelphia Fed issues historical revisions to its monthly Non-manufacturing Business Outlook Survey in Philadelphia
• 15:00 ECB President Mario Draghi addresses the European Parliament in Strasbourg
• 16:30 Minneapolis Fed’s Neel Kashkari speaks on the regional economy before the Rochester Economic Summit
• 17:30 Bank of Brazil Governor Illan Goldfajn speaks at Geneva's International Centre for Monetary and Banking Studies in Geneva
• 18:00 Dallas Fed’s Robert Kaplan participates in a session before the Plano Chamber of Commerce Annual Meeting in Texas
• 18:00 Kansas City Fed’s Esther George speaks on the economic and monetary policy outlook before The Central Exchange in Kansas City
Currency Summaries
EUR/USD: The euro edged lower against US dollar on Monday, as soft Chinese data sparked the sell-off in euro. Market sentiment swung negative after data showed that, China's exports unexpectedly fell in December, pointing to a further weakening of its economy and a gloomy growth picture. The euro was down 0.02 percent at $1.1466. An index that tracks the dollar versus a basket of six major currencies was down 0.07 at 95.60. Immediate resistance can be seen at 1.1507 (Ichimoku Cloud Top), an upside break can trigger rise towards 1.1560 (Higher Bollinger Band).On the downside, immediate support is seen at 1.1447 (9 DMA), a break below could take the pair towards 1.1409 (21 DMA).
GBP/USD: The British pound was steady against dollar on Monday, as markets seized onto Prime Minister Theresa May's warning that, failure to approve her Brexit deal could lead to Britain eventually staying in the European Union. The currency rallied to a high of $1.2926, up 0.3 percent on the day while against the euro it firmed 0.16 percent to stand at 89.16 pence by 2045 GMT, the highest since Dec. 5. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.2936 (38.2% retracement level), an upside break can trigger rise towards 1.2964 (Ichimoku Cloud Top).On the downside, immediate support is seen at 1.2849 (50% retracement level), a break below could take the pair towards 1.2790 (9 DMA).
USD/CAD: The Canadian dollar weakened to a 6-day low against its U.S. counterpart on Monday, reducing gains since the start of the year after data showing a drop in Chinese imports and exports raised fears of a slowdown in the global economy. Chinese exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world's second largest economy in 2019 and deteriorating global demand. The Canadian dollar traded 0.1 percent lower at 1.3274 to the greenback. Immediate resistance can be seen at 1.3327 (9 DMA), an upside break can trigger rise towards 1.3442 (21 DMA).On the downside, immediate support is seen at 1.3172 (100 DMA), a break below could take the pair towards 1.3123 (Nov 16th 2018 Low).
USD/JPY: The dollar declined against the Japanese yen on Monday, as weak Chinese trade data dented risk sentiment and rekindled fears of a global economic slowdown. Chinese exports fell by their most in two years in December, alongside a significant contraction in imports, data showed on Monday. That prompted a deceleration in global stock markets and highlighted fears of a sharper slowdown in global growth. The Japanese yen, a safe-haven currency that benefits in times of geopolitical turmoil, strengthened against the U.S. dollar by 0.33 percent. Strong resistance can be seen at 108.64 (11 DMA), an upside break can trigger rise towards 108.94 (50% retracement level).On the downside, immediate support is seen at 107.97 (Daily low), a break below could take the pair towards 107.64 (23.6% retracement level).
Equities Recap
China's surprisingly weak trade data brought a four-day rally in European shares to a halt on Monday, with luxury goods and technology stocks leading the drop as investors fretted about slowing global growth and weaker-than-expected earnings.
UK's benchmark FTSE 100 closed down by 1 percent, the pan-European FTSEurofirst 300 ended the day down by 0.62 percent, Germany's Dax ended down by 0.35 percent, France’s CAC finished the day down by 0.5 percent.
U.S. stocks declined on Monday as an unexpected drop in China's exports reignited worries of a global economic slowdown and prompted caution among investors as the corporate earnings season kicks off.
Dow Jones closed down by 0.38 percent, S&P 500 ended down by 0.54 percent, Nasdaq finished the day down by 0.95 percent.
Treasuries Recap
U.S. Treasury yields turned higher on Monday, after trading mostly lower, as risk sentiment improved after President Donald Trump said he was not looking to declare a national emergency amid a partial government shutdown.
The U.S. 10-year note yields rose to 2.706 percent, up from 2.699 percent late on Friday. U.S. 30-year bond yields, were also up at 3.053 percent, from 3.036 percent on Friday.
On the short end of the curve, U.S. 2-year yields were still slightly down on the day at 2.538 percent, compared with Friday's 2.545 percent.
Commodities Recap
Gold prices rose on Monday as global stocks fell on an unexpected drop in China's exports that signaled further weakening in the world's second-largest economy and prompted investors to seek safety in the precious metal.
Spot gold rose 0.4 percent to $1,291.40 per ounce at 2052 GMT, while U.S. gold futures settled 0.1 percent higher to $1,291.3.
Oil prices fell more than 2 percent on Monday, taking a pause after a recent rally, pressured by data showing weakening imports and exports in China that raised new worries about a global economic slowdown hurting crude demand.
Brent crude futures lost $1.49, or 2.5 percent, to settle at $58.99 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $1.08 to settle at $50.51 a barrel, a 2.1 percent loss.
