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America’s Roundup: Dollar gains as U.S.-Iran fears ease ,Wall Street ends lower, Gold edges up, Oil falls 1% as investors reassess Middle East risks-January 8th,2020

Market Roundup

• Brazil Dec Auto Production (MoM)  25.0%, -21.2% previous

• Brazil Dec Auto Sales (MoM)  8.4%, -4.4% previous

• US Exports 209.00B, 207.00B previous

• US Imports 252.00B, 254.00B previous                 
• US Nov Trade Balance -43.10B, -43.80B forecast, -46.90B previous          

• Canada Nov Exports 48.70B, 49.30B forecast ,49.40B previous   

• Canada Nov Imports 49.78B, 51.02B forecast, 51.00B previous   

• Canada Nov Trade Balance -1.09B, -1.15B forecast, -1.61B previous       

• US Redbook (MoM) -2.6%,-2.8% previous

• US Redbook (YoY) 7.2%, 7.8% previous               

• New Zealand GlobalDairyTrade Price Index 2.8%, -5.1% previous               

• US Nov Durables Excluding Defense (MoM) 0.7%, 0.8% previous            

• US Nov Factory Orders (MoM) -0.7%,-0.8% forecast, 0.2% previous

• US Nov Factory orders ex transportation (MoM) 0.3%,0.3% previous

• US Dec ISM Non-Manufacturing Business Activity 57.2, 52.0 forecast, 51.6 previous

• US Dec ISM Non-Manufacturing Employment 55.2, 55.5 previous

• US Dec ISM Non-Manufacturing New Orders 54.9, 57.1 previous

• US Dec ISM Non-Manufacturing PMI 55.0, 54.5 forecast, 53.9 previous

• Canada Dec Ivey PMI n.s.a  43.6, 58.4 previous

• Canada Dec Ivey PMI 51.9, 53.8 forecast, 60.0 previous                                                                                                                  Looking Ahead - Economic Data (GMT)

• 23:30 Japan Nov Average Cash Earnings (YoY) 0.5% previous            

• 23:30 Japan Nov Overall wage income of employees   0.5%

• 23:30 Japan Nov Overtime Pay (YoY) -0.10% previous         

• 00:30 Australia Nov Building Approvals (MoM) 2.1% forecast,-8.1% previous

• 00:30 Australia Nov Private House Approvals -7.0% previous

• 05:00 Japan Dec Household Confidence 39.6, 38.7 previous        

Looking Ahead - Events, Other Releases (GMT)      

• No significant events.

Currency Summaries

EUR/USD: The euro declined against the U.S. dollar on Tuesday, as investors cautiously warmed to riskier assets with few signs of a further immediate escalation in tensions between the United States and Iran.Market players around the globe also reassessed the risk of an all-out conflict between the two countries after the killing of Tehran’s top general in a U.S. air strike on Friday set off a bout of risk aversion. Investors are now looking forward to the signing of a Phase 1 trade deal between the United States and China on January 15, after the cooling of trade tensions between both sides earlier last month helped boost demand for riskier emerging market assets. The euro was last trading down at  0.48 percent at $1.1142. Immediate resistance can be seen at 1.1181 (5 DMA), an upside break can trigger rise towards 1.1206 (Jan 6th high).On the downside, immediate support is seen at 1.1131 (5 DMA), a break below could take the pair towards 1.1100 (Psychological level).

GBP/USD: The British slipped lower against dollar on Tuesday, as the dollar rose, with investors watching British lawmakers’ return to parliament after the Christmas recess in preparation to vote on Prime Minister Boris Johnson’s European Union (EU) withdrawal deal. The U.S. dollar has recovered some ground amid market relief that the situation in the Middle East has not deteriorated further. Participants were closely watching for signs of Iranian retaliation after Iranian Major-General Qassem Soleimani was killed in a U.S. drone strike on his convoy at Baghdad airport.Immediate resistance can be seen at 1.3141 (5 DMA), an upside break can trigger rise towards 1.3217 (Daily  high).On the downside, immediate support is seen at 1.3070 (11 DMA), a break below could take the pair towards 1.3000 (Psychological level).

USD/CAD: The Canadian dollar weakened to a one-week low against its U.S. counterpart on Tuesday, as oil prices fell on reduced worries about Middle East tensions and domestic data showed a decrease in both exports and imports. Canada posted a trade deficit of C$1.09 billion in November, official data showed, as a strike at the country's biggest railway temporarily slowed shipments nationwide and energy exports declined. Oil prices surrendered some gains made over the previous days as investors reconsidered the likelihood of immediate supply disruptions in the Middle East after the United States killed a top Iranian military commander. U.S. crude oil futures were down 0.9% at $62.71 a barrel. Immediate resistance can be seen at 1.3031 (Daily High), an upside break can trigger rise towards 1.3058 (11 DMA).On the downside, immediate support is seen at 1.2957 (Daily low), a break below could take the pair towards 1.2900 (Psychological level).

USD/JPY: The dollar strengthened against the Japanese yen on Tuesday, as investors became less anxious about the chances of an all-out conflict between the United States and Iran. The safe-haven yen fell from a three-month high versus the dollar, although sentiment remains fragile due to continued worries about a further deterioration in relations between the U.S. and Iran. A U.S. drone strike in Baghdad on Friday killed Iranian military commander Qassem Soleimani, widely seen as Iran’s second most powerful figure. Strong resistance can be seen at 108.95 (11 DMA), an upside break can trigger rise towards 109.49 (Dec 31st high).On the downside, immediate support is seen at 108.19 (100 DMA), a break below could take the pair towards 108.00 (Psychological level).

Equities Recap

European shares rebounded on Tuesday, snapping a two-day losing streak as concerns over a U.S.-Iran standoff eased, while technology stocks tracked their Wall Street peers higher.

The UK's benchmark FTSE 100 closed down by 0.02 percent, Germany's Dax ended up by 0.76 percent, and France’s CAC finished the up  by 0.02 percent.

Wall Street’s main indexes fell on Tuesday, dragged down by oil and healthcare stocks as investors nervously awaited further developments on the U.S.-Iran conflict.

Dow Jones closed down by 0.32 percent, S&P 500 ended down at 0.18 percent, Nasdaq finished the up by 0.08 percent.

Treasuries Recap

Yields were stable on Tuesday, little changed across maturities after mixed U.S. data, while 10-year Treasury Inflation Protected Securities real yields moved back above zero and five-year TIPS held at negative levels.

The two-year yield, which reflects market forecasts for interest rates, was 0.1 basis point lower at 1.547%.

Five-year TIPS real yields remained in negative territory for the fourth trading day, falling on Jan. 3 to the lowest level since April 2017. Meanwhile, 10-year TIPS traded above zero after going negative on Jan. 3 for the first time since September 2019.

Commodities Recap

Gold prices retreated on Tuesday from near seven-year highs reached in the previous session as investors took profits in the absence of new developments in the tense situation between the United States and Iran.

Spot gold was down 0.1% at $1,564.31 per ounce as of 1257 GMT, having fallen as much as 0.7% earlier in the session. It touched its highest since April 2013 at $1,582.59 on Monday.U.S. gold futures were 0.2% lower at $1,566.00.

Oil prices fell almost 1% on Tuesday, surrendering some recent gains as investors reconsidered the likelihood of immediate supply disruptions in the Middle East after the United States killed a top Iranian military commander last week.

Brent crude   fell 64 cents, or 0.93%, to settle at $68.27 a barrel. U.S. West Texas Intermediate (WTI) crude  fell 57 cents, or 0.9%, to settle at $62.70 a barrel.

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