Market Roundup
• Trump renews dig at Fed, expresses longing for lower interest rates.
• U.S.-China trade talks to continue for third day -U.S. officials.
• Trump to highlight border 'crisis,' seek wall support in televised address.
• Dollar rallies at euro's expense, but outlook still bleak.
• UK PM May defeated in parliament, lawmakers create new obstacle to no-deal Brexit.
• ECB rate hike now unlikely before mid-2020, money markets bet.
• US Nov JOLTS Job Openings, 6.888 mln, 7.063 mln forecast, 7.079 mln previous, 7.131 mln revised.
• US 5 Jan, w/e Redbook YY, 8.9%, 9.3% previous.
• US 5 Jan, w/e Redbook MM, 0.8%, 0.6% previous.
• CA Nov Trade Balance C$, -2.06 bln, -1.95 bln forecast, -1.17 bln previous, -0.85 bln revised.
• Goldman Sachs analysts slash U.S. Treasury yield forecasts..
• Oil prices rise more than 2 pct on trade talks
Looking Ahead - Economic Data (GMT)
• 8 Jan 21:30 Australia Dec AIG Services Index, 55.1 previous
• 9 Jan 00:30 Australia Nov Building Approvals, -0.5% forecast, -1.5% previous
Looking Ahead - Events, Other Releases (GMT)
• 08:30 Swedish Central Bank minutes from the monetary policy will be published in Stockholm
• 14:00 Chicago Fed's Evans speaks on current economic conditions and monetary policy at a meeting in Riverwoods, Illinois
• 13:20 Atlanta Fed's Bostic speaks before the Chattanooga Chamber of Commerce in Chattanooga, Tennessee
• 15:00 Bank of Canada key policy interest rate announcement and monetary policy report in Ottawa
• 15:30 BoE Governor Carney participates in a live online Q&A session in London
• 16:30 Boston Fed's Rosengren speaks before the Boston Economic Club in Boston
• 19:00 Federal Open Market Committee will release the minutes from its December 18-19, 2018 policy meeting in Washington D.C.
• 16:15 Bank of Canada's Poloz and Wilkins hold a press conference on the monetary policy report in Ottawa
Currency Summaries
EUR/USD: The euro strengthened against the U.S. dollar on Monday, as single currency was buoyed by hints of progress in trade talks between China and the United States. The euro was up 0.01 percent at $1.1446. An index that tracks the dollar versus a basket of six major currencies was down 0.23 at 96.17 on Monday. Immediate resistance can be seen at 1.1475 (100 DMA), an upside break can trigger rise towards 1.1514 (Ichimoku cloud top).On the downside, immediate support is seen at 1.1401 (9 DMA), a break below could take the pair towards 1.1351 (26th Dec Low).
GBP/USD: Britain's pound gained against the dollar on Monday, as expectations faded for U.S. interest rate increases, with sterling leading the gains. The pound rose 0.37 percent, supported by broad-based gains in stocks and hopes for a resolution of the trade dispute between the United States and China. Immediate resistance can be seen at 1.2795 (Higher Bollinger Bands), an upside break can trigger rise towards 1.2889 (100 DMA).On the downside, immediate support is seen at 1.2659 (9 DMA), a break below could take the pair towards 1.2600 (Psychological Level).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Monday, as investors were cautious in thin-volume trade mainly due U.S. politics and the tariff war between Beijing and Washington. The Canadian dollar was last trading at 1.3599 to the greenback. For the year, the loonie was down 7.7 percent, its first decline since 2015. Immediate resistance can be seen at 1.3700 (Psychological Level), an upside break can trigger rise towards 1.3779 (May 1st 2017 High).On the downside, immediate support is seen at 1.3576(9 DMA), a break below could take the pair towards 1.3426 (21 DMA).
USD/JPY: The dollar declined against Japanese yen on Monday, as tensions over a trade dispute between the United States and China increased demand for safe-haven yen. China and the United States have been in a trade war for much of 2018, shaking world financial markets as the flow of hundreds of billions of dollars’ worth of goods between the world's two largest economies has been disrupted by tariffs.The dollar was 0.01 lower versus the Japanese yen at 109.63. Strong resistance can be seen at 110.54 (38.2% retracement level), an upside break can trigger rise towards 111.13 (9 DMA).On the downside, immediate support is seen at 109.69 (23.6% retracement level), a break below could take the pair towards 108.70 (June 1st 2018 Low).
Equities Recap
European shares closed slightly higher on Monday as soothing comments from Washington and Beijing about trade frictions between the world's top two economies provided some comfort for investors as a bruising year in equity markets drew to a close.
France's CAC 40 was up 1.1 percent, Spain's IBEX was up 0.5 percent while Britain's FTSE 100 was dragged lower by a stronger pound.
Wall Street advanced in low-volume trading on Monday as revelers gathered to ring in 2019, marking the end of the worst year for U.S. stocks since 2008, the height of the financial crisis.
Dow Jones closed up by 1.13 percent, S&P 500 ended up by 0.84 percent, Nasdaq finished the day up by 0.75 percent.
Treasuries Recap
U.S. Treasuries edged higher in a quiet session on Monday, ending a year in which the yield curve reached its flattest since 2007.
The two-year note yield rises with traders' expectations of interest rate hikes. The spread between two- and 10-year note yields, the most common measure of the yield curve, was its flattest since 2007, closing the year out around 19.5 basis points.
Commodities Recap
Gold traded near a more than six-month peak hit early on Monday but was headed for its first annual decline since 2015, having lost this year to dollar strength due to trade tensions and rising interest rates by the U.S. Federal Reserve.
Spot gold was up 0.1 percent at $1,279.89 an ounce at (2220 GMT). It hit its highest since June 15 at $1,284.09 earlier in the session. U.S. gold futures settled down 0.1 percent at $1,281.30 per ounce.
Oil prices ended with full-year losses for the first time since 2015, after a desultory fourth quarter that saw buyers flee the market over growing worries about a supply glut and mixed signals related to renewed U.S. sanctions on Iran.
For the year, U.S. West Texas Intermediate crude (WTI)futures slumped nearly 25 percent, while Brent tumbled more than 19.5 percent.
