Market Roundup
• UK Parliament concludes and votes on PM May 's Brexit deal.
• Shutdown bites economy, U.S. Coast Guard as Washington talks stall.
• Fed's George turns dovish, makes case for 'pause' on rate hikes.
• Fed's Kashkari: Don't snuff out growth with rate hikes.
• Lighthizer saw no progress on U.S.-China key trade issues - Senator Grassley.
• Euro zone economy faces longer slowdown, not recession: ECB's Draghi .
• US Dec PPI Final Demand YY, 2.5%, 2.5% forecast, 2.5% previous.
• US Dec PPI Final Demand MM, -0.2%, -0.1% forecast, 0.1% previous.
• US Jan NY Fed Manufacturing, 3.90, 10.75 forecast, 10.90 previous, 11.50 revised.
• US 12 Jan w/e Redbook MM, -1.7%, 0.8% previous.
Looking Ahead - Economic Data (GMT)
• 15 Jan 23:50 Japan Nov Machinery Orders YY, 0.4% forecast, 4.5% previous
• 15 Jan 23:50 Japan Dec Corp Goods Price MM, -0.3% forecast, -0.3% previous
• 16 Jan 01:30 China Dec China House Prices YY, 9.3% previous
Looking Ahead - Events, Other Releases (GMT)
• 10:00 Bank of Greece Governor Yannis Stournaras speaks in Athens
• 17:30 French Central bank chief Francois Villeroy de Galhau speaks in Paris
• 19:00 Federal Reserve issues the Beige Book of economic condition Washington D.C.
Currency Summaries
EUR/USD: The euro declined against dollar on Tuesday after data showed, Germany's economy slowed in 2018.Europe's largest economy slowed to 1.5 percent in 2018, the German government reported on Tuesday. The German economy grew by 1.5 percent in 2018, the weakest rate in five years and markedly slower than the previous year, preliminary data showed on Tuesday, in a sign that exporters in Europe's largest economy are being hit by trade tensions. The euro was last trading down 0.52 percent at $1.1407. Immediate resistance can be seen at 1.1441 (11 DMA), an upside break can trigger rise towards 1.1472 (100 DMA).On the downside, immediate support is seen at 1.1312 (23.6% retracement level), a break below could take the pair towards 1.1302 (Lower Bollinger Bands).
GBP/USD: Sterling rebounded strongly against greenback on Tuesday after British lawmakers defeated Prime Minister Theresa May's Brexit divorce deal by a crushing margin on Tuesday. Parliament voted 432-202 against May's deal, the worst parliamentary defeat for a government in recent British history. The pound which was down as much as 1.2 percent before the outcome of the vote, briefly extended losses to fall 1.5 percent before rebounding sharply to stand down 0.4 percent on the day at $1.2823. Immediate resistance can be seen at 1.2736 (38.2% retracement level), an upside break can trigger rise towards 1.2887(100 DMA).On the downside, immediate support is seen at 1.2694 (21 DMA), a break below could take the pair towards 1.2616 (61.8% retracement level).
USD/CAD: The Canadian dollar edged higher against its broadly stronger U.S. counterpart on Tuesday as oil prices rebounded, while political upheaval in the UK dominated trading in the foreign exchange market. The price of oil rose after tumbling the previous session, although a darkening economic outlook may soon weigh on growth in fuel demand. The Canadian dollar was last trading 0.1 percent higher at 1.3272 to the greenback, or 75.35 U.S. cents. The currency, which on Monday touched its weakest level in nearly one week at 1.3297, traded in a range of 1.3227 to 1.3293. Immediate resistance can be seen at 1.3329 (10 DMA), an upside break can trigger rise towards 1.3434 (21 DMA).On the downside, immediate support is seen at 1.3227 (Daily low), a break below could take the pair towards 1.3152 (Lower Bollinger Band).
USD/JPY: The U.S. dollar strengthened against the yen on Tuesday, as negative external factors such as weak European data and concerns over the Brexit deal boosted greenback. British lawmakers defeated Prime Minister Theresa May's deal on withdrawing from the European Union. May's crushing loss, the first British parliamentary defeat of a treaty since 1864, marks the collapse of her two-year strategy of forging an amicable divorce maintaining close ties to the EU after the March 29 exit. The dollar was last trading 0.47 percent higher versus the Japanese yen at 108.66. Strong resistance can be seen at 108.78 (23.6% retracement level), an upside break can trigger rise towards 103.03 (21 DMA).On the downside, immediate support is seen at 108.33 (50% retracement level), a break below could take the pair towards 107.64 (61.8% retracement level).
Equities Recap
European shares rose on Tuesday after China signalled more stimulus measures to soften the blow from a tariff war with the United States, although fresh worries over bad loans hit Italian banks and uncertainty dominated by Brexit vote.
UK's benchmark FTSE 100 closed up by 0.65 percent, the pan-European FTSEurofirst 300 ended the day up by 0.48 percent, Germany's Dax ended up by 0.31 percent, France’s CAC finished the day up by 0.43 percent.
U.S. stocks rose on Tuesday as technology and internet stocks gained on Netflix Inc's plans to raise fees for U.S. subscribers and hopes of more stimulus for China's slowing economy fostered a risk-on mood among investors.
Dow Jones closed up by 0.64 percent, S&P 500 ended up 1.07 percent, Nasdaq finished the day up by 1.69 percent.
Treasuries Recap
U.S. Treasury yields edged higher in choppy trading on Tuesday on prospects for a resolution concerning Britain's exit from the European Union despite being rejected by British lawmakers.
U.S. 30-year bond yields rose to 3.075 percent, from 3.06 percent on Monday. Thirty-year yields climbed to as high as 3.08 percent, a four-week peak.
On the short end of the curve, U.S. 2-year yields were modestly lower on the day at 2.53 percent, compared with Monday's 2.535 percent .
Commodities Recap
Gold eased on Tuesday as the dollar rose and stock markets climbed, but further losses were capped by concerns over slowing economic growth and prospects of a pause in U.S. interest rate hikes.
Spot gold fell 0.14 percent to $1,289.18 per ounce by (2115 GMT), while U.S. gold futures also shed 0.18 percent to $1,289.18.
Oil prices rose about 3 percent on Tuesday, along with world stock markets, supported by China's plan to introduce policies to stabilize a slowing economy, reversing the previous session's losses due to grim data in the world's second-largest economy.
Brent crude rose $1.65, or 2.8 percent, to settle at $60.64 a barrel. U.S. crude futures ended $1.60, or 3.2 percent, higher at $52.11 a barrel.
