Market Roundup
- 'Get a grip on Brexit', businesses tell UK's quarrelling politicians
- Ireland says 'no change' to Brexit backstop
- Britain's May privately told ministers she will rule out no deal Brexit -The Sun
- Trump doubts lawmakers can reach acceptable border security deal
- BOJ minutes show disagreement over level of bond yields
- U.S. lifts sanctions on Rusal, other firms linked to Russia's Deripaska
- China Dec Industrial profit YTD, 10.3%, 11.8% prev
- China Dec Industrial profit YY, -1.90%, -1.80% prev
Economic Data Ahead
- (0400 ET/0900 GMT) EZ Dec Money-M3 Annual Growth, 3.8% f'cast, 3.7% prev
- (0400 ET/0900 GMT) EZ Dec Loans to Non-Fin, 4.0% prev
Key Events Ahead
- N/A ECB's Ewald Nowotny and other central bankers attend fintech conference
- (0630 ET/1130 GMT) Riksbank's Kerstin af Jochnick speaks on forthcoming normalization of monetary policy - Stockholm
- (0900 ET/1400 GMT) Introductory statement by ECB's Mario Draghi at ECON Hearing of the European Parliament - Brussels
- (1030 ET/1530 GMT) Fed Dallas's issues January Manufacturing Outlook Survey - Dallas
FX Beat
DXY: The dollar index plunged to a near 2-week low on speculation that Federal Reserve Chairman Jerome Powell will take a more cautious approach on further monetary tightening at the FOMC meeting between Jan 29-30. The greenback against a basket of currencies trades down at 95.79, having touched a low of 95.67, its lowest since Jan. 15. FxWirePro's Hourly Dollar Strength Index stood at -54.61 (Bearish) by 0600 GMT.
EUR/USD: The euro rallied to a near 2-week peak as the greenback slumped on expectations Fed will keep rates steady this year given the state of economic growth outside the U.S. The European currency traded 0.1 percent up at 1.1411, having touched a high of 1.1425, its highest since Jan. 15. FxWirePro's Hourly Euro Strength Index stood at -23.24 (Neutral) by 0600 GMT. Investors’ attention will remain on a series of data from the Eurozone M3 money supply and ECB President Draghi's speech, ahead of the U.S. Dallas Fed Manufacturing business index. Immediate resistance is located at 1.1442 (December 10 High), a break above targets 1.1484 (December 4 High). On the downside, support is seen at 1.1370 (Jan. 17 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar slumped to a 6-day low, as investors turned their attention to this week's Federal Reserve policy meeting, where policymakers are likely to signal a pause in their tightening, while Chairman Jerome Powell in the presser is widely expected to acknowledge growing risks to the U.S. economy as global momentum weakens. The major was trading 0.2 percent down at 109.34, having hit a low of 109.26, its lowest since January 22. FxWirePro's Hourly Yen Strength Index stood at 23.66 (Neutral) by 0600 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Dallas Fed Manufacturing business index. Immediate resistance is located at 109.88 (Jan. 18 High), a break above targets 110.47 (Dec. 31 High). On the downside, support is seen at 108.70 (Jan. 2 Low), a break below could take it lower at 108.44 (Jan. 8 Low).
GBP/USD: Sterling steadied near a near 3-1/2 month peak touched in the previous session, on growing optimism that Britain will avoid a no-deal Brexit. On Friday, a newspaper report that hat Northern Ireland's Democratic Unionist Party had privately decided to offer conditional backing for British Prime Minister Theresa May's Brexit deal. The major traded flat at 1.3192, having hit a high of 1.3217 on Friday; it’s highest since October 16. FxWirePro's Hourly Sterling Strength Index stood at 51.43 (Bullish) 0600 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3257 (October 12 High), a break above could take it near 1.3298 (September 20 High). On the downside, support is seen at 1.3082 (October 15 Low), a break below targets 1.3021 (November 6 Low). Against the euro, the pound was trading 0.1 percent down at 86.49 pence, having hit a high of 86.16, it’s highest since May 2017.
AUD/USD: The Australian dollar advanced to a 10-day peak despite domestic financial markets shut for their 'Australia Day' holiday. The Aussie trades 0.2 percent up at 0.7190, having hit a high of 0.7203 earlier; it’s highest since January 18. FxWirePro's Hourly Aussie Strength Index stood at -10.18 (Neutral) by 0600 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7139 (Jan. 21 Low), a break below targets 0.7085 (December 20 Low). On the upside, resistance is located at 0.7246 (December 13 High), a break above could take it near 0.7300 (November 20 High).
NZD/USD: The New Zealand dollar climbed to a 1-1/2 month peak, as the greenback eased amid heightened worries over slowing global growth and a still unresolved U.S.-China trade war. The Kiwi trades 0.3 percent up at 0.6859, having touched a high of 0.6872 earlier, its highest level January 18. FxWirePro's Hourly Kiwi Strength Index was at 64.56 (Bullish) by 0600 GMT. Immediate resistance is located at 0.6911 (Dec. 11 High), a break above could take it near 0.69444 (Dec. 5 High). On the downside, support is seen at 0.67299 (Jan. 15 Low), a break below could drag it below 0.6726 (Jan. 7 Low).
Equities Recap
Asian shares gained, as investor risk sentiment revived after a deal was announced to reopen the U.S. government following a prolonged shutdown.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent.
Tokyo's Nikkei declined 0.6 percent to 20,649.00 points, South Korea's KOSPI rallied 0.05 percent to 2,178.87 points.
Shanghai composite index fell 0.2 percent to 2,597.72 points, while CSI300 index traded 0.05 percent down at 3,184.40 points.
Hong Kong’s Hang Seng traded 0.2 percent lower at 27,528.75 points. Taiwan shares aded 0.5 percent to 10,013.33 points.
Commodities Recap
Crude oil prices declined after U.S. energy firms added rigs for the first time this year in a sign that crude production there may rise further. International benchmark Brent crude was trading 0.8 percent down at $60.97 per barrel by 0555 GMT, having hit a high of $63.12 last week, its highest since December 7. U.S. West Texas Intermediate was trading 0.8 percent lower at $53.07 a barrel, after rising as high as $54.30 on Tuesday, its highest since the December 5.
Gold prices rose to a 7-month peak on hopes the U.S. Federal Reserve will keep interest rates unchanged during its two-day policy meeting later in the week. Spot gold traded flat at $1,302.58 per ounce by 0559 GMT, having touched a high of $1,304.33 earlier, its highest level since June 14. U.S. gold futures climbed 0.3 percent to $1,301.90 per ounce.
Treasuries Recap
The Japanese government bonds remained flat on the first trading day of the week amid a muted session that witnessed data of little economic significance. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained flat at -0.001 percent, the yield on the long-term 30-year note hovered around 0.656 percent while the yield on short-term 2-year plunged 16 basis points to -0.163 percent.
