Market Roundup
- China signals more stimulus as economic slowdown deepens
- China new yuan loans reach 16.17 trln yuan in 2018 -c.bank
- China is confident yuan can be kept stable despite RRR cuts-c.bank official
- Take a second look, Britain's May urges lawmakers before Brexit vote
- Trump's attorney general nominee vows to shield Russia probe from politics
- Trump defends trade policies to farmers, vows fair deal with China
- New Zealand Q4 NZIER Confidence, -17%, -30% prev
Economic Data Ahead
- (0245 ET/0745 GMT) France Dec CPI (EU Norm) Final MM, 0.1% f'cast, 0.1% prev
- (0245 ET/0745 GMT) France Dec CPI (EU Norm) Final YY, 1.9% f'cast, 1.9% prev
- (0400 ET/0900 GMT) Germany 2018 Full Year GDP, 1.5% f'cast, 2.2% prev
Key Events Ahead
- (0300 ET/0800 GMT) Norwegian Finance Minister Siv Jensen delivers speech on the "state of the nation" at a breakfast seminar in Oslo.
- (0300 ET/0800 GMT) Bank of Spain Governor Pablo Hernández de Cos will speak at a financial event in Madrid.
- (0530 ET/1030 GMT) ECB's Mario Draghi participates in meeting of the plenary of the European Parliament to mark the 20th anniversary of the euro in Strasbourg, France.
- (0815 ET/1315 GMT) Riksbank First Deputy Governor Kerstin af Jochnick will participate in a panel discussion of the most important factors for the Swedish business sector in 2019 as part of the conference DI Varlden in Stockholm.
- (0830 ET/1330 GMT) Federal Reserve Bank of Philadelphia issues historical revisions to its monthly Non-manufacturing Business Outlook Survey in Philadelpheia, United States.
- (1000 ET/1500 GMT) ECB's President Mario Draghi addresses the European Parliament and responds to questions from lawmakers about the ECB's annual report for 2017 in Strasbourg, France.
- (1130 ET/1630 GMT) Fed's Neel Kashkari speaks on the regional economy before the Rochester Economic Summit in Rochester, Minnesota.
- (1230 ET/1730 GMT) Bank of Brazil Governor Illan Goldfajn speaks at Geneva's International Centre for Monetary and Banking Studies (ICMB) on Central Banking in Emerging Markets in Geneva, Switzerland.
- (1300 ET/1800 GMT) Fed's Esther George speaks on the economic and monetary policy outlook before The Central Exchange in Kansas City, United States.
- (1315 ET/1815 GMT) Fed's Robert Kaplan participates in moderated question-and-answer session before the Plano Chamber of Commerce Annual Meeting in Plano, Texas.
- (1400 ET/1900 GMT) Bank of Spain Governor Pablo Hernández de Cos will deliver a speech on the Spanish economy at the 9th edition of Spain Investors Day in Madrid.
FX Beat
DXY: The dollar index eased amid growing worries over the U.S. economy losing steam, which will likely keep the Fed from tightening monetary policy further this year. The greenback against a basket of currencies trades 0.05 percent down at 95.56, having touched a low of 95.03 on Thursday, its lowest since Oct. 16. FxWirePro's Hourly Dollar Strength Index stood at -1.82 (Neutral) by 0400 GMT.
EUR/USD: The euro surged, as the greenback extended previous session losses, amid heightened expectations the Federal Reserve will hold off on raising rates this year. The European currency traded 0.1 percent up at 1.1478, having touched a high of 1.1569 on Thursday, its highest since Oct. 17. FxWirePro's Hourly Euro Strength Index stood at -17.22 (Neutral) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and EZ trade balance, ahead of the U.S. producer price index. Immediate resistance is located at 1.1500 (November 7 High), a break above targets 1.1599 (October 11 High). On the downside, support is seen at 1.1439 (January 9 Low), a break below could drag it till 1.1411 (Jan. 8 Low).
USD/JPY: The dollar rallied to a near 1-week peak as a fresh round of commitments from Chinese policymakers to stimulate their economy through fiscal and monetary steps underpinned investor sentiment. The major was trading 0.5 percent up at 108.71, having hit a low of 107.77 earlier in the month, its lowest since Jan 4. FxWirePro's Hourly Yen Strength Index stood at -175.86 (Highly Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. producer price index. Immediate resistance is located at 109.08 (January 8 High), a break above targets 109.46 (April 26 High). On the downside, support is seen at 107.65 (April 23 Low), a break below could take it lower 107.35 (April 20 Low).
GBP/USD: Sterling rose, extending gains for the third straight session, after a report, subsequently denied that a pro-Brexit faction of lawmakers could support Prime Minister Theresa May's Brexit deal in parliament. The major traded 0.4 percent up at 1.2908, having hit a high of 1.2929 on Monday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 125.09 (Highly Bullish) 0400 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2946 (November 12 High), a break above could take it near 1.3030 (November 15 High). On the downside, support is seen at 1.2827 (November 12 Low), a break below targets 1.2723 (November 15 Low). Against the euro, the pound was trading 0.2 percent up at 88.92 pence, having hit a high of 88.75 on Monday, it’s lowest since December 5.
AUD/USD: The Australian dollar steadied above the 0.7200 handle, as Beijing signalled more supportive measures to stabilize a slowing economy. The Aussie trades 0.3 percent up at 0.7215, having hit a high of 0.7235 on Friday; it’s highest since December 13. FxWirePro's Hourly Aussie Strength Index stood at 58.28 (Bullish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7116 (January 8 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 0.7273 (December 6 High).
NZD/USD: The New Zealand dollar advanced to a 1-month peak after China's state planner stated that it will aim to achieve a good start in the first quarter for the economy, indicating more growth-boosting steps. The Kiwi trades 0.4 percent up at 0.6845, having touched a high of 0.6847, its highest level December 19. FxWirePro's Hourly Kiwi Strength Index was at 133.03 (Highly Bullish) by 0400 GMT. Immediate resistance is located at 0.6862 (Nov.14 High), a break above could take it near 0.6911 (Dec. 11 High). On the downside, support is seen at 0.6777 (Dec. 14 Low), a break below could drag it below 0.6726 (Jan. 7 Low).
Equities Recap
Asian shares rebounded, as the Chinese shares surged on expectations of more government policy measures to prop-up a slowing economy.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent,.
Tokyo's Nikkei rallied 0.8 percent to 20,527.46 points, Australia's S&P/ASX 200 index gained 0.6 percent to 5,811.50 points and South Korea's KOSPI surged 1.4 percent to 2,093.35 points.
Shanghai composite index rose 0.9 percent to 2,560.17 points, while CSI300 index traded 1.5 percent up at 3,112.32 points.
Hong Kong’s Hang Seng traded 1.7 percent higher at 26,746.57 points. Taiwan shares added 0.6 percent to 9,764.75 points.
Commodities Recap
Crude oil prices rebounded from a 5-day low, amid supply cuts led by producer cartel OPEC and Russia, however, a darkening economic outlook limited gains. International benchmark Brent crude was trading 0.7 percent up at $59.65 per barrel by 0453 GMT, having hit a high of $62.46 on Friday, its highest since December 7. U.S. West Texas Intermediate was trading 0.6 percent higher at $51.07 a barrel, after rising as high as $53.29 on Friday, its highest since the December 7.
Gold prices consolidated within narrow ranges, supported by market expectations of fewer interest rate hikes in the year by the U.S. Federal Reserve. Spot gold traded flat at $1,291.14 per ounce at 0456 GMT, having touched a high of $1,298.42 earlier in the month, its highest level since June 15. U.S. gold futures were unchanged at $1,291.4 an ounce.
Treasuries Recap
The Japanese government bonds remained mixed on the second trading day of the week amid a quiet session ahead of the country’s national consumer price inflation (CPI) data and Bank of Japan (BoJ) Governor Kuroda’s speech, both scheduled to for later in the week for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1 basis point to -0.011 percent, the yield on the long-term 30-year note hovered around 0.705 percent and the yield on short-term 2-year slumped 15 basis points to -0.149 percent.
The Australian government bond yields climbed across the curve during the Asian trading session as risk sentiment improved and Wall Street shares trimmed previous losses. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 2 basis points to 2.289 percent, the yield on the long-term 30-year bond also jumped 2 basis points to 2.837 percent and the yield on short-term 2-year up 1 basis point to 1.877 percent.
The Canadian government bond prices were mixed across the yield curve, with the two-year up 1 Canadian cent to yield 1.886 percent and the 10-year falling 5 Canadian cents to yield 1.965 percent.
