Market Roundup
- Oil prices hit highest in three months
- Lagarde comments boost euro
- Gold slip as risk appetite improves
Economic Data Ahead
- (0200 ET/0700 GMT) German wholesale price index
Key Events Ahead
- (0300 ET/0800 GMT) European Central Bank Vice-president Luis De Guindos
FX Beat
DXY: The dollar index steadied after tumbling to a 5-1/2 month low in the previous session, after sources said Washington and Beijing had reached an interim trade deal. The greenback against a basket of currencies traded 0.1 percent up at 96.83, having touched a low of 96.59 on Thursday, its lowest since July 1.
EUR/USD: The euro rallied to a 4-month peak after the European Central Bank’s new president Christine Lagarde said the bloc was headed for a slow and steady economic recovery next year. The European currency traded 0.4 percent up at 1.1173, having touched a high of 1.1199 earlier, its highest since August 13. Investors’ attention will remain on a series of data from the eurozone economies and ECB Guindos, ahead of the U.S. retail sales, business inventories, import and export price index and Fed Williams speech. Immediate resistance is located at 1.1213, a break above targets 1.1228. On the downside, support is seen at 1.1083, a break below could drag it below 1.1059.
USD/JPY: The dollar advanced to a near 2-week peak on reports that the United States has reached a deal in principle on trade with China. The United States has agreed to reduce some tariffs and delay a tranche of tariffs as part of a phase-one deal. The major was trading 0.2 percent up at 109.55, having hit a high of 109.62 earlier, its highest since Dec. 2. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, business inventories, import and export price index and Fed Williams speech. Immediate resistance is located at 109.72, a break above targets 109.92. On the downside, support is seen at 108.83, a break below could take it near at 108.63.
GBP/USD: Sterling rose to a 1-1/2 year peak above the 1.3500 handle, as Britain's election results showed the Conservatives won 359 seats, an absolute majority in the UK Parliament, clearing the path for UK Prime Minister Boris Johnson to take the UK out of the European Union in January. The major traded 2.3 percent up at 1.3470, having hit a high of 1.3514 earlier, it’s highest since May 2018. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3569, a break above could take it near 1.3608. On the downside, support is seen at 1.3107, a break below targets 1.3050. Against the euro, the pound was trading 1.8 percent up at 82.91 pence, having hit a high of 82.75 earlier, it’s highest since July 2016.
AUD/USD: The Australian dollar surged to a 5-1/2 month peak after the Wall Street Journal reported that U.S. negotiators have offered to cut existing tariffs on $360 billion in Chinese goods by as much as 50 percent, and suspend tariffs due to go into effect on December 15. The Aussie trades 0.2 percent up at 0.6924, having hit a high of 0.6938 earlier, it’s highest since July 26. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6876, a break below targets 0.6847. On the upside, resistance is located at 0.6955, a break above could take it near 0.6984.
NZD/USD: The New Zealand dollar jumped to a 4-1/2 month high after the White House agreed to suspend some tariffs on Chinese goods and reduce others in return for Beijing’s pledge to hike purchases of U.S. farm products in 2020. The Kiwi trades 0.4 percent up at 0.6622, having touched a high of 0.6635 earlier, its highest level since July 29. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6661, a break above could take it near 0.6689. On the downside, support is seen at 0.6567 (5-DMA), a break below could drag it below 0.6534 (10-DMA).
Equities Recap
Asian shares advanced as risk sentiment improved on reports the United States has agreed to reduce some tariffs on Chinese goods and delay a tranche of tariffs as part of a phase one deal.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.5 percent.
Tokyo's Nikkei rose 2.6 percent to 24,023.10 points, Australia's S&P/ASX 200 index gained 0.5 percent to 6,739.70 points and South Korea's KOSPI surged 1.5 percent to 2,170.25 points.
Shanghai composite index surged 1.6 percent to 2,962.50 points, while CSI 300 index traded 1.8 percent up at 3,959.41 points.
Hong Kong’s Hang Seng traded 2.1 percent higher at 27,571.11 points. Taiwan shares added 0.7 percent to 11,927.73 points.
Commodities Recap
Crude oil prices surged, extended previous session gains as the United States and China moved closer to a resolution to the 18-month trade war that raised doubts about global demand for crude. International benchmark Brent crude was trading 0.5 percent up at $65.62 per barrel by 0532 GMT, having hit a low of $63.00 on Wednesday, its lowest since December 6. U.S. West Texas Intermediate was trading 0.5 percent up at $59.47 a barrel, after falling as low as $58.09 on Wednesday, its lowest since December 6.
Gold prices declined as appetite for riskier assets improved after sources said Washington and Beijing had reached an interim trade deal and averted a fresh round of U.S. tariffs. Spot gold was trading 0.1 percent down at $1,467.73 per ounce by 0536 GMT, having touched a high of $1486.62 on Thursday, its highest since November 7. U.S. gold futures were down 0.2 percent at $1,469.60.
Treasuries Recap
The Japanese government bond prices eased, with benchmark 10-year JGB futures were down 0.14 point at 152.25. The 10-year JGB yield rose 0.5 basis point to minus 0.020 percent, but stayed below nine-month high of zero percent touched earlier this week. The 20-year JGB yield rose 1 basis point to 0.300 percent, while the 30-year yield rose 1.5 basis points to 0.445 percent. The two-year JGB yield rose 0.5 basis point to minus 0.125 percent and the five-year yield was flat at minus 0.130 percent.
