Market Roundup
- Trump says will wait till shutdown over to make state of union address
- ECB to acknowledge weak growth but keep policy unchanged
- U.S. gov't shutdown to crimp growth, recession risk steady - poll
- BoE's Haldane sees higher rates if UK economy 'ticks along' -Daily Mail
- China says it can achieve sustainable economic growth
- National Australia Bank raises mortgage rates, cites cost pressures
- Maduro rival Guaido claims Venezuela presidency with U.S. backing
- Japan Jan Nikkei Mfg PMI Flash, 50.0, 52.6 prev
- Australia Jan Manufacturing PMI, 54.3 f'cast, 53.7 prev
- Australia Jan Services PMI, 51.0 f'cast, 52.2 prev
- Australia Dec Employment, 21.6k, 16.5k f'cast, 37.0k prev
- Australia Dec Unemployment Rate, 5.0%, 5.1% f'cast, 5.1% prev
Economic Data Ahead
- (0315 ET/0815 GMT) France Jan Markit Mfg Flash PMI, 49.9 f'cast, 49.7 prev
- (0315 ET/0815 GMT) France Jan Markit Serv Flash PMI, 50.5f'cast, 49.0 prev
- (0315 ET/0815 GMT) France Jan Markit Comp Flash PMI, 51.0 f'cast, 48.7 prev
- (0330 ET/0830 GMT) Germany Jan Markit Mfg Flash PMI, 51.3 f'cast, 51.5 prev
- (0330 ET/0830 GMT) Germany Jan Markit Mfg Service Flash PMI, 52.1 f'cast, 51.8 prev
- (0330 ET/0830 GMT) Germany Jan Markit Comp Flash PMI, 51.9 f'cast, 51.6 prev
- (0400 ET/0900 GMT) EZ Jan Markit Mfg Flash PMI, 51.4 f'cast, 51.4 prev
- (0400 ET/0900 GMT) EZ Jan Markit Serv Flash PMI, 51.5 f'cast, 51.2 prev
- (0400 ET/0900 GMT) EZ Jan Markit Comp Flash PMI, 51.4 f'cast, 51.1 prev
Key Events Ahead
- (0400 ET/0900 GMT) Norway Central Bank announces interest rate decision in Oslo
- (0500 ET/1000 GMT) Bank of England Governor Mark Carney speaks at the World Economic Forum event titled "Shaping the Future of Finance" in Davos, Switzerland.
- (0745 ET/1245 GMT) ECB rate decision
- (0830 ET/1330 GMT) ECB President Mario Draghi holds a press conference after the interest rate meeting in Frankfurt.
- (0830 ET/1330 GMT) Sweden Riksbank Deputy Governor Cecilia Skingsley participates in a panel discussion at the World Economic Forum titled "Monetary policy on the back of ECB"in Davos, Switzerland.
- (1030 ET/1530 GMT) Bank of England Governor Mark Carney speaks at the World Economic Forum event titled "Resetting Financial Governance" in Davos, Switzerland.
- NA Bank of Lithuania holds monetary policy meeting of the ECB governing council in Vilnius
- NA Roundtable with Tobias Adrian, director of the Monetary and Capital Markets Department, IMF in New York.
- NA Roundtable with Nathalie Aufauvre, director general for Financial Stability and Operations, Bank of France, in New York.
- NA Governing Council of the ECB holds monetary policy meeting in Frankfurt
FX Beat
DXY: The dollar index tumbled, extending losses for the fourth straight session, amid increasing uncertainty over the partial U.S. government shutdown. The greenback against a basket of currencies trades down at 96.10, having touched a low of 96.04, its lowest since Jan. 18. FxWirePro's Hourly Dollar Strength Index stood at -11.32 (Neutral) by 0500 GMT.
EUR/USD: The euro surged, extending previous session gains, as investors await the European Central Bank's monetary policy announcement later in the day, where it is all but certain to keep policy unchanged. The European currency traded 0.05 percent up at 1.1387, having touched a low of 1.1336 on Tuesday, its lowest since Jan. 3. FxWirePro's Hourly Euro Strength Index stood at 35.05 (Neutral) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, EZ prelim Markit PMI's and ECB policy decision, ahead of the U.S. flash Markit PMI's and Senate's vote on the government shutdown. Immediate resistance is located at 1.1402 (December 18 High), a break above targets 1.1442 (December 10 High). On the downside, support is seen at 1.1353 (Jan. 18 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar declined, as concerns over global growth, a U.S. government shutdown and U.S.-China trade talks dented investor risk sentiment. U.S. Republican Senate Majority Leader Mitch McConnell stated that he plans to hold a vote on a Democratic proposal that would fund the government for three weeks. The major was trading 0.1 percent down at 109.52, having hit a high of 109.99 on Wednesday, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at -33.63 (Neutral) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. flash Markit PMI's and Senate's vote on the government shutdown. Immediate resistance is located at 110.47 (Dec. 31 High), a break above targets 111.19 (Dec. 24 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 rallied to a 2-1/2 month peak as investors speculate that a no-deal Brexit can be avoided if parliament exercises greater control over the process. On Wednesday, Britain's opposition Labour Party stated that it would back an attempt by lawmakers to prevent a disorderly no-deal Brexit. The major traded 0.05 percent up at 1.3071, having hit a high of 1.3094 earlier; it’s highest since November 8. FxWirePro's Hourly Sterling Strength Index stood at 108.39 (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 1.3132 (October 8 High), a break above could take it near 1.3174 (November 7 High). On the downside, support is seen at 1.3021 (November 6 Low), a break below targets 1.2964 (November 5 Low). Against the euro, the pound was trading flat at 87.08 pence, having hit a high of 86.96, it’s highest since November 14.
AUD/USD: The Australian dollar slumped to a near 3-week low after National Australia Bank joined the other major banks to raise mortgage rates by 12bp to 16bp across its product range, in response to higher funding costs. The Aussie trades 0.4 percent down at 0.7106, having hit a low of 0.7106 earlier; it’s lowest since January 4. FxWirePro's Hourly Aussie Strength Index stood at -165.00 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7085 (December 20 Low), a break below targets 0.7021 (October 26 Low). On the upside, resistance is located at 0.7180 (January 21 High), a break above could take it near 0.7246 (December 13 High).
NZD/USD: The New Zealand dollar retreated from a 1-week peak touched earlier in the session, as worries about weakening global economic growth left investors wary of riskier assets. The Kiwi trades 0.2 percent down at 0.6775, having touched a high of 0.6806, its highest level January 16. FxWirePro's Hourly Kiwi Strength Index was at 132.70 (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 0.6726 (Jan. 7 Low), a break below could drag it below 0.6706 (Jan. 22 Low).
Equities Recap
Asian shares edged lower, weighed down by uncertainty over the prolonged U.S. government shutdown, slowing global economic growth and the unresolved trade dispute between the United States and China.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.1 percent.
Tokyo's Nikkei declined 0.2 percent to 20,555.38 points, Australia's S&P/ASX 200 index surged 0.4 percent to 5,865.70 points and South Korea's KOSPI rallied 0.4 percent to 2,137.23 points.
Shanghai composite index gained 0.3 percent to 2,589.53 points, while CSI300 index traded 0.4 percent up at 3,153.55 points.
Hong Kong’s Hang Seng traded 0.2 percent higher at 27,062.64 points. Taiwan shares aded 0.3 percent to 9,877.12 points.
Commodities Recap
Crude oil prices eased amid lingering concerns over slowing global economic growth that may limit fuel demand and following an unexpected build in U.S. crude inventories. International benchmark Brent crude was trading 0.03 percent down at $60.91 per barrel by 0425 GMT, having hit a high of $63.12 on Monday, its highest since December 7. U.S. West Texas Intermediate was trading 0.1 percent higher at $52.42 a barrel, after rising as high as $54.30 on Tuesday, its highest since the December 5.
Gold prices steadied, as the greenback weakened amid growing uncertainty over prolonged U.S. government shutdown and slowing global growth. Spot gold was trading flat at $1,282.505 per ounce by 0429 GMT, having touched a low of $1,276.69 on Monday, its lowest level since Jan. 4. U.S. gold futures were steady at $1,283.80 per ounce.
Treasuries Recap
The Australian government bonds climbed across the curve during Asian trading session despite a higher-than-expected rise in the country’s employment change for the month of December, while unemployment rate cheered market investors, falling, unexpectedly to consensus estimate. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 1-1/2 basis points to 2.271 percent, the yield on the long-term 30-year bond slumped 2-1/2 basis points to 2.784 percent and the yield on short-term 2-year also traded nearly 2-1/2 basis points lower at 1.865 percent.
The Canadian government bond prices were slightly lower across the yield curve, with the 10-year falling 3 Canadian cents to yield 1.974 percent. The gap between Canada's 10-year yield and its U.S. equivalent widened by 1.7 basis points to a spread of 77.9 basis points, its widest since Dec. 28.
