Market Roundup
- Gold prices hit 2-week high
- Oil slip as coronavirus concerns linger
- Apple warns on coronavirus impact
Economic Data Ahead
- (0430 ET/0930 GMT) UK ILO Unemployment Rate (3M) (Dec)
- (0430 ET/0930 GMT) UK Average Earnings Excluding Bonus (3Mo/Yr) (Dec)
- (0430 ET/0930 GMT) UK Average Earnings Including Bonus (3Mo/Yr) (Dec)
- (0430 ET/0930 GMT) UK Claimant Count Rate (Jan)
- (0430 ET/0930 GMT) UK Claimant Count Change (Jan)
- (0500 ET/1000 GMT) EZ ZEW Survey - Economic Sentiment (Feb)
- (0500 ET/1000 GMT) German ZEW Survey - Current Situation (Feb)
- (0500 ET/1000 GMT) German ZEW Survey - Economic Sentiment (Feb)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index consolidated near a 4 1/2-month high on news that the Trump administration is considering changing U.S. regulations to allow it to block shipments of chips to Huawei Technologies from global chip supplying companies. The greenback against a basket of currencies traded 0.05 percent up at 99.20, having touched a high of 99.24 earlier, its highest since Oct. 8.
EUR/USD: The euro slumped to a fresh near 3-year low, ahead of a highly watched German survey, which is expected to show a sharp slump in investor confidence and fuel growing pessimism about the economic outlook. The European currency traded down at 1.0830, having touched a low of 1.0822 earlier, its lowest since May 2017. Investors’ attention will remain on German ZEW survey and EZ economic sentiment, ahead of U.S. NY Empire State manufacturing index. Immediate resistance is located at 1.0858 (5-DMA), a break above targets 1.0888. On the downside, support is seen at 1.0819, a break below could drag it below 1.0803.
USD/JPY: The Japanese yen rallied as traders assessed the spread of an outbreak of a new coronavirus both inside and outside China. The major was trading 0.1 percent down at 109.78, having hit a high of 110.13 on Wednesday, its highest since Jan. 21. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. NY Empire State manufacturing index. Immediate resistance is located at 110.02, a break above targets 110.17. On the downside, support is seen at 109.51 (21-DMA), a break below could take it near at 109.30.
GBP/USD: Sterling declined, extending previous session losses, amid lingering worries about economic ties between Britain and the European Union as both sides laid out conflicting views on how to proceed with trade negotiations. The major traded down at 1.2997, having hit a high of 1.3069 on Thursday, it’s highest since Feb. 3. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3025 (21-DMA), a break above could take it near 1.3063. On the downside, support is seen at 1.2975 (10-DMA), a break below targets 1.2956. Against the euro, the pound was trading 0.1 percent down at 83.35 pence, having hit a high of 82.95 on Thursday, it’s highest since Dec.13.
AUD/USD: The Australian dollar plunged to a 1-week low after minutes from the Reserve Bank of Australia's first meeting of the year showed policymakers discussed easing policy. The RBA kept rates unchanged at an all-time low of 0.75 percent at that meeting, but the minutes showed central bankers are prepared to ease policy further if needed. The Aussie trades 0.3 percent down at 0.6691, having hit a low of 0.6684 earlier, it’s lowest since Feb. 11. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6675, a break below targets 0.6652. On the upside, resistance is located at 0.6729, a break above could take it near 0.6750.
NZD/USD: The New Zealand dollar tumbled to a 1-week low as a production warning from Apple highlighted the mounting economic costs of the coronavirus. The Kiwi trades 0.3 percent down at 0.6415, having touched a low of 0.6406 earlier, its lowest level since Feb. 12. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6449, a break above could take it near 0.6484. On the downside, support is seen at 0.6381, a break below could drag it below 0.6358.
Equities Recap
Asian shares slumped after Apple Inc warned on quarterly revenue due to the coronavirus epidemic in China.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.7 percent.
Tokyo's Nikkei declined 1.4 percent to 23,193.80 points, Australia's S&P/ASX 200 index eased 0.2 percent to 7,113.70 points and South Korea's KOSPI fell 1.5 percent to 2,208.88 points.
Shanghai composite index fell 0.1 percent to 2,981.58 points, while CSI 300 index traded 0.6 percent down at 4,054.58 points.
Hong Kong’s Hang Seng traded 1.3 percent lower at 27,590.74 points. Taiwan shares shed 0.9 percent to 11,648.98 points
Commodities Recap
Crude oil prices declined amid lingering concerns over the economic impact of the coronavirus outbreak in China and its effect on oil demand. International benchmark Brent crude was trading 0.9 percent lower at $57.06 per barrel by 0540 GMT, having hit a high of $57.68 on Monday, its highest since Jan. 31. U.S. West Texas Intermediate was trading 1.2 percent down at $51.66 a barrel, after rising as high as $52.31 Monday, its highest since Jan 31.
Gold prices rallied to a 2-week high as global equities retreated after Apple Inc flagged a revenue miss amid the coronavirus outbreak, denting investor optimism. Spot gold was trading 0.3 percent up at $1,585.85 per ounce by 0550 GMT, having touched a high of $1587.45 earlier, its highest since Feb. 3. U.S. gold futures edged higher by 0.2 percent to $1,589.00.
Treasuries Recap
The Japanese government bond prices gained broadly after Apple Inc said it will not meet its revenue guidance for the March quarter as the coronavirus outbreak slowed production and weakened demand in China. The benchmark 10-year JGB futures rose 0.21 point to 152.79 in mid-afternoon trade. The yield on the benchmark 10-year cash JGBs dropped 2 basis points (bps) to minus 0.060 percent. The five-year yield fell 1.5 basis points to minus 0.150 percent, while the 2-year JGB yield dropped half a basis point to minus 0.150 percent. The super-long zone followed suit, with the 20-year yield declining 2 basis points to 0.220 percent and the 30-year yield losing 2.5 bps to 0.345 percent.
The Australian government bond futures benefited from the general mood of risk aversion, with the 3-year bond contract up 1.5 ticks at 99.280. The 10-year contract firmed 2 ticks to 98.9550.
