Market Roundup
- IMF, CEOs sound warnings as leaders gather in Davos
- PM May tries to tweak defeated Brexit plan, refuses to rule out no-deal
- Democratic U.S. Sen. Kamala Harris jumps into 2020 White House race
- Japan firms wary of boosting investment amid intensifying trade war - poll
- U.S. to formally seek extradition of Huawei exec Meng Wanzhou - Globe And Mail
- China state planner warns economic pressure will hit job market
Economic Data Ahead
- (0430 ET/0930 GMT) Great Britain Nov ILO Unemployment Rate, 4.1% f'cast, 4.1% prev
- (0430 ET/0930 GMT) Great Britain Nov Employment Change, 85k f'cast, 79k prev
- (0430 ET/0930 GMT) Great Britain Nov Avg Earnings (Ex-Bonus), 3.3% f'cast, 3.3% prev
- (0500 ET/1000 GMT) Germany Jan ZEW Economic Sentiment, -18.4 f'cast, -17.5 prev
- (0500 ET/1000 GMT) Germany Jan ZEW Current Conditions, 43.5 f'cast, 45.3 prev
Key Events Ahead
- (0830 ET/1330 GMT) Federal Reserve Bank of Philadelphia issues Non-manufacturing Business Outlook Survey for January in Philadelphia, United States
- NA ECB Vice President Luis de Guindos participates in ECOFIN meeting in Brussels, Belgium.
FX Beat
DXY: The dollar index edged higher after the International Monetary Fund cut its 2019 and 2020 global growth forecasts, citing a bigger-than-expected slowdown in China and the eurozone. The greenback against a basket of currencies trades 0.1 percent up at 96.38, having touched a high of 96.43 on Monday, its highest since Jan. 4. FxWirePro's Hourly Dollar Strength Index stood at 118.13 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro eased, as growth in Germany and France languished and inflation remains weak, while the European Central Bank is widely expected to maintain an accommodative mode for this year. The European currency traded 0.05 percent down at 1.1358, having touched a low of 1.1353 on Friday, its lowest since Jan. 4. FxWirePro's Hourly Euro Strength Index stood at -35.04 (Neutral) by 0500 GMT. Investors’ attention will remain on German ZEW survey and Eurozone economic sentiment, ahead of the U.S. existing home sales. 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 1.1345 (Jan. 4 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar declined, extending previous session losses, as a slowdown in China's economy to 28-year lows stoked fresh worries over global growth and prompted investors to rush into safe-haven assets. The major was trading 0.2 percent down at 109.43, having hit a high of 109.88 on Friday, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at 11.38 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. existing home sales. 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 eased, reversing some of its previous gains, as British Prime Minister Theresa May refused to rule out a no-deal Brexit. The major traded 0.2 percent down at 1.2872, having hit a high of 1.3000 on Thursday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 85.59 (Slightly Bullish) 0500 GMT. Immediate resistance is located at 1.2929 (January 14 High), a break above could take it near 1.3030 (November 15 High). On the downside, support is seen at 1.2818 (January 14 Low), a break below targets 1.2764 (November 21 Low). Against the euro, the pound was trading 0.1 percent down at 88.22 pence, having hit a high of 87.63 on Thursday, it’s highest since November 15.
AUD/USD: The Australian dollar slumped to a 2-week low, as concerns about the outlook for Chinese, and global growth dented investor risk sentiment. The Aussie trades 0.3 percent down at 0.7138, having hit a low of 0.7133 earlier; it’s lowest since January 8. FxWirePro's Hourly Aussie Strength Index stood at -104.09 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7116 (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 plunged, extending losses for the seventh straight session, as speculators bet that consumer prices data due on Wednesday will be weak enough to narrow the odds on a policy easing from the Reserve Bank of New Zealand. The Kiwi trades 0.1 percent down at 0.6724, having touched a low of 0.6713 on Monday, its lowest level January 8. FxWirePro's Hourly Kiwi Strength Index was at -18.83 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6809 (Jan.9 High), a break above could take it near 0.6862 (Nov.14 High. On the downside, support is seen at 0.6707 (Jan. 8 Low), a break below could drag it below 0.6671 (Jan. 4 Low).
Equities Recap
Asian shares slumped, as pessimism about world growth sent investors seeking safety in safe-haven assets.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.5 percent.
Tokyo's Nikkei declined 0.5 percent to 20,622.91 points, Australia's S&P/ASX 200 index plunged 0.5 percent to 5,858.80 points and South Korea's KOSPI slumped 0.4 percent to 2,115.81 points.
Shanghai composite index fell 1.3 percent to 2,576.17 points, while CSI300 index traded 1.4 percent down at 3,139.83 points.
Hong Kong’s Hang Seng traded 1.1 percent lower at 26,886.19 points. Taiwan shares added0.05 percent to 9,894.66 points.
Commodities Recap
Crude oil prices declined as signs of a spreading global economic slowdown stoked concerns over future fuel demand. International benchmark Brent crude was trading 0.9 percent down at $62.22 per barrel by 0452 GMT, having hit a high of $63.12 on Monday, its highest since December 7. U.S. West Texas Intermediate was trading 0.4 percent lower at $53.71 a barrel, after rising as high as $54.30 earlier, its highest since the December 7.
Gold prices edged lower, hovering near 3-week lows touched in the previous session, as the greenback surged amid concerns about a global slowdown. Spot gold was 0.2 percent down at $1,277.80 per ounce by 0454 GMT, having touched a low of $1,276.63 on Monday, its lowest level since Jan. 4. U.S. gold futures fell 0.4 percent to $1,277.20 per ounce.
Treasuries Recap
The Japanese government bonds gained on the second trading day of the week ahead of the country’s trade balance data for the month of December, scheduled to be released today by 23:50GMT and the Bank of Japan’s (BoJ) monetary policy decision, due on January 23 for further direction in the debt market. . The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad lower at 0.001 percent, the yield on the long-term 30-year note fell 1-1/2 basis points to 0.681 percent and the yield on short-term 2-year plunged 17 basis points to -0.169 percent.
The Australian government bonds jumped across the curve during Asian trading session following a fall in the country’s weekly consumer confidence index as investors wait to watch the employment report for the month of December, scheduled to be released on January 24 by 00:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1 basis point to 2.301 percent, the yield on the long-term 30-year bond fell 1-1/2 basis points to 2.823 percent and the yield on short-term 2-year traded tad higher at 1.895 percent.
The Canadian government bond prices were higher across a flatter yield curve, with the 10-year rising 14 Canadian cents to yield 2.020 percent. On Friday, the 10-year yield touched its highest intraday in one month at 2.049 percent.
