Market Roundup
- Gold declines as U.S.-Iran tensions ease
- Sterling to rise this year on hopes for smooth Brexit: Reuters poll
Economic Data Ahead
- (0400 ET/0900 GMT) Italy Industrial output
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index held firm near a 2-week peak, supported by a slew of strong U.S. economic data, while investors awaited December job-market data due later in the day. The greenback against a basket of currencies traded flat at 97.42, having touched a high of 97.56 on Thursday, its highest since Dec. 26.
EUR/USD: The euro steadied after tumbling to a 2-week low in the previous session on data that showed German exports slumped well below expectations. The European currency traded flat at 1.1107, having touched a low of 1.1092 on Thursday, its lowest since December 27. Investors’ attention will remain on a series of data from the eurozone economies ahead of the U.S. nonfarm payroll report, unemployment rate and wholesale inventories. Immediate resistance is located at 1.1134 (21-DMA), a break above targets 1.1158 (10-DMA). On the downside, support is seen at 1.1082, a break below could drag it below 1.1062.
USD/JPY: The dollar rallied to a 2-week peak, supported by easing Middle East tensions and data showing a pick-up in the U.S. service sector, falling joblessness claims and solid private hiring. The United States and Iran backed away from further confrontation following a U.S. drone strike that killed a top Iranian military commander and an Iranian attack on U.S. forces in Iraq in response. The major was trading 0.05 percent up at 109.53, having hit a high of 109.58 earlier, its highest since Dec. 27. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payroll report, unemployment rate and wholesale inventories. Immediate resistance is located at 109.70, a break above targets 109.92. On the downside, support is seen at 109.32, a break below could take it near at 109.08 (21-DMA).
GBP/USD: Sterling consolidated near a 2-week low after a Reuters poll showed Britain’s pound will gain more than 3 percent against the dollar this year, supported by interest rate differentials and hopes for a smooth departure from the European Union. The major traded 0.1 up at 1.3071, having hit a low of 1.3012 on Thursday, it’s lowest since Dec. 27. Investors’ attention will remain on the development surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3130, a break above could take it near 1.3181. On the downside, support is seen at 1.3032, a break below targets 1.3000. Against the euro, the pound was trading flat at 84.98 pence, having hit a high of 84.54 on Wednesday, it’s highest since Dec. 17.
AUD/USD: The Australian dollar rebounded, halting a 6-day losing streak after data showed retail sales jumped 0.9 percent in November, the largest increase in two years and well above expectations of 0.4 percent. The Aussie trades 0.2 percent up at 0.6874, having hit a low of 0.6849 on Wednesday, it’s lowest since Dec. 19. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6838, a break below targets 0.6813. On the upside, resistance is located at 0.6909 (21-DMA), a break above could take it near 0.6928.
NZD/USD: The New Zealand dollar retreated from a near 3-week low as risk sentiment improved after Gao Feng, spokesman at the Chinese commerce ministry, stated that Vice Premier Liu He, head of the country's negotiation team in the U.S.-China trade talks will visit Washington on Jan. 13-15. The Kiwi trades flat at 0.6617, having touched a low of 0.6600 on Thursday, its lowest level since Dec. 23. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6647 (5-DMA), a break above could take it near 0.6676 (10-DMA). On the downside, support is seen at 0.6588, a break below could drag it below 0.6554.
Equities Recap
Asian shares advanced following the easing of U.S.-Iran tensions, and after U.S. stocks recorded new highs overnight.
MSCI's broadest index of Asia-Pacific shares outside Japan jumped 0.3 percent.
Tokyo's Nikkei rallied 0.3 percent to 23,815.12 points, Australia's S&P/ASX 200 index surged 0.8 percent to 6,929.00 points and South Korea's KOSPI advanced 0.5 percent to 2,197.49 points.
Shanghai composite index eased 0.3 percent to 3,086.00 points, while CSI 300 index traded 0.2 percent lower at 4,154.37 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 28,566.03 points. Taiwan shares added 0.2 percent to 11,993.78 points.
Commodities Recap
Crude oil prices eased, extending losses for the fifth straight session as the threat of war in the Middle East receded and investors switched attention to the rise in U.S. crude oil and product inventories. International benchmark Brent crude was trading 0.4 percent lower at $65.15 per barrel by 0344 GMT, having hit a high of $71.31 on Wednesday, its highest since May 22. U.S. West Texas Intermediate was trading 0.4 percent down at $59.34 a barrel, after rising as high as $65.62 on Wednesday, its highest since April 25.
Gold prices declined as de-escalation in U.S.-Iran tensions brought relief to markets and boosted investors’ appetite for riskier assets. Spot gold was trading 0.2 percent down at $1,546.89 per ounce by 0351 GMT, having touched a high of $1611.27 on Wednesday, its highest since March 2013. U.S. gold futures eased 0.2 percent to $1,551.40.
Treasuries Recap
The Australian bonds slumped during Asian session of the last trading day of the week after the country’s retail sales for the month of November topped market expectations, rising from the prior reading in October as well amid an otherwise muted trading session that witnessed data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.242 percent, the yield on the long-term 30-year bond slipped 1/2 basis point to 1.858 percent and the yield on short-term 2-year gained nearly 1 basis point to 0.808 percent.
