Market Roundup
- U.S., China can reach trade deal 'we can live with' -U.S. Commerce secretary
- Seeking support for a wall, Trump plans prime-time speech, border visit
- Fed's Bostic sees one U.S. interest rate hike this year
- UK, European officials discussing possible Brexit delay -Telegraph
- N.Korea leader visits China after warning of alternate path to U.S. talks
- Japan has taken sufficient steps ahead of sales tax rise - finmin
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Nov Industrial output MM, 0.3% f'cast, -0.5% prev
- (0330 ET/0830 GMT) Great Britain Dec Halifax House Prices MM, 0.2% f'cast, -1.4% prev
- (0500 ET/1000 GMT) EZ Dec Economic Sentiment, 108.2 f'cast, 109.5 prev
- (0500 ET/1000 GMT) EZ Dec Industrial Sentiment, 2.9 f'cast, 3.4 prev
- (0500 ET/1000 GMT) EZ Dec Services Sentiment, 12.3 f'cast, 13.3 prev
- (0500 ET/1000 GMT) EZ Dec Consumer Confid. Final, -6.2 f'cast, -6.2 prev
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index rebounded from multi-month lows after U.S. Federal Reserve chair Jerome Powell said he would be patient and flexible on interest rate hikes. The greenback against a basket of currencies trades 0.2 percent up at 95.81, having touched a low of 95.64 on Monday, its lowest since Oct. 22. FxWirePro's Hourly Dollar Strength Index stood at -12.62 (Neutral) by 0500 GMT.
EUR/USD: The euro declined after rising to a near 1-week peak earlier in the session, as the greenback rebounded from recent lows after Fed Chairman Jerome Powell's comments eased market concerns that the U.S. central bank might ignore signs of an economic slowdown and stick to its projections of two rate hikes this year. The European currency traded 0.3 percent down at 1.1439, having touched a high of 1.1484 earlier, its highest since Jan. 2. FxWirePro's Hourly Euro Strength Index stood at -5.44 (Neutral) by 0400 GMT. Investors’ attention will remain on Eurozone economic sentiment indicator, ahead of the U.S. trade balance, JOLTS job opening and consumer credit change. Immediate resistance is located at 1.1485 (December 20 High), a break above targets 1.1527 (October 18High). On the downside, support is seen at 1.1393 (November 19 Low), a break below could drag it till 1.1360 (December 7 Low).
USD/JPY: The dollar rallied to a 6-day peak, amid growing hopes that Washington and Beijing may be inching towards a trade deal. However, fears that the U.S. Federal Reserve will not raise interest rates this year capped gains. The major was trading 0.2 percent up at 108.96, having hit a low of 104.65 last week, its lowest since March 26. FxWirePro's Hourly Yen Strength Index stood at -127.67 (Highly Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. trade balance, JOLTS job opening and consumer credit change. Immediate resistance is located at 109.46 (April 26 High), a break above targets 109.73 (June 1 High). On the downside, support is seen at 108.02 (January 7 Low), a break below could take it lower 107.65 (April 23 Low).
GBP/USD: Sterling edged down after rising to a 1-week high earlier in the day after a spokesperson for UK Prime Minister Theresa May stated that the final Brexit date of March 29th is a firm date, and the government will not, under any circumstances, be extending Article 50. The major traded 0.1 percent down at 1.2762, having hit a low of 1.2373 on Thursday; it’s lowest since April 2017. FxWirePro's Hourly Sterling Strength Index stood at 58.10 (Bullish) 0400 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2815 (December 31 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2715 (January 7 Low), a break below targets 1.2661 (August 15 Low). Against the euro, the pound was trading 0.2 percent up at 89.65 pence, having hit a low of 90.92 on Thursday, it’s lowest since August 18.
AUD/USD: The Australian dollar eased after data showed domestic trade surplus declined a little more than expected to A$1.93 billion ($1.38 billion) in November. The Aussie trades 0.3 percent down at 0.7124, having hit a low of 0.6744 on Thursday; it’s lowest since April 2009. FxWirePro's Hourly Aussie Strength Index stood at 22.74 (Neutral) by 0400 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 0.7046 (5-DMA). On the upside, resistance is located at 0.7200 (December 19 High), a break above could take it near 0.7268 (November 22 High).
NZD/USD: The New Zealand dollar eased from 2-1/2 week highs, as investors waited anxiously to hear if any progress was being made at U.S.-China trade talks in Beijing. The Kiwi trades 0.3 percent down at 0.6738, having touched a high of 0.6767 on Monday, its highest level December 21. FxWirePro's Hourly Kiwi Strength Index was at 5.73 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6790 (Dec. 21 High), a break above could take it near 0.6817 (Dec. 17 High). On the downside, support is seen at 0.6691 (Dec. 31 Low), a break below could drag it below 0.6653 (Jan. 2 Low).
Equities Recap
Asian shares rose amid speculation the U.S. Federal Reserve would halt its tightening if economic growth slows further and hopes that Washington and Beijing may be inching towards a trade deal.
MSCI's broadest index of Asia-Pacific shares outside Japan edged higher 0.1 percent.
Tokyo's Nikkei rose 0.9 percent to 20,238.69 points, Australia's S&P/ASX 200 index gained 0.7 percent to 5,722.40 points and South Korea's KOSPI plunged 0.4 percent to 2,029.54 points.
Shanghai composite index declined 0.3 percent to 2,525.09 points, while CSI300 index traded 0.3 percent down at 3,045.37 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 25,828.31 points. Taiwan shares shed 0.3 percent to 9,563.60 points.
Commodities Recap
Crude oil prices eased, despite hopes that ongoing talks in Beijing involving the U.S. and Chinese officials could end trade disputes between the world's biggest economies. International benchmark Brent crude was trading 0.4 percent down at $57.39 per barrel by 0436 GMT, having hit a high of $58.90 on Monday, its highest since December 18. U.S. West Texas Intermediate was trading 0.3 percent lower at $48.58 a barrel, after rising as high as $49.77 on Monday, its highest since the December 17.
Gold prices declined, weighed down by progress in U.S.-China trade deal talks and improved risk appetite. Spot gold dropped 0.4 percent at $1,283.51 at 0439 GMT, having touched a high of $1,298.42 on Friday, its highest level since June 15. U.S. gold futures eased slightly at $1,288 per ounce.
Treasuries Recap
The Japanese government bonds remained flat on the second trading day of the week ahead of the country’s 30-year auction and November household spending data, both scheduled to be released on January 10 by 03:35GMT and 23:30GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained flat at -0.016 percent, the yield on the long-term 30-year note hovered around 0.682 percent and the yield on short-term 2-year too traded steady at -0.165 percent.
The Australian government bonds sunk during the Asian session, tracking a similar movement in the U.S. Treasuries following progress in the U.S.-China trade talks, coupled with healthy employment data last week. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 4-1/2 basis points to 2.323 percent, the yield on the long-term 30-year bond surged nearly 4 basis points to 2.819 percent and the yield on short-term 2-year traded 2 basis points to 1.900 percent.
The Canadian government bond prices were lower across a flatter yield curve in sympathy with U.S. Treasuries, with the two-year down 5 Canadian cents to yield 1.881 percent and the 10-year falling 15 Canadian cents to yield 1.947 percent.
