Market Roundup
- Oil dips as markets await Iran response
- Gold slips from near 7-year high
Economic Data Ahead
- (0500 ET/1000 GMT) EZ Retail Sales (YoY) (Nov)
- (0500 ET/1000 GMT) EZ Consumer Price Index - Core (YoY) (Dec) PREL
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index consolidated near yesterday's low as rising geopolitical risks threaten to overshadow the benefits of reduced trade friction. The greenback against a basket of currencies traded flat at 96.66, having touched a low of 96.36 on Tuesday, its lowest since July 1.
EUR/USD: The euro eased after a survey showed Eurozone business activity remained close to stagnation at the end of last year. The European currency traded 0.05 percent down at 1.1192, having touched a high of 1.1239 on Wednesday, its highest since August 7. Investors’ attention will remain on a series of data from the eurozone economies, EZ retail sales, and prelim consumer price index, ahead of the U.S. factory orders and ISM non-manufacturing PMI. Immediate resistance is located at 1.1220, a break above targets 1.1249. On the downside, support is seen at 1.1146 (10-DMA), a break below could drag it below 1.1110.
USD/JPY: The dollar rebounded from a near 3-month low as the United States and China are expected to sign a preliminary deal on January 15 to de-escalate a prolonged trade war. Investors also await data due later in the day on the U.S. trade balance, factory orders, and the services sector to measure the health of the economy. The major was trading 0.1 percent up at 108.47, having hit a low of 107.77 earlier, its lowest since Oct. 10. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. factory orders and ISM non-manufacturing PMI. Immediate resistance is located at 108.63, a break above targets 108.99. On the downside, support is seen at 108.21, a break below could take it near at 107.84.
GBP/USD: Sterling consolidated below the 1.3200 handle as investors shifted their attention to a parliamentary debate on Brexit legislation today. The major traded flat at 1.3174, having hit a low of 1.3053 on Friday, 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 1.3229, a break above could take it near 1.3284. On the downside, support is seen at 1.3070, a break below targets 1.3000. Against the euro, the pound was trading 0.1 percent up at 84.96 pence, having hit a high of 84.53 on Wednesday, it’s highest since Dec. 17.
AUD/USD: The Australian dollar declined, extending losses for the fourth straight session, amid increasing worries about armed conflict between the United States and Iran. The Aussie trades 0.05 percent down at 0.6935, having hit a low of 0.6925 on Monday, it’s lowest since Dec. 26. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6904, a break below targets 0.6882. On the upside, resistance is located at 0.6977 (5-DMA), a break above could take it near 0.7004.
NZD/USD: The New Zealand dollar consolidated with narrow ranges amid a lack of immediate escalation between the United States and Iran. The Kiwi trades 0.1 percent up at 0.6677, having touched a low of 0.6644 on Friday, its lowest level since Dec. 26. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6698 (5-DMA), a break above could take it near 0.6736. On the downside, support is seen at 0.6622 (21-DMA), a break below could drag it below 0.6572.
Equities Recap
Asian shares rebounded amid a lack of escalation in the Middle East.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei rallied 1.4 percent to 23,524.37 points, Australia's S&P/ASX 200 index surged 1.4 percent to 6,828.40 points and South Korea's KOSPI gained 0.9 percent to 2,174.08 points.
Shanghai composite index rose 0.4 percent to 3,094.44 points, while CSI 300 index traded 0.5 percent up at 4,148.05 points.
Hong Kong’s Hang Seng traded 0.5 percent higher at 28,367.18 points. Taiwan shares shed 0.5 percent to 11,889.70 points.
Commodities Recap
Crude oil prices declined, retreating from their highest levels in months as the market calmed and braced for Iran’s response to the killing of its top military commander by the United States. International benchmark Brent crude was trading 0.4 percent lower at $68.12 per barrel by 0350 GMT, having hit a high of $70.73 on Monday, its highest since May 23. U.S. West Texas Intermediate was trading 0.4 percent down at $64.43 a barrel, after rising as high as $64.69 on Monday, its highest since April 30.
Gold prices eased from their highest in nearly seven years, amid a lack of immediate escalation between the United States and Iran. Spot gold fell 0.3 percent to $1,559.36 per ounce by 0353 GMT, having touched a high of $1588.16 on Monday, its highest since April 2013. U.S. gold futures fell 0.2 percent to $1,566.00.
Treasuries Recap
The Australian bonds gained slightly during Asian session of the second trading day of the week despite a fall in the United States’ Treasuries in the overnight session amid slowdown in the Iranian tensions. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, hovered around 1.216 percent, the yield on the long-term 30-year bond gained nearly 1-1/2 basis points to 1.845 percent and the yield on short-term 2-year suffered 1 basis point to 0.794 percent.
