Market Roundup
- Gold prices edge higher
- Oil climbs as OPEC, allies weigh output cuts
- NZ unemployment rate drops in Q4
Economic Data Ahead
- (0400 ET/0900 GMT) EZ Markit Services PMI (Jan)
- (0400 ET/0900 GMT) EZ Markit PMI Composite (Jan)
- (0500 ET/1000 GMT) EZ Retail Sales (YoY) (Dec)
- (0500 ET/1000 GMT) EZ Retail Sales (MoM) (Dec)
Key Events Ahead
- (0310 ET/0810 GMT) ECB's De Guindos speech
- (0630 ET/1130 GMT) ECB's Lane speech
- (0715 ET/1215 GMT) ECB's President Lagarde speech
FX Beat
DXY: The dollar index rallied to a 1-week peak after a report from the U.S. Commerce Department showed a rise in new orders for U.S.-made goods by the most in nearly 1-1/2 years in December. The greenback against a basket of currencies traded 0.1 percent up at 97.92, having touched a low of 97.35 on Friday, its lowest since Jan. 17.
EUR/USD: The euro declined, extending losses for the third straight session, as estimates from the EU statistics office showed eurozone producer prices fell in December on the year for the fifth consecutive month and their decline was slower than in November. The European currency traded 0.1 percent down at 1.1034, having touched a high of 1.1095 on Friday, its highest since January 23. Investors’ attention will remain on a series of data from the Eurozone economies, EZ Markit PMI's, retail sales and ECB officials' speeches, ahead of the U.S. ADP employment change, Markit PMI's and ISM non-manufacturing PMI. Immediate resistance is located at 1.1083 (21-DMA), a break above targets 1.1118. On the downside, support is seen at 1.1019, a break below could drag it below 1.0992.
USD/JPY: The dollar retreated from a 1-1/2 week peak after the White House’s top economic adviser stated that the coronavirus would delay a surge in U.S. exports to China expected from the Phase 1 trade deal set to take effect later this month. However, China’s responses to the coronavirus outbreak supported investor confidence. The major was trading 0.1 percent down at 109.45, having hit a high of 109.54 on Tuesday, its highest since Jan. 24. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP employment change, Markit PMI's and ISM non-manufacturing PMI. Immediate resistance is located at 109.68, a break above targets 109.86. On the downside, support is seen at 109.26, a break below could take it near at 109.11.
GBP/USD: Sterling eased, hovering towards multi-week lows hit in the previous session, amid fears of a no trade deal is agreed at the end of an 11-month transition period which Johnson has repeatedly said he won’t ask to extend. The major traded 0.1 percent lower at 1.3015, having hit a low of 1.2941 on Tuesday, it’s lowest since Dec. 24. Investors’ attention will remain on the trade negotiations, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3061 (21-DMA), a break above could take it near 1.3083. On the downside, support is seen at 1.3000, a break below targets 1.2975. Against the euro, the pound was trading 0.05 percent up at 84.79 pence, having hit a low of 85.37 on Tuesday, it’s lowest since Jan. 20.
AUD/USD: The Australian dollar consolidated near a 1-week peak, as the country's top central banker said there were risks to cutting rates again, forcing markets to scale back wagers on an easing anytime soon. The Aussie trades 0.05 percent up at 0.6740, having hit a high of 0.6745 earlier, it’s highest since Jan. 30. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6718 (5-DMA), a break below targets 0.6700. On the upside, resistance is located at 0.6762, a break above could take it near 0.6791.
NZD/USD: The New Zealand dollar held above a 9-week low, as domestic unemployment rate fell in the final quarter of 2019 but jobs growth softened, cementing a view the central bank will stand pat on rates next week. The Kiwi trades flat at 0.6485, having touched a low of 0.6449 on Tuesday, its lowest level since Dec. 2. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6532 (10-DMA), a break above could take it near 0.6552. On the downside, support is seen at 0.6449, a break below could drag it below 0.6424.
Equities Recap
Asian shares surged as Chinese stocks nudged higher on hopes of additional stimulus to lessen the economic impact of a coronavirus outbreak.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.5 percent.
Tokyo's Nikkei surged 1.1 percent to 23,344.40 points, Australia's S&P/ASX 200 index rose 0.4 percent to 6,976.10 points and South Korea's KOSPI rallied 0.1 percent to 2,159.20 points.
Shanghai composite index rose 1.2 percent to 2,815.33 points, while CSI 300 index traded 1.1 percent up at 3,824.91 points.
Hong Kong’s Hang Seng traded 0.2 percent higher at 26,735.42 points. Taiwan shares added 0.2 percent to 11,573.62 points
Commodities Recap
Crude oil prices rebounded from multi-month lows, boosted by producers weighing further output cuts to counter a potential squeeze on global oil demand resulting from China’s fast-spreading coronavirus. International benchmark Brent crude was trading 1.5 percent higher at $54.61 per barrel by 0453 GMT, having hit a low of $53.68 on Tuesday, its lowest since Jan. 2019. U.S. West Texas Intermediate was trading 1.4 percent up at $50.13 a barrel, after falling as low as $49.42 on Tuesday, its lowest since Jan. 2019.
Gold prices rose, rebounding from a 2-week low recorded in the previous session, as a virus outbreak from China spread further and the death toll neared 500 dented investor risk appetite. Spot gold was trading 0.3 percent at $1,557.48 per ounce by 0500 GMT, having touched a low of $1549.15 on Tuesday, its lowest since Jan. 21. U.S. gold futures rose 0.2 percent to $1,558.40.
Treasuries Recap
The Japanese government bond prices eased, weighed down by weaker U.S. Treasuries. The benchmark 10-year JGB futures fell 0.18 point to 152.67. The yield on the benchmark 10-year cash JGBs rose 1.5 basis points (bps) to minus 0.040 percent. The two-year JGB yield rose 1 bp to minus 0.145 percent, while the five-year yield gained 1.5 bps to minus 0.145 percent. The super-long zone followed suit, with the 20-year yield tacking on 1.5 bps to 0.265 percent, while the 30-year yield gained 2.5 bps to 0.415 percent.
The Australian bonds plunged during Asian session tracking a similar movement in the United States’ Treasuries after Chinese equities experienced a rebound, following their biggest selloff since 2015 after the outbreak of the deadly Coronavirus. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped 11-1/2 basis points to 1.034 percent, the yield on the long-term 30-year bond surged 11 basis points to 1.631 percent and the yield on short-term 2-year gained over 9 basis points to trade at 0.746 percent.
