Market Roundup
- End 'no-deal brinkmanship' and let's talk, Britain's Corbyn tells May
- Don't hijack Brexit, minister warns Britain's parliament
- Trump says no amnesty for 'Dreamers,' signals support in broader deal
- China should boost banks' active support for economy - c.bank official
- China Q4 GDP YY, 6.4%, 6.4% f'cast, 6.5% prev
- China Q4 GDP QQ, 1.5%, 1.5% f'cast, 1.6% prev
- China 2018 GDP YY 6.6%, 6.6% f'cast, 6.7% prev
- China Dec Industrial Output YY, 5.7%, 5.3% f'cast, 5.4% prev
- China Dec Retail Sales YY, 8.2%, 8.2% f'cast, 8.1% prev
- China Dec Urban investment (ytd) yy, 5.9%, 6.0% f'cast, 5.9% prev
- Japan Jan Reuters Tankan DI, 18, 23 prev
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Dec Producer Prices MM, -0.2% f'cast, 0.1% prev
- (0200 ET/0700 GMT) Germany Dec Producer Prices YY, 2.9% f'cast, 3.3% prev
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index declined from a 2-week peak, amid holiday thinned-trading as the U.S. financial markets remained closed on Monday for Martin Luther King Jr. Day. The greenback against a basket of currencies trades 0.1 at 96.25, having touched a high of 96.39 on Friday, its highest since Jan. 4. FxWirePro's Hourly Dollar Strength Index stood at 56.51 (Bullish) by 0500 GMT.
EUR/USD: The euro rebounded from a 2-week low touched in the previous session, as the greenback eased on expectations that the U.S. Federal Reserve will pause its multi-year interest rate hike cycle. The European currency traded 0.1 percent up at 1.1374, having touched a low of 1.1353 on Friday, its lowest since Jan. 4. FxWirePro's Hourly Euro Strength Index stood at 2.82 (Neutral) by 0500 GMT. Investors’ attention will remain on German producer price index, as U.S. markets remain closed on account of Martin L.King's Birthday. Immediate resistance is located at 1.1442 (December 10 High), a break above targets 1.1500 (November 7 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 edged down from a 3-week peak after data showed China's economy slowing further in the last quarter of 2018, indicating that the U.S.-China trade friction has already put pressure on the Chinese economy. The major was trading 0.2 percent down at 109.59, having hit a high of 109.88 on Friday, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at -54.95 (Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. 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 steadied after easing from a 2-month peak in the previous session on weaker-than-expected British retail sales that confirmed a slowdown in consumer spending as Brexit deadline looms. The major traded flat at 1.2870, having hit a high of 1.3000 on Thursday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 73.50 (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 0.2 percent down at 88.39 pence, having hit a high of 87.63 on Thursday, it’s highest since November 15.
AUD/USD: The Australian dollar gained, despite China's economic growth data coming in below previous quarter reading, confirming fears the Chinese economy was losing momentum. The Aussie trades 0.2 percent up at 0.7173, having hit a low of 0.7146 on Thursday; it’s lowest since January 9. FxWirePro's Hourly Aussie Strength Index stood at -35.35 (Neutral) 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 slumped to a 2-week low, as investors expect New Zealand's inflation data due Wednesday to ease at the end of last year, adding to growing speculation the central bank may be forced to cut interest rates later in 2019. The Kiwi trades 0.2 percent down at 0.6730, having touched a low of 0.6714 earlier, its lowest level January 8. FxWirePro's Hourly Kiwi Strength Index was at -125.71 (Highly Bearish) by 0500 GMT. 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 edged higher despite data out from China showed the economy slowed at the end of last year, underlining the urgent need for more stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.4 percent.
Tokyo's Nikkei rose 0.3 percent to 20,719.33 points, Australia's S&P/ASX 200 index climbed 0.2 percent to 5,890.40 points and South Korea's KOSPI declined 0.05 percent to 2,124.23 points.
Shanghai composite index gained 0.4 percent to 2,606.00 points, while CSI300 index traded 0.3 percent up at 3,178.90 points.
Hong Kong’s Hang Seng traded 0.3 percent higher at 27,173.34 points. Taiwan shares shed 0.5 percent to 9,889.40 points.
Commodities Recap
Crude oil prices rallied to their highest for 2019 after data showed refinery processing in China climbed to a record in 2018, despite a slowing economy last year. International benchmark Brent crude was trading 0.4 percent up at $62.92 per barrel by 0452 GMT, having hit a high of $63.05, its highest since December 7. U.S. West Texas Intermediate was trading 0.4 percent higher at $54.00 a barrel, after rising as high as $52.13, its highest since the December 11.
Gold prices held firm as expectations that the U.S. Federal Reserve will pause its multi-year interest rate hike cycle, were offset by a recovery in investor risk appetite. Spot gold was trading flat at $1,281.29 per ounce by 0458 GMT, having touched a low of $1,280.54 on Friday, its highest level since June 15. U.S. gold futures were steady at $1,282 per ounce.
Treasuries Reap
The Japanese government bonds remained mixed on the first 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 higher at 0.006 percent, the yield on the long-term 30-year note hovered around 0.700 percent while the yield on short-term 2-year slumped 17 basis points to -0.169 percent.
The Australian government bonds slumped across the curve during Asian trading session on hopes of an end to the U.S.-China trade spat. However, weak Chinese economic growth data limited further upside. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1-1/2 basis points to 2.326 percent, the yield on the long-term 30-year bond climbed 1/2 basis point to 2.852 percent and the yield on short-term 2-year up about 2 basis points to 1.909 percent.
