Market Roundup
- U.S. Senate to vote on ending government shutdown, Trump wall impasse
- China says will step up fiscal spending this year to support economy
- Trump won't soften hardline on China to make trade deal-advisers
- BOJ Rate Decision, -0.10%, -0.10% f'cast, -0.10% prev
- Japan Dec Exports YY, -3.8%, -1.9% f'cast, 0.1% prev
- Japan Dec Imports YY, 1.9%, 3.7% f'cast, 12.5% prev
- Japan Dec Trade Balance Total Yen, -55.3 bln, -29.5 bln f'cast, -737.7 bln prev
- New Zealand Q4 CPI QQ, 0.1%, 0.0% f'cast, 0.9% prev
- New Zealand Q4 CPI YY, 1.9%, 1.8% f'cast, 1.9% prev
- BoJ cuts inflation forecasts
Economic Data Ahead
- (0245 ET/0745 GMT) France Jan Business Climate Mfg, 103 f'cast, 104 prev
- (1000 ET/1500 GMT) EZ Jan Consumer Confid. Flash, -6.5 f'cast, -6.2 prev
- (0600 ET/1100 GMT) GB Jan CBI Trends - Orders, 5 f'cast, 8 prev
Key Events Ahead
- (0430 ET/0930 GMT) Bank of England Deputy Governor of Monetary Policy Ben Broadbent gives speech at London Business School in London.
- (0915 ET/1415 GMT) Bank of England Deputy Governor for Prudential Regulation Sam Woods, Executive Director David Rule and Member of the Prudential Regulation Committee Sandra Boss will participate in Treasury Select Committee hearing on the work of the Prudential Regulation Authority in London
- (0930 ET/1430 GMT) Argentina Economy Minister Nicolas Dujovne scheduled for press conference in Davos, Switzerland.
FX Beat
DXY: The dollar index consolidated within narrow ranges, amid news that the Trump administration rejected an offer from China for preparatory trade talks this week ahead of negotiations scheduled for next week. The greenback against a basket of currencies trades flat at 96.30, having touched a high of 96.48 on Tuesday, its highest since Jan. 4. FxWirePro's Hourly Dollar Strength Index stood at 22.74 (Neutral) by 0500 GMT.
EUR/USD: The euro steadied near a 3-week low after data in the prior session showed German investor morale improved slightly in January, however, assessment of the economy's current condition deteriorating to a 4-year low limited the upside in the major. The European currency traded 0.1 percent up at 1.1366, having touched a low of 1.1336 on Friday, its lowest since Jan. 3. FxWirePro's Hourly Euro Strength Index stood at 16.63 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone consumer confidence, ahead of the U.S. Richmond Fed manufacturing index. Immediate resistance is located at 1.1402 (December 18 High), a break above targets 1.1442 (December 10 High). On the downside, support is seen at 1.1336 (Jan. 22 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar rose, halting a 2-day losing streak against the Japanese yen after the Bank of Japan cut its inflation forecasts and warned of rising risks to the economy from faltering global demand. The BoJ retained its ultra-easy monetary settings at its policy review, as risks to economy heightened. The major was trading 0.2 percent up at 109.60, having hit a high of 109.88 on Friday, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at -95.15 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Richmond Fed manufacturing index. 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 eased as there is no agreement in Britain on how it should exit the European Union on March 29. The major traded 0.1 percent down at 1.2945, having hit a high of 1.3000 on Thursday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 67.59 (Bullish) 0500 GMT. Investors’ attention will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3030 (November 15 High), a break above could take it near 1.3072 (November 14 High). On the downside, support is seen at 1.2879 (November 14 Low), a break below targets 1.2818 (January 14 Low). Against the euro, the pound was trading 0.2 percent down at 87.79 pence, having hit a high of 87.60 on Tuesday, it’s highest since November 15.
AUD/USD: The Australian dollar rebounded on news that China will step up fiscal spending this year to support its economy, including further cuts in taxes and fees for small firms. The Aussie trades 0.2 percent up at 0.7136, having hit a low of 0.7116 on Tuesday; it’s lowest since January 7. FxWirePro's Hourly Aussie Strength Index stood at -84.29 (Slightly Bearish) by 0500 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 0.7021 (October 26 Low). On the upside, resistance is located at 0.7180 (January 21 High), a break above could take it near 0.7246 (December 13 High).
NZD/USD: The New Zealand dollar rallied to a near 1-week low after data showed New Zealand's inflation edged up in the fourth quarter on higher service costs, forcing investors to cut some of the more aggressive bets on the prospects of RBNZ interest rate cut later in the year. The Kiwi trades 0.5 percent up at 0.6782, having touched a high of 0.6785 on Tuesday, its highest level January 17. FxWirePro's Hourly Kiwi Strength Index was at 144.58 (Highly Bullish) by 0500 GMT. Immediate resistance is located at 0.6862 (Nov.14 High), a break above could take it near 0.6911 (Dec. 11 High). On the downside, support is seen at 0.6726 (Jan. 7 Low), a break below could drag it below 0.6706 (Jan. 22 Low).
Equities Recap
Asian shares consolidated within thin a range, amid mounting signs of slowing global growth and concerns over a yet-unresolved U.S.-China trade dispute.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei declined 0.1 percent to 20,593.72 points, Australia's S&P/ASX 200 index plunged 0.3 percent to 5,843.70 points and South Korea's KOSPI rallied 0.4 percent to 2,127.03 points.
Shanghai composite index gained 0.05 percent to 2,580.10 points, while CSI300 index traded 0.1 percent down at 3,139.95 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 27,034.47 points. Taiwan shares shed 0.5 percent to 9,846.40 points.
Commodities Recap
Crude oil prices steadied on hopes that increased Chinese spending would curtail an economic slowdown that is showing signs of spreading. International benchmark Brent crude was trading 0.05 percent down at $61.47 per barrel by 0505 GMT, having hit a high of $63.12 on Monday, its highest since December 7. U.S. West Texas Intermediate was trading 0.1 percent lower at $52.93 a barrel, after rising as high as $54.30 on Tuesday, its highest since the December 5.
Gold prices eased, despite mounting concerns over a slowing global economic growth and uncertainty around U.S.-China trade tensions. Spot gold eased 0.1 percent down at $1,283.48 per ounce by 0511 GMT, having touched a low of $1,276.69 on Monday, its lowest level since Jan. 4. U.S. gold futures were also steady at $1,283.40 per ounce.
Treasuries Recap
The Australian government bond futures edged up as Asian equities slipped, with the 3-year bond contract rising 1.5 ticks to 98.225. The 10-year contract firmed 1 tick to 97.7100.
The yields on New Zealand 2-year government paper duly ticked up to 1.735 percent, from 1.71 percent.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 9 Canadian cents to yield 1.893 percent and the 10-year climbed 43 Canadian cents to yield 1.967 percent.
