Market Roundup
- United Kingdom Jan 2019 CBI Trends - Orders decrease To -1 balance (forecast 5 Balance) Vs previous 8 Balance
- EU's Moscovici says nobody want no deal, need to explore all options
- Former UK finance minister Osborne says Brexit delay is now most likely option - BBC
- UK trade minister says wouldn't be betting on an extension of article 50
Economic Data Ahead
- (0830 ET/1330 GMT) Statistics Canada is expected to report that retail sales declined 0.6 percent in November after rising 0.3 percent in October. While excluding autos, retail sales are likely to have eased 0.4 percent, after staying flat in the previous month.
- (1000 ET/1500 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for January. The index posted a drop of 8 in the prior month.
- (1000 ET/1500 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of January. The index posted a final reading of -6.2 in the prior month.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending February 3.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (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 steadied as investors awaited the U.S. Senate's vote on a pair of bills that could end the month-long partial shutdown of the federal government if passed. The greenback against a basket of currencies trades flat at 96.28, having touched a high of 96.48 on Tuesday, its highest since Jan. 4. FxWirePro's Hourly Dollar Strength Index stood at 39.70 (Neutral) by 1000 GMT.
EUR/USD: The euro consolidated near a 3-week low touched in the previous session, as investors remained cautious ahead of the European Central Bank policy decision due tomorrow. The European currency traded flat at 1.1358, having touched a low of 1.1336 on Friday, its lowest since Jan. 3. FxWirePro's Hourly Euro Strength Index stood at -49.07 (Neutral) by 1000 GMT. 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 gained against the safe-haven Japanese yen, after the Bank of Japan left monetary policy unchanged and cut its inflation forecasts. The major was trading 0.2 percent up at 109.63, having hit a high of 109.88 on Friday, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at -131.48 (Highly Bearish) by 1000 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 rallied above the1.3000 handle to hit a 2-1/2 month peak, as Britain's opposition Labour Party stated that it is highly likely next week to back an amendment that could prevent a disorderly no-deal exit from the European Union. The major traded 0.3 percent up at 1.3001, having hit a high of 1.3004 earlier; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 93.28 (Slightly Bullish) 1000 GMT. 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 0.3 percent up at 87.40 pence, having hit a high of 87.36, it’s highest since November 15.
USD/CHF: The Swiss franc slumped to a near 2-month low, as the greenback gained amid concerns of a slowing global economy. The major trades 0.1 percent up at 0.9984, having touched a high of 0.9990; it’s highest since December 5. FxWirePro's Hourly Swiss Franc Strength Index stood at -133.27 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0008 (December 5 High)and any break above will take the pair to next level till 1.0026 (October 26 High). The near-term support is around 0.9917 (December 17 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares surged, boosted by gains in retailer stocks, while sterling rallied over the 1.3000 handle, on growing hopes that no-deal Brexit can be averted.
The pan-European STOXX 600 index gained 0.2 percent at 355.61 points, while the FTSEurofirst 300 index rose 0.1 percent to 1,396.39 points.
Britain's FTSE 100 trades 0.1 percent down at 6,893.18 points, while mid-cap FTSE 250 eased 0.5 to 18,592.25 points.
Germany's DAX declined 0.05 percent at 11,087.44 points; France's CAC 40 trades 0.3 percent higher at 4,858.98 points.
Commodities Recap
Crude oil prices surged by more than 1 percent after China and Japan said they would use fiscal spending to curtail an economic slowdown that is weighing on global financial markets. International benchmark Brent crude was trading 1.01 percent up at $62.10 per barrel by 1031 GMT, having hit a high of $63.12 on Monday, its highest since December 7. U.S. West Texas Intermediate was trading 1.05 percent higher at $53.49 a barrel, after rising as high as $54.30 on Tuesday, its highest since the December 5.
Gold prices eased, as the greenback steadied amid mounting concerns of slowing global economy and uncertainties about the U.S.-China trade dispute. Spot gold edged down to $1,284.60 per ounce by 1036 GMT, having touched a low of $1,276.69 on Monday, its lowest level since Jan. 4. U.S. gold futures were up 0.1 percent at $1,284 per ounce.
Treasuries Recap
The Eurozone bond yields fell ahead of Thursday's European Central Bank meeting. The yield on Spain's 10-year government bond extended falls to a new 6- month low, and was last down 1.5 basis points to 1.329 percent, while other euro zone bond yields were around one basis point lower. The yield on Germany's 10-year government bond slipped marginally to around 0.235 percent, putting it on track for its third straight day of falls this week.
The Japanese government bond prices were steady, with the 5 and 20-year JGB yields unchanged at minus 0.160 percent and 0.455 percent, respectively. The 30-year yield dipped 1 basis point to 0.670 percent.
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.
