Market Roundup
- USD/JPY +0.55%, EUR/USD -0.15%, GBP/USD -0.3%
- DXY +0.2%, DAX -0.2%, Brent +0.9%, Iron -1.8%, Gold -0.2%
- BBC-UK will be unable to buy privileged access to single market after EU exit- UK official
- Le Pen plan raises franc questions over France's euro debt pile - Reuters News
- Germany Nov Industrial Orders -2.5% m/m vs +4.9% previous, -2.3% expected
- Germany Nov Retail Sales +3.2% y/y vs revised -0.8% previous
- EZ Nov Retail Sales +2.3% y/y vs revised +3.0% previous
- EZ Dec Business Climate 0.79 vs revised 0.41 previous, 0.44 expected
- EZ Dec Economic Sentiment 107.8 vs revised 106.6 previous, 106.8 expected
- EZ Dec Consumer Confidence Final -5.1 vs revised -6.2 previous, -5.1 expected
- EZ Dec Consumer Inflation Expectations 8.8 vs 6.3 previous
- Japan government spokesman-Toyota is an important corporate citizen in the U.S.
- Japan chief government spokesman: temporarily recall ambassador to S. Korea
- Japan suspends talks on FX swap with S. Korea over comfort women statue
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of December. The report is likely to show 178,000 jobs were added compared with a similar increase in November.
- (0830 ET/1330 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of December. The rate stood at 62.7 percent in the previous month.
- (0830 ET/1330 GMT) The U.S. Labor Department is expected to report that unemployment rate increased to 4.7 percent in December from 4.6 percent in November.
- (0830 ET/1330 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in December after declining 0.1 percent in the month before.
- (0830 ET/1330 GMT) The United States releases trade balance figures for the month of November. The economy's trade deficit is expected to have narrowed to $42.5 billion from 42.6 billion in October.
- (0830 ET/1330 GMT) The Statistics Canada is likely to report that international trade deficit expanded to C$1.60 billion in November from C$1.13 billion in October.
- (0830 ET/1330 GMT) The Statistics Canada releases employment report for December. The economy is unlikely to have added any jobs, compared to a rise of 10,700 jobs in November, while the participation rate stood at 65.6 percent in the same month.
- (0830 ET/1330 GMT) Canada's unemployment rate is expected to edge up 6.9 percent in December from 6.8 percent in the previous month.
- (1000 ET/1500 GMT) The United States is likely to report that factory orders declined 2.2 percent in November, after posting a rise of 2.7 percent in the prior month.
- (1000 ET/1500 GMT) The Richard Ivey School of Business releases Canada's seasonally adjusted Ivey Purchasing Managers Index for the month of December. The index posted a reading of 56.8 in the prior month.
- N/A China releases Foreign Exchange Reserves report for the month of December.
Key Events Ahead
- (1115 ET/1615 GMT) Federal Reserve Bank of Chicago President Charles Evans participates in a panel, "Responders of First or Last Resort: Central Bank Strategies in an Era of Ultra-Low Interest Rates" hosted by the National Association for Business Economics and the American Economic Association, in Chicago.
- (1145 ET/1645 GMT) FedTrade operation 30-year Ginnie Mae max $1.300 bln
- (1300 ET/1800 GMT) Federal Reserve Bank of Richmond President Jeffrey Lacker speaks before the Maryland Bankers Association in Baltimore.
- (1530 ET/2030 GMT) Dallas Federal Reserve President Robert Kaplan will give his views on the global economic outlook.
FX Beat
DXY: The dollar regained most of its lost ground versus its major peers, as investors await the U.S. non-farm payroll report for clues on the pace of possible Fed interest rate hikes this year. The greenback against a basket of currencies traded 0.2 percent higher at 101.63, pulling away from a low of 101.30 hit on Thursday, its lowest since Dec. 14. FxWirePro's Hourly Dollar Strength Index stood at -112.28 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro declined below the 1.0600 handle, despite better than expected Eurozone economic sentiment. The continent's economic sentiment rose to 107.8 in December from 106.6 in November, beating estimates of 106.8. The European currency traded 0.1 percent down at 1.0595, having touched a high of 1.0615 in the previous session, its highest since Dec. 30. FxWirePro's Hourly Euro Strength Index stood at 89.34 (Bullish) by 1000 GMT. The pair should break below 1.04800 for minor weakness and any break below 1.04300/1.03800. On the higher side, any break above 1.0620 will take it to next level till 1.06700/1.0745.
USD/JPY: The dollar regained the 116.00 handle after declining to an early low of 115.07, as investors expect the fiscal policy by Trump administration would lead to faster U.S. economic growth. Moreover, markets await U.S. non-farm payroll data, which is likely to remain steady around 175k in December. However, prevalent risk-aversion sentiment and declining Treasury bond yields might weaken the bid tone around the major. The pair trades 0.6 percent higher at 116.05, having hit an intra-day low of 115.07, it’s lowest since Dec. 14. FxWirePro's Hourly Yen Strength Index stood at 6.86 (Neutral) by 1000 GMT. The major resistance is around 116.17 (21- day EMA) and break above targets 17.25 (61.8% retracement of 118.16 and 115.07)/118. On the lower side, minor support is around 114.98 (50% retracement of 111.35 and 118.66) and any break below targets 114.10/112.85.
GBP/USD: Sterling eased, reversing most of its previous session gains, as worries over likely economic impact due to Brexit and board based greenback strength weighed on the British currency. However, the pound was set for a second week of gains against the dollar and its first against a basket of currencies since the start of December. Sterling trades 0.2 percent lower at 1.2385, hovering away from ay high of 1.2431 hit on Thursday, it’s highest since Dec. 19. FxWirePro's Hourly Sterling Strength Index stood at -98.89 (Slightly Bearish) by 1000 GMT. Any close above 1.2450 will take the pair to next level till 1.2510/1.2550 (61.8% retracement of 1.27747 and 1.22005). On the lower side, short term support stands at 1.2323 and any break below will drag it down till 1.2285 (61.8% retracement of 1.21988 and 1.24300)/1.2200 level. Against the euro, the pound trades 0.3 percent down at 85.61 pence, hovering towards a near 1-week low of 85.81 hit the day before.
USD/CHF: The Swiss franc edged down, after rising to a near 1-week high of 1.0151 in the previous session, as the greenback attempted a major recovery across the board. The dollar trades 0.1 percent up at 1.0111, attempting to sustain gains above the 1.0100 handle. FxWirePro's Hourly Swiss Franc Strength Index stood at 71.56 (Bullish) by 1000 GMT. Any break below 1.000 will drag the pair down till 1/0.9909/0.9830 (200- day MA). On the higher side, a break above 1.0335 will take it to next level till 1.04180 (161.8% retracement of 1.03435 and 1.02179) in the short term.
AUD/USD: The Australian dollar rose, extending gains for the fourth straight session after data showed the economy registered its first trade surplus in almost three years in November. The Aussie trades 0.14 percent up at 0.7343, having hit a high of 0.7356 on Thursday, its highest since Dec. 16 and has gained nearly 2 percent for the week. FxWirePro's Hourly Aussie Strength Index stood at 134.61 (Highly Bullish) by 1100 GMT. On the higher side, any close above 0.7348 (200- 4H MA) will take the pair to next level till 0.7396 (38.2% retracement of 0.7783 and 0.7160)/0.7450. The minor support is around 0.7300 and a break below will drag it till 0.7256 (60 4H EMA)/0.7200.
NZD/USD: The New Zealand dollar rallied to a 3-week high above the 0.7000 handle, amid stalled greenback selling pressure, with investors focused on U.S. non-farm payrolls report due later in the day. The Kiwi trades 0.02 percent up at 0.7027, having hit a high of 0.7043 earlier in the session, its highest since Dec. 16, and has gained 1.1 percent this week FxWirePro's Hourly Kiwi Strength Index was at 104.35 (Highly Bullish) by 1100 GMT. Immediate resistance is located at 0.7050 (Dec 16 High), a break above could take it till 0.7100. On the downside, support is seen at 0.6981 (21-DMA), a break below could drag it near 0.6950.
Equities Recap
European shares declined, weighed down by commodity-related stocks, however, were on track for its best weekly performance since mid-December.
The pan-European STOXX 600 index decreased 0.3 percent at 364.53 points, while the FTSEurofirst 300 index tumbled 0.3 percent at 1,440.48 points.
Britain's FTSE 100 trades 0.03 percent down at 7,193.47 points, while mid-cap FTSE 250 advanced 0.05 percent at 18,317.34 points.
Germany's DAX edged down 0.27 percent at 11,553.55 points; France's CAC 40 trades 0.5 percent lower at 4,876.50 points.
Tokyo's Nikkei fell 0.34 percent to 19,424.33 points, Australia's S&P/ASX 200 index ended flat 0.32 percent to 5,753.10 points and South Korea's KOSPI rose 0.35 percent at 2,049.12 points.
Shanghai composite index declined 0.4 percent at 3,154.32 points, while CSI300 index tumbled 0.6 percent at 3,347.67 points. Hong Kong’s Hang Seng added 0.2 percent at 22,503.01 points.
Commodities Recap
Crude oil prices rose, extending gains for the third consecutive session, on news that Saudi Arabia had cut production to meet OPEC's agreement to curb global oversupply. International benchmark Brent crude was trading 0.40 percent higher at $57.11 per barrel by 0952 GMT, having hit a peak of $58.35 earlier in the week, its strongest since July 2015. U.S. West Texas Intermediate crude rose 0.37 percent at $53.95 a barrel, after rising as high as $55.21 on Tuesday, it’s highest since July 2015.
Gold prices eased, reversing some of its previous session gains, as investors shifted attention towards the U.S. jobs data for clues on the pace of likely U.S. interest rate hikes this year. Spot gold declined 0.1 percent to $1,178.31 per ounce by 0955 GMT, having hit its highest since Dec. 5 at $1,184.81 on Thursday. U.S. gold futures were down 0.4 percent, at $1,177 per ounce.
Treasuries Recap
The U.S. Treasuries rallied on Friday, alongside a pullback in equities as markets looked to rebalance following the considerable selling was seen since the November US election. The yield on the benchmark 10-year Treasury note fell 1-1/2 basis points to 2.35 percent, the super-long 30-year bond yield also dipped 1-1/2 basis points to 2.94 percent and the yield on short-term 2-year note slid 1 basis point to 1.17 percent.
The 10-year Portuguese/German bond yields spread widened to an 11-month high of nearly 380 basis points post dovish FOMC December meeting minutes. Also, the benchmark 10-year Italian/German yield spread widened towards 170 basis points for the first time since shortly after Italy's constitutional referendum.
The UK gilts slumped as investors moved away from safe-haven buying amid gains in riskier assets including crude oil and equities (FTSE100 hits record high). The yield on the benchmark 10-year gilts rose 3-1/2 basis points to 1.33 percent, the super-long 30-year bond yield climbed 3 basis points to 1.98 percent and the yield on short-term 2-year bounced 5 basis points to 0.16 percent.
German bunds traded mixed after recent data showed that the country’s retail sales rose more-than-expected in December. On the other hand, industrial orders fell more than expected in November after surging in the prior month. The yield on the benchmark 10-year bond fell 1/2 basis point to 0.25 percent, the long-term 30-year bond yields dipped 1 basis point to 0.99 percent and the yield on short-term 2-year bond bounced 2 basis points to -0.70 percent.
Japanese government bonds traded modestly firmer following an overnight rally in U.S. government bonds. The benchmark 10-year bond yields fell 1 basis point to 0.05 percent, the long-term 30-year bond yields dipped 1-1/2 basis points to 0.74 percent and the yield on short-term 2-year note slid 1 basis point to -0.20 percent.
New Zealand government bonds gained following firmness in the U.S. Treasuries post dovish FOMC December meeting minutes. In intraday trading, the yield on the benchmark 10-year bond fell 5-1/2 basis points to 3.20 percent, the yield on 7-year note dipped 3-1/2 basis points to 2.84 percent and the yield on 5-year note slid 2-1/2 basis points to 2.58 percent.
Australian government bonds traded modestly firmer as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year Treasury note fell 1 basis point to 2.70 percent, the yield on 15-year note dipped 1-1/2 basis points to 3.16 percent and the yield on short-term 2-year slid 1 basis point to 1.86 percent.
