Market Roundup
- BoE: Significant decrease in demand for borrowing by small and medium-sized firms in Q4, expected to fall again for small businesses in Q1
- Bank of England says demand for buy-to-let mortgage lending increased significantly in Q4, expected to fall in Q1
- Bank of England says banks expect availability of unsecured household credit to decrease slightly in Q1
- Bank of England says banks predict slight increase in availability of mortgage lending in Q1
- Czech November c/a balance czk 4.57 bln vs forecast of czk 9.0 bln (October 16.99 bln)
- Swedish household consumption +3.3 pct y/y in Nov - stats office
- Swedish household consumption +0.3 pct m/m in Nov - stats office
- Turkish economy minister says exports, domestic consumption to contribute to growth in Q4
- Turkish economy minister tells Anadolu agency inflation at around 8.5 pct reflects forex volatility, this is temporary
- Turkish economy minister says believes exchange rate will not create a risk for turkey
- Brazil Nov IBC-BR Economic activity increase to 0.2 % (forecast -0.1 %) vs previous -0.48 %
- Germany Dec wholesale price index yy increase to 2.8 % vs previous 0.8 %
- Germany Dec wholesale price index mm increase to 1.2 % vs previous 0.1 %
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that retail sales rose 0.7 percent in December, after edging up 0.1 percent in November. While excluding autos, retail sales are likely to have gained 0.5 percent, after surging 0.2 percent in the previous month.
- (0830 ET/1330 GMT) The U.S. producer price index is likely to have gained 0.3 percent in December after rising 0.4 percent in November, while in the 12 months through December, it is expected to have advanced 1.6 percent. PPI excluding food and energy probably edged up 0.1 percent after surging 0.4 percent in the prior month.
- (1000 ET/1500 GMT) The University of Michigan is likely to report that U.S. preliminary consumer sentiment index rose to 98.5 in January, after posting a final reading of 98.2 in December.
- (1000 ET/1500 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.5 percent in November, after declining 0.2 percent in October.
- (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0930 ET/1430 GMT) Philadelphia Fed chief Patrick Harker speaks on "economic mobility" before a Benjamin Franklin Birthday Celebration in Philadelphia, Pennsylvania.
FX Beat
DXY: The dollar eased across the board, weighed down by a fall in the U.S. Treasury yields and diminishing expectations of aggressive U.S. fiscal policies. The greenback against a basket of currencies traded 0.3 percent down at 101.15, drifting towards a low of 100.72 hit on Thursday, its lowest since Dec. 8. FxWirePro's Hourly Dollar Strength Index stood at -110.22 (Highly Bearish) by 0900 GMT.
EUR/USD: The euro rose, extending gains for the third consecutive session, as the greenback eased despite recent upbeat economic data from the U.S. docket and revived prospects of further tightening of the monetary conditions by the Federal Reserve this year. Moreover, uncertainty regarding Trump administration to boost the economic growth through fiscal stimulus weighed on the dollar. The European currency trades 0.2 percent higher at 1.0633, hovering towards a peak of 1.0684 hit on Thursday, its highest since Dec 8. FxWirePro's Hourly Euro Strength Index stood at 13.06 (Neutral) by 0900 GMT. The pair should close above 1.06702 (61.8% retracement of 1.08735 and 1.03422) for further jump till 1.0705-10 (38.2% Fibonacci retracement of 1.1300-1.0340)/ 1.0740-45 (100% projection of 1.0340-1.0627 measuring from 1.0454)/1.0875. On the lower side, any break below 1.0600 will drag it down till 1.0556 (30- day EMA) /1.0480/ 1.0450.
USD/JPY: The dollar's recovery momentum stalled after weaker-than-expected Chinese trade figures triggered a fresh bout of risk-off market sentiment, which boosted the Japanese Yen's safe-haven appeal. The major fell back below the 115.00, reversing most of all of its daily gains, as a drop in the U.S. Treasury yields dragged the greenback lower. The major trades 0.05 percent up at 114.76, after touching a low of 113.75 in the previous session, its lowest since Dec. 8. FxWirePro's Hourly Yen Strength Index stood at 41.27 (Neutral) by 0900 GMT. The major resistance is around 115.35 (30- day EMA) and any break above will take the pair till 116.75 (61.8% retracement of 118.61 and 113.75) /117.53 (Jan 9 High)/118. On the lower side, minor support is around 113.10 (Dec 12 Low) and any break below targets 112.85/112.
GBP/USD: Sterling gained, reversing most of its previous session losses, as the greenback weakened amid a fall in the U.S. Treasury bond yields. The major hit a high of 1.2316 in the previous session, however, it ended lower at 1.2157 on news that Prime Minister Theresa May will deliver a speech next Tuesday, which could trigger concerns of hard Brexit. Sterling trades 0.2 percent higher at 1.2188, pulling further away from a low of 1.2107 hit on Wednesday, its weakest since Oct. 25. FxWirePro's Hourly Sterling Strength Index stood at -9.04 (Neutral) by 0900 GMT. The upside remains capped by 1.2340 (30- day EMA) and any break above will take the pair till 1.2365/1.2435. Any close above 1.2450 will take it till 1.2510/1.2550 (61.8% retracement of 1.27747 and 1.22005). On the lower side, short term support stands at 1.20000 and any break below will drag it till 1.19048. Against the euro, the pound trades 0.1 percent down at 87.32 pence, hovering towards a low of 87.63 hit on Tuesday, it’s lowest since Nov. 10.
USD/CHF: The Swiss franc rose, extending gains for the third straight session, as the greenback eased on diminishing expectations over aggressive U.S. fiscal policies. The dollar trades 0.3 percent down at 1.0078, hovering towards a 2-week low of 1.0056 hit on Thursday. FxWirePro's Hourly Swiss Franc Strength Index stood at 18.47 (Neutral) by 0900 GMT. The pair should break below 1.0050 for further bearishness to continue and any break below will drag it down till 1 (psychological support as well as 100% projection of 1.0335-1.0087 measuring from 1.0248) /0.9945 (50% retracement of 0.9550 and 1.0344). On the higher side, near term resistance is around 1.0150 and any break above 1.0150 will take it till 1.0175 (61.8% retracement of 1.0248 and 1.00561)/1.0200/1.0250 (Jan 11 High).
AUD/USD: The Australian dollar rallied, hovering towards a 4-week high hit in the prior session, despite downbeat Chinese trade figures. Moreover, subdued action in the crude oil and weakness in copper prices limited the upside in the major. The Aussie trades 0.15 percent up at 0.7494, having hit a high of 0.7518 on Thursday, it’s highest since Dec. 14. FxWirePro's Hourly Aussie Strength Index stood at 85.84 (Slightly Bullish) by 0900 GMT. On the higher side, any close above 0.7500 (200- day MA) will take the pair to next level till 0.7545 (61.8% retracement of 0.7778 and 0.71599)/0.7600. The minor support is around 0.7435 (89-day EMA) and break below will drag it till 0.7400 (60- day EMA)/0.7340 (30- day EMA).
NZD/USD: The New Zealand dollar rose above the 0.7100 handle, extending gains for the third consecutive day as the U.S. dollar eased across the board. However, weak China export growth figures limited the upside in the major. The Kiwi trades 0.4 percent up at 0.7121, drifting towards a high of 0.7144 hit in the previous day, its highest since Dec. 14. FxWirePro's Hourly Kiwi Strength Index was at 62.59 (Bullish) by 0900 GMT. Immediate resistance is located at 0.7144 (Previous Session High), a break above could take it till 0.7200. On the downside, support is seen at 0.7069 (Dec- 5 Low), a break below could drag it lower 0.7050.
Equities Recap
European shares advanced, led higher by bank stocks, while the dollar eased and was poised for its biggest weekly fall in two months.
The pan-European STOXX 600 index increased 0.47 percent to 364.22 points, while the FTSEurofirst 300 index soared 0.5 percent to 1,440.33 points.
Britain's FTSE 100 trades 0.4 percent up at 7,324.62 points, while mid-cap FTSE 250 climbed 0.18 percent at 18,335.61 points.
Germany's DAX advanced 0.5 percent at 11,580.85 points; France's CAC 40 trades 0.5 percent higher at 4,887.82 points.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.1 percent, however, was up 1.8 percent for the week.
Tokyo's Nikkei rose 0.80 percent to 19,287.28 points, Australia's S&P/ASX 200 index declined 0.83 percent to 5,719.20 points and South Korea's KOSPI fell 0.50 percent to 2,076.79 points.
Shanghai composite index tumbled 0.2 percent at 3,112.76 points, while CSI300 index gained 0.1 percent at 3,319.91 points. Hong Kong’s Hang Seng shed 0.5 percent at 22,829.02 points.
Commodities Recap
Crude oil prices nudged down, as concerns that crude production cuts would not go deep enough to restrain a global fuel supply glut weighed on market sentiment. International benchmark Brent crude was trading down at $56.02 per barrel by 0846 GMT, having touched a low of $53.57 on Wednesday, it’s weakest since Dec. 15. U.S. West Texas Intermediate crude rose 0.08 percent at $53.05 a barrel, after slumping as low as $50.69 earlier in the week.
Gold prices edged up, hovering towards a 7-week peak hit in the previous session and was set to end higher for a third straight week, as weaker-than-expected Chinese data triggered a fresh bout of risk-off sentiment. Spot gold inched up 0.05 percent to $1,195.40 per ounce by 0950 GMT, having touched its highest since Nov. 23 at $1,206.83 on Thursday. U.S. gold futures eased 0.5 percent to $1,193.80 per ounce.
Treasuries Recap
The U.S. witnessed extended gains alongside a pullback in equities as markets continue to seek balance with respect to the incoming administration's fiscal and economic policies. The yield on the benchmark 10-year Treasury rose 1 basis point to 2.35 percent, the super-long 30-year bond yield moved nearly 1 basis point lower to 2.95 percent and the yield on short-term 2-year note slid around 1-1/2 basis points to 1.16 percent.
The UK gilts traded range bound in thin trading activity during a relatively quiet session that witnessed data of little significance. Also, investors are closely eyeing the release of consumer inflation and retail sales data scheduled for release next week. The yield on the benchmark 10-year gilts, rose nearly 2-1/2 basis points to 1.32 percent, the super-long 30-year bond yield also climbed 2-1/2 basis points to 1.98 percent and the yield on short-term 2-year moved 1/2 basis point higher to 0.16 percent.
The German bunds traded narrowly mixed ahead of the release of consumer inflation data scheduled for next week. Investors now await further clarification of future fiscal and economic policies. The yield on the benchmark 10-year bond, which moves inversely to its price, rose nearly 1 basis point to 0.32 percent, the long-term 30-year bond yields also moved 1-1/2 basis points higher to 1.05 percent while the yield on short-term 2-year bond hovered around -0.71 percent.
The Japanese government bonds traded modestly lower as investors cashed in profits on the last trading day of the week after relishing previous gains, observing a relatively subdued trading session amid mild selling in the U.S. Treasures across the curve post the super-long 30-year bond auction held Thursday. The benchmark 10-year bond yield, rose 1/2 basis point to 0.05 percent, the long-term 30-year bond yields hovered around 0.74 percent and the yield on short-term 2-year note also remained flat at -0.21 percent.
The New Zealand government bonds remained modestly weak observing a relatively subdued trading session amid mild selling in the U.S. Treasures across the curve, following the 30-year bond auction that concluded on Thursday. The yield on the benchmark 10-year bonds, rose 1-1/2 basis points to 3.14 percent, the yield on 7-year note also climbed nearly 2 basis points to 2.81 percent and the yield on the short-term 5-year note moved 1-1/2 basis points higher to 2.55 percent.
The Australian 10-year bonds sagged as investors cashed in profits after relishing previous gains. Also, investors are curiously eyeing next week unemployment rate for further direction in the debt market. The 10-yield on the benchmark 10-year Treasury note, rose nearly 3 basis points to 2.70 percent, the yield on 15-year note also surged almost 3 basis points to 3.14 percent and the yield on short-term 2-year moved up 3 basis points to 1.86 percent.
