Market Roundup
• Italian Nov Industrial New Orders (MoM) -0.3%, 0.0% forecast, 0.6% previous
• Italian Nov Industrial New Orders (YoY) -4.3%,-2.4% forecast, -1.5% previous
• Italian Nov Industrial Sales (MoM) 0.00%,-0.80% forecast, 0.60% previous
• Italian Nov Italian Industrial Sales (YoY) 0.10%, -0.40% forecast, -0.20% previous
• UK Dec Public Sector Net Borrowing 4.04B, 4.60B forecast, 4.20B previous
• U K Dec Public Sector Net Cash Requirement 16.596B,9.515B previous
• U K Jan CBI Industrial Trends Orders -22, -25 forecast, -28 previous
Looking Ahead - Economic Data (GMT)
• US Chicago Fed National Activity 0.56 previous
• Canada Common CPI (YoY) 1.9% previous
• Canada Dec Core CPI (MoM) -0.2% previous
• Canada Dec Core CPI (YoY) 1.9%,1.9% previous
• Canada Dec CPI (MoM) 0.1%,-0.1% previous
• Canada Dec CPI (YoY) 2.2% forecast,2.2% previous
• Canada Nov Wholesale Sales (MoM) -0.3%,-1.1% previous
• US Redbook (MoM) -0.2% previous
• US Redbook (YoY) 5.0% previous
• US Dec Existing Home Sales 5.43M, 5.35M previous
• US Dec Existing Home Sales (MoM) 1.3%,-1.7% previous
• Canada BoC Interest Rate Decision 1.75% forecast, 1.75% previous
• Brazil Foreign Exchange Flows 1.110B previous
Looking Ahead - Events, Other Releases (GMT)
• N/A Canada BoC Rate Statement
• 16:15 BOC Press Conference
Currency Summaries
EUR/USD: The euro was little changed against the U.S. dollar on Wednesday, as traders awaited more details ECB on policy tone. The euro was locked in a narrow range before a European Central Bank (ECB) meeting on Thursday where it is expected to launch a comprehensive review of central bank strategy, including the ECB’s inflation target. Trading in key currencies is likely to be subdued as investors try to assess how major central banks will respond to receding risks to the global economic outlook. Immediate resistance can be seen at 1.1118(11 DMA), an upside break can trigger rise towards 1.1131(21 DMA).On the downside, immediate support is seen at 1.1065 (100 DMA), a break below could take the pair towards 1.1000 (Psychological level).
GBP/USD: Sterling strengthened against dollar on Wednesday, as investors debated whether or not the Bank of England will cut interest rates when it meets next week. Data on Tuesday showed the British economy created jobs at its strongest rate in nearly a year in the three months to November, possibly weakening the case for an imminent rate cut and boosting sterling. Economists had expected regular pay to grow by 3.4%, although with low inflation earnings are rising in real terms. For many now the key focus is Friday’s January purchasing managers’ index widely viewed as a forward-looking indicator that could swing the rate debate one way or another. Immediate resistance can be seen at 1.3134(Daily High), an upside break can trigger rise towards 1.3205(Higher BB).On the downside, immediate support is seen at 1.3038 (9 DMA), a break below could take the pair towards 1.2953 (20th Jan low).
USD/CHF: The dollar strengthened against the Swiss franc on Wednesday, as Swiss franc dipped on signs the central bank may be intervening to stop it rising further, outweighing the impact of concerns about the spread of a new coronavirus that have driven investors into safe-haven assets this week. The franc dropped against both the dollar and euro, falling as much as 0.5% against the single currency. Immediate resistance can be seen at 0.9727 (Daily High), an upside break can trigger rise towards 0.9764 (Jan 9th high).On the downside, immediate support is seen at 0.9682 (Daily Low), a break below could take the pair towards 0.9620 (Lower BB).
USD/JPY: The dollar gained against the Japanese yen on Wednesday, as updates from China about the spread of a new flu-like coronavirus raised hopes the outbreak would be contained. China’s National Health Commission said on Wednesday there were 440 cases of the new virus, with nine deaths so far. Measures are now in place to minimize public gatherings in the most-affected regions. The dollar index against a basket of six major currencies stood at 97.59, near the highest level in a month. Strong resistance can be seen at 110.08 (Daily High), an upside break can trigger rise towards 111.00 (Psychological level).On the downside, immediate support is seen at 109.69 (11 DMA), a break below could take the pair towards 109.33 (21 DMA).
Equities Recap
European shares bounced back on Wednesday as China’s efforts to contain a coronavirus outbreak eased worries of a global pandemic, while the trade-sensitive German shares hit record levels.
At (GMT 12:15),UK's benchmark FTSE 100 was last trading lower at 0.30 percent, Germany's Dax was up by 0.14 percent, France’s CAC was last up by 0.04 percent.
Commodities Recap
Gold prices slipped on Wednesday as the dollar firmed and Chinese health officials said they had stepped up protective measures in hospitals to counter the new coronavirus that has raised fears of a global pandemic.
Spot gold fell 0.2% to $1,554.54 an ounce by 0758 GMT, extending losses that took prices to their lowest since Jan. 15 in the previous session at $1,545.96.U.S. gold futures were down 0.3% at $1,553.80.
Oil prices fell on Wednesday as a market surplus forecast by the International Energy Agency (IEA) outweighed concern over disruptions to Libya’s crude output.
Brent crude was down 39 cents, or 0.6%, at $64.20 a barrel by 1140 GMT. West Texas Intermediate also fell 39 cents, or 0.7%, to $57.99.
Treasuries Recap
U.S.: The U.S. Treasuries steadied during Wednesday’s afternoon session amid a muted trading session that witnessed data of little economic significance ahead of the country’s 10-year TIPS auction and initial jobless claims, scheduled to be released on January 23 by 18:00GMT and 13:30GMT. The yield on the benchmark 10-year Treasury yield traded flat at 1.772 percent, the super-long 30-year bond yield hovered around 2.227 percent and the yield on the short-term 2-year too remained flat at 1.528 percent.
UK: The United Kingdom’s gilts remained tad higher during European trading hours Wednesday ahead of the country’s flash PMIs for the month of January, scheduled to be released on January 24 by 09:30GMT. The yield on the benchmark 10-year gilts, suffered 1 basis point to 0.619 percent, the 30-year yield also slipped 1 basis point to 1.140 percent and the yield on the short-term 2-year lost 2 basis points to 0.411 percent.
EUR: The German bunds remained flat during European trading session Wednesday ahead of the European Central Bank’s (ECB) monetary policy meeting, scheduled to be held on January 23 by 12:45GMT. The German 10-year bond yield, which moves inversely to its price, hovered around -0.remained flat at 0.261 percent and the yield on short-term 2-year too remained steady at -0.587 percent.
AUS: The Australian bonds jumped during Asian session Wednesday as investors crowded towards safe-haven assets following the outbreak of deadly Wuhan coronavirus in China that claimed the lives of few, affecting more than 200 people ahead of the Lunar New Year holiday, with millions of tourists expected to visit the country. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped nearly 4-1/2 basis points to 1.117 percent, the yield on the long-term 30-year bond plunged 5 basis points to 1.729 percent and the yield on short-term 2-year lost nearly 3-1/2 basis points to trade at 0.727 percent.
