Market Roundup
- USD/JPY -1.06%, GBP/USD +0.7%, EUR/USD +0.35%
- Sterling hits 5-week high at 1.2472
- DXY -0.4%, DAX -0.5%, Brent -1.0%, Gold +0.3%
- German Schaeuble tells Britain to look to Switzerland for Brexit ideas - NZZ on Sunday
- SNB domestic deposits rise to CHF 464.281bln from previous 464.147 w/e Jan 20
- UK banks optimism hits crisis-era low on Brexit uncertainty
- The UK seeks interventionist approach to drive post-Brexit industrial revival
- Japan PM Abe: Wants Trump to recognize Japan firms contribution to US economy
- ChiefCabSec Suga: Will monitor impact of US policies on Japan firms
Economic Data Ahead
- (0830 ET/1330 GMT) Statistics Canada will release its wholesale trade figures for the month of November. The indicator is likely to have increased by 0.5 percent, after unexpectedly rising 1.1 percent in October.
- (0900 ET/1400 GMT) The Conference Board releases China's Leading Economic Index for the month of December. The index stood at 1 percent in the previous 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 -5.1 in the prior month.
Key Events Ahead
- (1800 ET/2300 GMT) European Central Bank (ECB) President Mario Draghi's Speech.
FX Beat
DXY: The dollar slumped versus its major peers as the U.S. President Donald Trump speech signaled protectionism. The greenback against a basket of currencies traded 0.5 percent down at 100.32, having hit a low of 101.21 earlier, its lowest since Dec. 8. FxWirePro's Hourly Dollar Strength Index stood at -99.76 (Bearish) by 1000 GMT.
EUR/USD: The euro rose to a fresh 7-week high above the 1.0750 handle, as the greenback declined following disappointment from the U.S. President Donald Trump's inaugural speech. However, the major failed to extend gains after ECB's Coeure reiterated that it was too early to change the central bank's ultra-loose monetary policy. The European currency traded 0.3 percent higher at 1.0727, after rising as high as 1.0754 earlier, it’s highest since Dec 8. FxWirePro's Hourly Euro Strength Index stood at 59.13 (Bullish) by 0900 GMT. Potential reversal Zone is around 1.07620 and any break above will take the pair till 1.08015. On the lower side, any break below 1.07160 (23.6% retracement of 1.05780 and 1.07548) will drag it down till 1.06500/1.0580.
USD/JPY: The dollar slumped towards the 113.00 handle, as the U.S. President Donald Trump's inaugural speech failed to provide any details of his plans for economic stimulus. Moreover, weakness in the U.S. yields and Trump protectionist message continued to weigh on the major. The pair trades 0.8 percent lower at 113.63, after rising to a high of 115.61 last week, it’s strongest since Jan. 11. FxWirePro's Hourly Yen Strength Index stood at -11.29 (Neutral) by 0900 GMT. The major resistance is around 115.62 (38.2% retracement of 118.61 and 112.57) and any break above will take the pair till 116.30 (61.8% fibo)/117. On the lower side, minor support is around 113.04 (60- day EMA) and any break below targets 1112.59/112.
GBP/USD: Sterling advanced to a five-week high, as weakness in the greenback and speculation that the Supreme Court would rule the British government requires parliamentary approval to trigger formal Brexit procedure strengthened the bid tone around the major. Sterling trades 0.6 percent higher at 1.2452, after rising to a high of 1.2471 earlier, it’s strongest since Dec. 19. FxWirePro's Hourly Sterling Strength Index stood at 46.09 (Neutral) by 0900 GMT. The upside remains capped by 61.8% fibo level and any break above will take the cable till 1.25100 (Dec 16 High)/1.25677. On the lower side, any break below 1.2414 (60- day EMA) will drag it down till 1.23550 (23.6% retracement of 1.1986 and 1.24719)/1.2300. Against the euro, the pound trades 0.3 percent up at 86.17 pence, having hit an early high of 86.11, it’s strongest since Jan. 9.
USD/CHF: The Swiss franc rose, extending gains for a third consecutive session, as the U.S. President Donald Trump offered no detail on his plans to stimulate economic growth. The major trades 0.1 percent lower at 0.9995, having hit a low of 0.9973 earlier in the day, it’s lowest since Nov. 15. FxWirePro's Hourly Swiss Franc Strength Index stood at 34.68 (Neutral) by 0900 GMT. Any violation above 1.0150 will take the pair to next level till 1.0200/1.02480, while the minor resistance is around 1.0020/1.0080. On the lower side, any close below 1 confirms that jump from 0.9549 till 1.03435 got over and a decline till 0.9950/0.9820 is possible.
AUD/USD: The Australian dollar gained, as the greenback eased across the board on the back of the U.S. President Donald Trump's protectionist remarks. The major initially rose to an intra-day high of 0.7578, however, it trimmed gains as weak sentiment around the commodity and equity markets softened market sentiments. The Aussie trades 0.07 percent higher at 0.7556, having hit a high of 0.7588 on Friday, it’s strongest since Nov. 11. FxWirePro's Hourly Aussie Strength Index stood at -28.71 (Neutral) by 1000 GMT. On the higher side, the pair should close above 0.7600 for further bullishness. Any break above will take it till 0.7645/0.7700. The minor support is around 0.7485 (23.6% retracement of 0.7155 and 0.75885) and a break below will drag it till 0.7420(60- day EMA)/0.7393 (30- day EMA).
NZD/USD: The New Zealand dollar rose, reversing most of its previous session losses, as the U.S. President Donald Trump's speech failed to provide details of his promised fiscal stimulus measures. The Kiwi trades 0.3 percent up at 0.7188, having hit a high of 0.7225 on Friday; it’s strongest since Dec. 14. FxWirePro's Hourly Kiwi Strength Index was at -51.39 (Bearish) by 1000 GMT. Immediate resistance is located at 0.7238 (Dec 14 High), a break above could take it near 0.7300. On the downside, support is seen at 0.7150, a break below could drag it till 0.7125 (10-DMA).
Equities Recap
European shares declined, dragged down by banks stocks, while the dollar eased across the board on President Donald Trump's protectionist speech.
The pan-European STOXX 600 index decreased 0.32 percent to 361.43 points, while the FTSEurofirst 300 index rose 0.36 percent to 1,427.19 points.
Britain's FTSE 100 trades 0.53 percent down at 7,159.88 points, while mid-cap FTSE 250 slumped 0.16 percent to 18,122.70 points.
Germany's DAX edged down 0.51 percent at 11,571.46 points; France's CAC 40 trades 0.2 percent lower at 4,829.75 points.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei declined 1.3 percent to 18,891.03 points, Australia's S&P/ASX 200 index fell 0.82 percent to 5,608.40 points and South Korea's KOSPI added 0.02 percent to 2,065.99 points.
Shanghai composite index gained 0.44 percent to 3,136.78 points, while CSI300 index climbed 0.27 percent to 3,364.08 points. Hong Kong’s Hang Seng rose 0.06 percent at 22,898.52 points.
Commodities Recap
Crude oil prices declined, reversing some of its previous session losses, as prospects of increasing U.S. production weighed on the market sentiment. International benchmark Brent crude was trading 0.4 percent lower at $55.22 per barrel by 0908 GMT, having hit a high of $56.92 on last week, its strongest since Jan. 9. U.S. West Texas Intermediate crude shed 0.7 percent at $52.81 a barrel, after falling as low as $50.89 on Wednesday.
Gold prices rose, having touched their highest in two months as investors sought safer assets amid uncertainty around the U.S. President Donald Trump's economic policies. Spot gold was up 0.2 percent at $1,210.70 per ounce by 0912 GMT, having hit a high of $1,219.34 earlier, the highest since Nov. 22. U.S. gold futures climbed as much as 1 percent to $1,217 per ounce.
Treasuries Recap
The U.S. Treasuries were pushed higher along the curve after President Donald Trump was sworn in as the 45th U.S. President later Friday, where he maintained protectionist stance. The yield on the benchmark 10-year Treasury plunged 2 basis points to 2.44 percent, the super-long 30-year bond yield also slumped nearly 2 basis points to 3.02 percent and the yield on short-term 2-year note moved lower by nearly 1-1/2 basis points to 1.18 percent.
The UK gilts rebounded as investors covered previous short positions post the inauguration speech by the United States President Donald Trump at the 45th U.S. Presidential Inauguration ceremony on January 20. The yield on the benchmark 10-year gilts, fell nearly 2 basis points to 1.41 percent, the super-long 30-year bond yields also moved higher by 1 basis point to 2.05 percent and the yield on short-term 3-year remained fell 1/2 basis point to 0.28 percent.
The 10-year German government bund yields posted decline after the United States President Donald Trump maintained a populist tone during his speech at the country’s 45th Presidential Inaugural ceremony held on Friday. The yield on the benchmark 10-year bond, dived 3 basis points to 0.39 percent, the long-term 30-year bond yields also plunged 3-1/2 basis points to 1.65 percent and the yield on short-term 2-year bond also traded 1/2 basis point lower at -0.67 percent.
The Japanese government bonds gained as the country’s benchmark stock indices remained lower, following the United States President Donald Trump’s protectionist speech in the 45th Presidential Inaugural ceremony held on Friday. The benchmark 10-year bond yield, edged down 1 basis point to 0.05 percent, while the long-term 30-year bond yields fell 1-1/2 basis points to 0.78 percent and the yield on the short-term 2-year note remained nearly flat at -0.24 percent.
The New Zealand government bonds started the week on a stronger note, following firmness in U.S. Treasuries. Also, investors sought refuge in safe-haven assets, after the United States President Donald Trump mentioned of how protectionist policies can bring growth and prosperity to the economy in the 45th Presidential Inaugural ceremony held on Friday. In intraday trading, the yield on the benchmark 10-year bond, plunged 2-1/2 basis points to 3.25 percent, the yield on 7-year note ended nearly 3-basis points lower at 2.92 percent and the yield on short-term 2-year note also slipped 2-1/2 basis points to 2.30 percent.
The Australian government bonds rebounded, post the protectionist speech delivered by the United States President Donald Trump on Friday in his Inaugural ceremony. However, market expectations of a higher consumer price inflation data, scheduled to be released on January 25 limited the fall in bond yields. The yield on the benchmark 10-year Treasury note slumped 2 basis points to 2.76 percent, the yield on 15-year note also plunged 2 basis points to 3.21 percent and the yield on short-term 2-year slid 1-1/2 basis points to 1.88 percent.
