Market Roundup
- Eurozone Jan 2019 ZEW survey expectations increase to -20.9 balance vs previous -21 balance
- Germany Jan 2019 ZEW current conditions decrease to 27.6 balance (forecast 43.5 balance) vs previous 45.3 balance
- Germany Jan 2019 ZEW economic sentiment increase to -15 balance (forecast -18.4 balance) vs previous -17.5 balance
- United Kingdom Nov 2018 ILO unemployment rate decrease to 4 % (forecast 4.1 %) vs previous 4.1 %
- United Kingdom Nov 2018 employment change increase to 141 person (forecast 85 person) vs previous 79 person
- United Kingdom Dec 2018 PSNCR, GBP increase to 21.278 GBP vs previous 2.733 GBP (revised from 4.371 GBP)
- United Kingdom Nov 2018 average week earnings 3m yy increase to 3.4 % (forecast 3.3 %) vs previous 3.3 %
- United Kingdom Nov 2018 average earnings (ex-bonus) stays flat at 3.3 % (forecast 3.3 %) vs previous 3.3 %
- United Kingdom Dec 2018 PSNB, GBP decrease to 2.112 GBP (forecast 1.05 GBP) vs previous 6.252 GBP (revised from 6.345 GBP)
- United Kingdom Dec 2018 claimant count unemployment change decrease to 20.8 person (forecast 20 person) vs previous 24.8 person (revised from 21.9 person)
- United Kingdom Dec 2018 PSNB ex banks GBP decrease to 2.976 GBP (forecast 1.9 GBP) vs previous 7.116 GBP (revised from 7.209 GBP)
Economic Data Ahead
- (0830 ET/1330 GMT) Statistics Canada releases manufacturing shipments data for the month of November. Manufacturing sales are likely to have decreased 0.6 percent after falling 0.1 percent in October.
- (0830 ET/1330 GMT) Statistics Canada is expected to reports that wholesale trade rose 0.1 percent in November, after 1.0 percent in October.
- (1000 ET/1500 GMT) National Association of Realtors is likely to report that U.S. existing home sales declined 1.2 percent to an annual rate of 525,000 million units in December from 5.32 million units in the previous month.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (0830 ET/1330 GMT) Federal Reserve Bank of Philadelphia issues Non-manufacturing Business Outlook Survey for January in Philadelphia, United States
- NA ECB Vice President Luis de Guindos participates in ECOFIN meeting in Brussels, Belgium.
FX Beat
DXY: The dollar index surged to an over 2-week peak, amid pessimism about global growth after the International Monetary Fund predicted the global economy would grow at 3.5 percent in 2019 and 3.6 percent in 2020, down 0.2 and 0.1 percentage point respectively from last October's projections. The greenback against a basket of currencies trades 0.05 percent up at 96.35, having touched a high of 96.47, its highest since Jan. 4. FxWirePro's Hourly Dollar Strength Index stood at 67.52 (Bullish) by 1000 GMT.
EUR/USD: The euro slumped to a near 3-week low as the International Monetary Fund trimmed its global growth forecasts, reflecting signs of weakness in Europe. The German exports were hurt by new fuel emission standards for cars, while Rome's budget standoff with the European Union put Italy under market pressure. The European currency traded 0.05 percent down at 1.1360, having touched a low of 1.1345, its lowest since Jan. 4. FxWirePro's Hourly Euro Strength Index stood at -23.06 (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 1.1325 (Jan. 2 Low), a break below could drag it till 1.1306 (Jan. 3 Low).
USD/JPY: The dollar eased as investors sought safety in safe-haven assets after the International Monetary Fund cut its forecasts for the world economy in 2019 and 2020. The major was trading 0.2 percent down at 109.42, having hit a high of 109.88 on Friday, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at -15.22 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. existing home sales. 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 the 1.2900 handle after data showed British workers' pay growth hit a new 10-year high and employment grew by much more than expected in the three months to November. However, the upside appears limited as the clock ticked down to March 29, the date set in law for Brexit. The major traded 0.2 percent up at 1.2916, having hit a high of 1.3000 on Thursday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 169.63 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.2946 (November 12 High), a break above could take it near 1.3030 (November 15 High). On the downside, support is seen at 1.2818 (January 14 Low), a break below targets 1.2764 (November 21 Low). Against the euro, the pound was trading 0.2 percent up at 87.95 pence, having hit a high of 87.63 on Thursday, it’s highest since November 15.
USD/CHF: The Swiss franc rebounded from a 1-month low touched in the previous session as growth worries weighed on global markets. The major trades 0.05 percent down at 0.9969, having touched a high of 0.9987; it’s highest since December 17. FxWirePro's Hourly Swiss Franc Strength Index stood at 12.69 (Neutral) 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 declined, as global growth worries and losses in the banking sector dented investor risk sentiment.
The pan-European STOXX 600 index slumped 0.4 percent at 355.99 points, while the FTSEurofirst 300 index plunged 0.3 percent to 1,397.66 points.
Britain's FTSE 100 trades 0.5 percent down at 6,935.93 points, while mid-cap FTSE 250 rose 0.2 to 18,795.50 points.
Germany's DAX declined 0.2 percent at 11,118.84 points; France's CAC 40 trades 0.3 percent lower at 4,853.92 points.
Commodities Recap
Crude oil prices declined by more than 1 percent on signs that an economic slowdown in China was stoking concerns over future of fuel demand. International benchmark Brent crude was trading 1.4 percent down at $61.90 per barrel by 1015 GMT, having hit a high of $63.12 on Monday, its highest since December 7. U.S. West Texas Intermediate was trading 1.1 percent lower at $53.34 a barrel, after rising as high as $54.30 earlier, its highest since the December 7.
Gold prices rebounded from a 3-week low touched in the previous session, as the greenback steadied amid mounting concerns over a global economic slowdown. Spot gold was trading 0.4 percent up at $1,284.39 per ounce by 1018 GMT, having touched a low of $1,276.63 on Monday, its lowest level since Jan. 4. U.S. gold futures fell 0.3 percent to $1,279.40 per ounce.
Treasuries Recap
The U.S. Treasury yields slumped during late European session after returning from a long weekend, following concerns over global economic growth after the International Monetary Fund (IMF) downgraded estimates for global growth. The yield on the benchmark 10-year Treasuries plunged nearly 3 basis points to 2.755 percent, the super-long 30-year bond yields slumped 2-1/2 basis points to 3.070 percent and the yield on the short-term 2-year traded nearly 2 basis points lower at 2.595 percent.
The United Kingdom’s gilts suffered during the afternoon session following a decade-high surge in the country’s wage growth for the month of November, while jobless rate decline unexpectedly, from that in October. The yield on the benchmark 10-year gilts, rose nearly 1-1/2 basis points to 1.337 percent, the super-long 30-year bond yields also surged 1-1/2 basis points to 1.849 percent and the yield on the short-term 2-year jumped 2-1/2 basis points to 0.815 percent.
The Japanese government bonds gained on the second trading day of the week ahead of the country’s trade balance data for the month of December, scheduled to be released today by 23:50GMT and the Bank of Japan’s (BoJ) monetary policy decision, due on January 23 for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad lower at 0.001 percent, the yield on the long-term 30-year note fell 1-1/2 basis points to 0.681 percent and the yield on short-term 2-year plunged 17 basis points to -0.169 percent.
The Australian government bonds jumped across the curve during Asian trading session following a fall in the country’s weekly consumer confidence index as investors wait to watch the employment report for the month of December, scheduled to be released on January 24 by 00:30GMT. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1 basis point to 2.301 percent, the yield on the long-term 30-year bond fell 1-1/2 basis points to 2.823 percent and the yield on short-term 2-year traded tad higher at 1.895 percent.
