Market Roundup
- EUR/USD 0.26%, USD/JPY 0.16%, GBP/USD 0.11%, EUR/GBP 0.16%
- DXY -0.23%, DAX 1.35%, FTSE 0.37%, Brent 0.2%, Gold 0.27%
- As dismal data flows, ECB policymakers promise caution
- Euro headed for second weekly loss after ECB's warning
- DE Ifo Business Climate New, 99.1, 100.6 f'cast, 101.0 prev
- DE Ifo Curr Conditions New, 104.3, 104.2 f'cast, 104.7 prev, 104.9 rvsd
- DE Ifo Expectations New, 94.2, 97.0 f'cast, 97.3 prev
- UK Finance Mortgage Apps, 38.779k, 39.403k prev, 39.205k rvsd
- GB CBI Distributive Trades, 0, 2 f'cast, -13 prev
- Queen sends a Brexit message to UK politicians: end your bickering
- U.S. lawmakers search for remedies as government shutdown rolls on
Economic Data Ahead
- (1100 ET/1600 GMT) CA Budget Balance, C$, -1.11 bln prev
- (1100 ET/1600 GMT) CA Budget, Year-to-date, C$, 0.09 bln prev
Key Events Ahead
- (0800 ET/1300 GMT) Sweden Riksbank Deputy Governor Cecilia Skingsley speaks at World Economic Forum, Davos
- (0830 ET/1330 GMT) ECB President Mario Draghi speaks in Frankfurt
- (1030 ET/1530 GMT) Bank of England Governor Mark Carney speaks at the World Economic Forum, Davos
FX Beat
DXY: DXY erases most of previous sessions gains. Trades 0.23% lower on the day at 96.35 at 1140 GMT. Bias neutral. Break below 55-EMA support at 96.29 could see further weakness.
EUR/USD: Euro on track for second weekly loss after dovish ECB. The pair has edged higher from new multi-week lows at 1.1289 and is currently trading at 1.1342. EUR seems unfazed by the results from the German IFO for the current month. Upbeat risk sentiment supporting upside in the major. Near-term support is around 1.12670 and any break below will drag the pair to next level till 1.12180/1.1200. Strong resistance is around 1.1355 and any violation above targets 1.1400/1.14350.Any break above 1.1430 targets 1.1500.
USD/JPY: USD/JPY edges above 21-EMA, better-than-expected Tokyo core CPI data fails to impress JPY bulls. Despite upbeat numbers, the inflation remains well below the BoJ's 2% target and unlikely to move the central bank to scale back the unprecedented stimulus any time soon. Technical studies are neutral to slightly bullish on the intraday charts. Major trend is bearish. Decisive breakout above 21-EMA could see further gains. Scope then for test of 61.8 % Fib at 110.77.
GBP/USD: Sterling's rally finds fresh legs on hopes for May's Brexit deal. Cable hits new 2-month highs at 1.3138 before paring some gains to currently trade at 1.3092. Price has broken above 200-DMA resistance at 1.3070. Decisive close above will see further upside. Next major resistance lies at 110-W EMA at 1.3284. Near-term support is around 1.2860 and any violation below targets 1.2800/1.2760. Major weakness only below 1.2660.
AUD/USD: AUD/USD has edged higher from fresh 3-week lows at 0.7075. Technical studies do not support any concrete evidence of upside. Further, growing prospects of RBA rate cut to keep upside limited. 5-DMA is immediate resistance at 0.7122, while break above 110-EMA negates bearish bias. Major trend is bearish. Downside continuation to see test of 0.7021 (Oct 26 low).
EUR/GBP: EUR/GBP slumps to 1-1/2 year lows as Sterling buoyed on hopes for May's Brexit deal. Bears strongly in control, the pair extends weakness for the 4th straight week. Technical studies are bearish. Scope for test of 38.2% Fib at 0.8398. Brexit news will continue to drive price action around the pair.
Equities Recap
European markets edge higher despite continuing concerns over U.S./ China trade dispute. At 1100 GMT, the pan-European STOXX 600 index was up 0.75 percent at 358.48 points, while the FTSEurofirst 300 index rose 0.94 percent to 1,413.31 points.
Britain's FTSE 100 trades 0.40 percent up at 6,846.42 points, while mid-cap FTSE 250 up 0.25 percent to 18,674.65 points.
Germany's DAX gained 1.43 percent to 11,289.13 points; France's CAC 40 trades 0.99 percent higher at 4,920.12 points.
Commodities Recap
U.S. oil rangebound. Upside supported on concerns that its crude exports could soon be disrupted. Brent crude oil futures were at $61.62 a barrel at 0755 GMT. U.S. West Texas Intermediate (WTI) crude futures were at $53.70 per barrel, up 57 cents, or 1.1 percent.
Gold edges higher as U.S. govt shutdown augments global growth concerns. Spot gold rose 0.3 percent to $1,284.31 per ounce, as of 0726 GMT, while U.S. gold futures climbed 0.3 percent to $1,283.10 per ounce.
Among other metals, palladium was up 0.2 percent at $1,322.13. Silver rose 0.5 percent to $15.38 per ounce, while platinum gained 0.2 percent to $802.50.
Treasuries Recap
EUR: The German bunds remained narrowly mixed during European session Friday after the country’s business sentiment index showed a decline during the month of January and the government slashed its 2019 growth forecast. The German 10-year bond yields, which move inversely to its price, rose nearly 1 percent to 0.185 percent, the yield on 30-year note hovered around 0.776 percent and the yield on short-term 2-year jumped 1-1/2 basis points to -0.578 percent.
JGBs: The Japanese 10-year government bond yield dropped on the last trading day of the week Friday, tracking a similar movement in the United States counterpart, following concerns over global growth amid ongoing political uncertainties in various parts of the world. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained tad lower at -0.001 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.660 percent while the yield on short-term 2-year plunged 17 basis points to -0.169 percent
AUS: Australian government bonds rallied across the curve during Asian trading session Friday as concerns hovered over U.S.-China trade talks. Also, bonds extended gains amid worries on economic growth. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 6 basis points to 2.216 percent, the yield on the long-term 30-year bond slumped 5-1/2 basis points to 2.729 percent and the yield on short-term 2-year also traded nearly 4 basis points lower at 1.826 percent.
