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Europe Roundup: Sterling steadies as investors await Brexit vote, euro eases as EZ industrial output declines, European shares plunge - Monday, January 14th, 2019

Market Roundup

  • Eurozone Nov 2018 industrial production mm decrease to -1.7 % (forecast -1.5 %) vs previous 0.1 % (revised from 0.2 %)
     
  • Eurozone Nov 2018 industrial production yy decrease to -3.3 % (forecast -2.3 %) vs previous 1.2 %

Economic Data Ahead

  • No major economic data releases

Key Events Ahead

  • No significant events scheduled

FX Beat

DXY: The dollar edged lower, as investors expect the Fed to halt its monetary tightening policy after Chairman Jerome Powell last week reiterated that the central bank has the ability to be patient on monetary policy given that inflation remains stable. The greenback against a basket of currencies trades 0.05 percent down at 95.64, having touched a low of 95.03 on Thursday, its lowest since Oct. 16. FxWirePro's Hourly Dollar Strength Index stood at -18.92 (Neutral) by 1000 GMT.

EUR/USD: The euro slumped after data showed Eurozone industrial output declined in November by more than expected, raising concerns about the bloc's growth in the final quarter of the year and slashing expectations for an ECB interest rate hike. The European currency traded 0.1 percent down at 1.1453, having touched a high of 1.1569 on Thursday, its highest since Oct. 17. FxWirePro's Hourly Euro Strength Index stood at -171.89 (Highly Bearish) by 1000 GMT. Immediate resistance is located at 1.1500 (November 7 High), a break above targets 1.1599 (October 11 High). On the downside, support is seen at 1.1422 (Jan. 8 Low), a break below could drag it till 1.1394 (Jan. 7 Low).

USD/JPY: The dollar declined, halting a 2-day rally, as investors risk sentiment weakened after disappointing Chinese trade data triggered fresh fears of a sharper slowdown in global growth. The major was trading 0.4 percent down at 108.11, having hit a low of 107.77 earlier in the month, its lowest since Jan 4. FxWirePro's Hourly Yen Strength Index stood at 100.87 (Highly Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 109.08 (January 8 High), a break above targets 109.46 (April 26 High). On the downside, support is seen at 107.65 (April 23 Low), a break below could take it lower 107.35 (April 20 Low).

GBP/USD: Sterling consolidated near a 1-1/2 month peak as investors prepared for a vote on British Prime Minister Theresa May's Brexit deal on Tuesday, where she must win a vote in parliament to get her Brexit plan approved or risk a chaotic exit for Britain from the European Union. The major traded 0.1 percent up at 1.2844, having hit a high of 1.2865 on Friday; it’s highest since November 23. FxWirePro's Hourly Sterling Strength Index stood at 160.25 (Highly Bullish) 1000 GMT. Immediate resistance is located at 1.2884 (November 19 High), a break above could take it near 1.2946 (November 12 High). On the downside, support is seen at 1.2776 (November 20 Low), a break below targets 1.2706 (January 8 Low). Against the euro, the pound was trading 0.1 percent up at 89.23 pence, having hit a high of 89.09, it’s highest since December 7.

USD/CHF: The Swiss franc rose, extending previous session gains, as fears of a slowdown in China’s economy sent investors seeking safety in safe-haven assets. The major trades 0.1 percent down at 0.9826, having touched a low of 0.9716 on Thursday; it’s lowest since September 27. FxWirePro's Hourly Swiss Franc Strength Index stood at -91.10 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9856 (October 1 High) and any break above will take the pair to next level till 0.9906 (January 3 High). The near-term support is around 0.9787 (January 7 Low), and any close below that level will drag it till 0.9732 (January 9 Low).

Equities Recap

European shares declined, halting a 4-day rally, weighed down by luxury goods and technology stocks, while sterling steadied as investors prepare for Brexit vote.

The pan-European STOXX 600 index slumped 0.8 percent at 346.34 points, while the FTSEurofirst 300 index plunged 0.8 percent to 1,363.32 points.

Britain's FTSE 100 trades 0.9 percent down at 6,850.59 points, while mid-cap FTSE 250 fell 1.02 to 18,351.05 points.

Germany's DAX eased 0.9 percent at 10,793.33 points; France's CAC 40 trades 0.9 percent lower at 4,736.14 points.

Commodities Recap

Crude oil prices declined over 1 percent as weakening imports and exports in China raised the prospect of a slowdown in fuel demand. International benchmark Brent crude was trading 1.5 percent down at $59.57 per barrel by 1000 GMT, having hit a high of $62.46 on Friday, its highest since December 7. U.S. West Texas Intermediate was trading 1.7 percent lower at $50.74 a barrel, after rising as high as $53.29 on Friday, its highest since the December 7.

Gold prices surged as the dollar slumped on expectations that the U.S. Federal Reserve will not raise rates this year. Spot gold was up 0.5 percent at $1,294.06 per ounce at 1006 GMT, having touched a high of $1,298.42 earlier in the month, its highest level since June 15. U.S. gold futures were up 0.2 percent at $1,292 per ounce.

Treasuries Recap

The U.S. Treasuries rallied during the late afternoon session, tracking cues from the ongoing government shutdown, besides, a handful of economic data, starting on Tuesday with the Empire Manufacturing survey for January and December PPI figures. The yield on the benchmark 10-year Treasuries slumped 3-1/2 basis points to 2.665 percent, the super-long 30-year bond yields fell 2-1/2 basis points lower to 3.012 percent and the yield on the short-term 2-year suffered nearly 3-1/2 basis points lower to 2.512 percent.

The United Kingdom’s gilts jumped during the afternoon session, ahead of the country’s Parliament vote on the Brexit deal, scheduled on January 15 and Bank of England (BoE) Governor Mark Carney’s speech, due on the following day by 09:15GMT. The yield on the benchmark 10-year gilts, plunged 3-1/2 basis points to 1.256 percent, the super-long 30-year bond yields slumped nearly 3 basis points to 1.806 percent and the yield on the short-term 2-year traded 2 basis points lower at 0.785 percent.

The German bunds gained during European session after the Eurozone’s industrial production for the month of November disappointed market sentiments. Investors will now be eyeing the European Central Bank (ECB) President Mario Draghi’s speech, scheduled to be held on January 15 by 15:00GMT. The German 10-year bond yields, which move inversely to its price, plunged 3 basis points to 0.208 percent, the yield on 30-year note slumped nearly 2-1/2 basis points to 0.815 percent and the yield on short-term 2-year traded 1 basis point down at -0.598 percent

The Australian government bond yields continued to track fall in the United States counterpart after Federal Reserve Chair Jerome Powell released a series of dovish comments during last week, pointing towards a slower rate of policy tightening this year. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 3-1/2 basis points to  2.274 percent, the yield on the long-term 30-year bond slumped nearly 3 basis points to 2.812 percent and the yield on short-term 2-year traded 3 basis points lower at 1.867 percent

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July 2 15:00 UTC Released

DKCurrency Reserves

Actual

449.6 Stale

Forecast

Previous

451.7 Stale

July 2 13:45 UTC Released

USISM NY Biz Conditions

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50 %

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48.6 %

January 31 00:00 UTC 821021821021m

ARAnnual Primary Balance*

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2016 bln ARS

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2016 bln ARS

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January 22 19:00 UTC 832841832841m

ARTrade Balance

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-1541 %

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2016 bln ARS

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January 22 19:00 UTC 832841832841m

ARTrade Balance

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-1541 %

January 31 00:00 UTC 821021821021m

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2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 821021821021m

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2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 821021821021m

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2016 bln ARS

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Bln AR bln ARS

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