Posted at 04 January 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index was largely muted ahead of key Non-farm Payrolls data. DXY was trading at 96.20 at 1100 GMT. Technical bias remains bearish
EUR/USD: The single currency unfazed by sub-forecast EZ inflation data. The preliminary read for the euro-zone Consumer Price Index for December came out at 1.6% YoY in December, down from 1.9% in the final version for November and below 1.8% expected. Core CPI met expectations at 1.0%. EUR/USD was up 0.18% higher at 1.1413, intraday bias neutral. 110-EMA is immediate resistance at 1.1487. 21-EMA is immediate support at 1.1385.
USD/JPY: USD/JPY erases gains as we head into the U.S. session. Focus mainly on the crucial Non-farm Payrolls data. December 2018 ADP employment report saw the best job creation since Feb 2017 and the fourth largest monthly job creation since the 2009 recession. Upbeat ADP data has raised expectations for Techs are largely biased lower. However, momentum indicators are at oversold levels which could see minor bounce at current levels.
GBP/USD: Cable extends gains after UK service PMI beat. key Services PMI surprised to the upside at 51.2 for the month of December, reverting November’s drop to 50.4 and staying well into the expansion territory. GBP to remain under pressure as the UK parliament is set to return to the debate over the Brexit deal agreed by the UK Prime Minister Theresa May with the vote scheduled for the week starting January 14. GBP/USD is trading at 1.2675, up 0.34% at the time of writing.
NZD/USD: NZD/USD has retraced dip below cloud overnight, but the pair is struggling to extend gains today. Upbeat China's Caixin Services PMI for December which printed at 53.9 against 52.9 expected failed to lend support. Break below daily cloud could see weakness till 78.6% Fib at 0.6541. While on the upside, decisive close above 5-DMA could see test of 200-DMA. All eyes now on the crucial U.S.NFP data for further impetus.
Equities Recap
Renewed U.S.-China trade talks boost European shares. At 1040 GMT, the pan-European STOXX 600 index was up 1.25 percent at 338.08 points, while the FTSEurofirst 300 index rose 1.23 percent to 1,328.26 points.
Britain's FTSE 100 trades 1.08 percent up at 6,765.00 points, while mid-cap FTSE 250 up 1.11 percent to 17,632.54 points.
Germany's DAX gained 1.43 percent to 10,565.42 points; France's CAC 40 trades 1.10 percent higher at 4,662.05 points.
Commodities Recap
Oil gains over 1 pct boosted by China-U.S. trade talks and OPEC cuts. Brent crude futures were at $56.60 per barrel at 0741 GMT. WTI crude oil futures were at $47.61 per barrel, up 52 cents, or 1.1 percent.
Gold slip from 6-1/2 month highs amid risk-on after Beijing announced a new round of trade talks with Washington. Spot gold was up 0.1 percent at $1,294.90 per ounce, as of 0758 GMT. U.S. gold futures were up about 0.1 percent at $1,296.50 per ounce.
Among other precious metals, palladium and silver were flat at $1,263.90 and $15.74 per ounce, respectively. Platinum rose about 0.2 percent to $799.74.
Treasuries Recap
U.S.: The U.S. Treasuries plunged during late afternoon session Friday ahead of the country’s ADP non-farm employment change for the month of December and ISM manufacturing PMI for the similar period, both scheduled to be released later today. Also, a host of FOMC members’ speeches, including Bostic, Barkin and Bullard, will lead the way for further direction in the debt market. The yield on the benchmark 10-year Treasuries jumped 5 basis points to 2.604 percent, the super-long 30-year bond yields also surged 3 basis points to 2.929 percent and the yield on the short-term 2-year traded 3-1/2 basis points higher at 2.423 percent.
UK: The UK gilts fell during Friday’s afternoon session after the country’s services PMI for the month of December, released today, beat market expectations, also slightly higher than the previous reading in November. The yield on the benchmark 10-year gilts, jumped 5 basis points to 1.246 percent, the super-long 30-year bond yields climbed nearly 3-1/2 basis points to 1.780 percent and the yield on the short-term 2-year traded 3 basis points higher at 0.736 percent.
EUR: The German bunds suffered during European session Friday after the country’s unemployment change data, for December, remained above market expectations, also higher than the previous reading in November. However, the Eurozone’s consumer price inflation (CPI) data for the similar period, missed consensus estimates, disappointing prior reading as well. The German 10-year bond yields, which moves inversely to its price, jumped 3 basis points to 0.181 percent, the yield on 30-year note climbed nearly 3-1/2 basis points to 0.829 percent and the yield on short-term 2-year nearly 1-1/2 basis points higher at -0.604 percent.
AUS: Australian government bonds slumped across the curve during early Asian session Friday as investors cashed in profits by closing their short positions ahead of the holidays. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4 basis points to 2.224 percent, the yield on the long-term 30-year bond also jumped 4 basis points to 2.733 percent and the yield on short-term 2-year up 2-1/2 basis points to 1.843 percent.