Posted at 10 January 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index rebounded from a near 3-month low after China stated that the three days of talks in Beijing had established a platform to resolve the differences between both the economies, however, no clarity was given on key issues. The greenback against a basket of currencies trades 0.1 percent up at 95.23, having touched a low of 95.03 earlier, its lowest since Oct. 16. FxWirePro's Hourly Dollar Strength Index stood at -123.81 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro declined from a near 3-month peak, as the German industry called on the European Union to adopt a tougher policy towards China and urged companies to reduce their dependence on the Chinese market. The European currency traded 0.1 percent down at 1.1528, having touched a high of 1.1569 earlier, its highest since Oct. 17. FxWirePro's Hourly Euro Strength Index stood at 58.66 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1599 (October 11 High), a break above targets 1.1621 (October 16 High). On the downside, support is seen at 1.1505 (October 2 Low), a break below could drag it till 1.1463 (October 4 Low).
USD/JPY: The dollar plunged to a 6-day low, weighed down by mixed signals from U.S.-China trade talks, growing expectations that the Federal Reserve will pause its rate tightening cycle this year and an impasse between U.S. President Donald Trump and Democrats on funding for a border wall. The major was trading 0.05 percent down at 108.11, having hit a low of 107.77 earlier, its lowest since Jan. 4. FxWirePro's Hourly Yen Strength Index stood at -69.34 (Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, and speeches from Fed officials. 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 eased from an over 1-week peak touched in the previous session after British Prime Minister Theresa May lost two Brexit-related votes in two days, triggering worries of a general election. The major traded 0.3 percent down at 1.2755, having hit a high of 1.2803 on Wednesday; it’s highest since December 31. FxWirePro's Hourly Sterling Strength Index stood at -22.24 (Neutral) 1000 GMT. Immediate resistance is located at 1.2815 (December 31 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2706 (January 8 Low), a break below targets 1.2680 (December 31 Low). Against the euro, the pound was trading 0.1 percent down at 90.37 pence, having hit a low of 90.53 earlier, it’s lowest since January 3.
USD/CHF: The Swiss franc retreated from a 3-1/2 month peak as the greenback surged on news that U.S.-China trade talks ended without any clarity. The major trades 0.2 percent up at 0.9760, having touched a low of 0.9716 earlier; it’s lowest since September 27. FxWirePro's Hourly Swiss Franc Strength Index stood at -43.86 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9819 (September 28 High) and any break above will take the pair to next level till 0.9856 (October 1 High). The near-term support is around 0.9695 (September 12 Low), and any close below that level will drag it till 0.9623 (September 26 Low).
Equities Recap
European shares slumped, as optimism over U.S.-China trade talks faded, while sterling eased on the rising possibility of UK general election.
The pan-European STOXX 600 index plunged 0.3 percent at 346.68 points, while the FTSEurofirst 300 index eased 0.2 percent to 1,365.15 points.
Britain's FTSE 100 trades 0.1 percent down at 6,898.80 points, while mid-cap FTSE 250 declined 0.05 to 18,409.59 points.
Germany's DAX fell 0.3 percent at 10,860.71 points; France's CAC 40 trades 0.6 percent lower at 4,783.78 points.
Commodities Recap
Crude oil prices declined after rising to a 1-month peak in the previous session, amid a lack of clear resolution to U.S.-China trade talks and rising fuel stocks in the United States. International benchmark Brent crude was trading 0.1 percent down at $61.19 per barrel by 1037 GMT, having hit a high of $61.66 on Wednesday, its highest since December 14. U.S. West Texas Intermediate was trading 0.1 percent lower at $52.10 a barrel, after rising as high as $52.56 on Wednesday, its highest since the December 14.
Gold prices eased as the greenback rebounded from recent lows following news that U.S.-China trade talks ended without any clarity on when, or whether, a deal might be secured. Spot gold was 0.1 percent down at $1,292.23 per ounce by 1045 GMT, having touched a high of $1,298.42 on Friday, its highest level since June 15. U.S. gold futures gained 0.4 percent to $1,297.20 per ounce.
Treasuries Recap
The U.S. Treasuries climbed during late afternoon session ahead of the country’s weekly initial jobless claims, scheduled to be released today by 13:30GMT, besides, FOMC member Barkin and Chair Jerome Powell’s speech, due for later in the day. The yield on the benchmark 10-year Treasuries plunged nearly 3 basis points to 2.701 percent, the super-long 30-year bond yields edged 1-1/2 basis points lower to 3.008 percent and the yield on the short-term 2-year slumped nearly 2-1/2 basis points to 2.541 percent.
The United Kingdom’s gilts remained narrowly mixed during late afternoon session ahead of the country’s November manufacturing production and trade balance data, both scheduled to be released on January 11 by 09:30GMT respectively. The yield on the benchmark 10-year gilts, slipped 1 basis point to 1.251 percent, the super-long 30-year bond yields rose 1 basis point to 1.791 percent and the yield on the short-term 2-year surged 1-1/2 basis points higher at 0.762 percent.
The German bunds gained during European session amid a muted trading session that lacked data of major economic significance ahead of the European Central Bank (ECB) member Mersch’s speech, scheduled to be held on January 11 by 08:20GMT. The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to 0.205 percent, the yield on the 30-year note fell nearly 1-1/2 basis points to 0.853 percent and the yield on short-term 2-year traded 1 basis point down at -0.587 percent.
The Australian government bonds gained during the Asian session, tracking a similar movement in the U.S. Treasuries on hopes of fewer interest rate hikes by the Federal Reserve. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2-1/2 basis points to 2.305 percent, the yield on the long-term 30-year bond fell 1-1/2 basis points to 2.825 percent and the yield on short-term 2-year traded nearly 1 basis point lower at 1.895 percent.