Posted at 18 January 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index consolidated near a 2-week peak, as the yield on the benchmark 10-year Treasuries jumped nearly 2 basis points to 2.764 percent. The greenback against a basket of currencies trades flat at 96.03, having touched a high of 96.26 on Tuesday, its highest since Jan. 4. FxWirePro's Hourly Dollar Strength Index stood at 32.66 (Neutral) by 1000 GMT.
EUR/USD: The euro rebounded from a 2-week low touched in the previous session after Reuters poll showed the European Central Bank is likely to wait until the fourth quarter to hike its interest rate. The European currency traded 0.1 percent up at 1.1404, having touched a low of 1.1370 on Thursday, its lowest since Jan. 4. FxWirePro's Hourly Euro Strength Index stood at 3.87 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1442 (December 10 High), a break above targets 1.1500 (November 7 High). On the downside, support is seen at 1.1356 (December 21 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar surged to an over 2-week peak, as investor sentiment was slightly boosted on signs of growing optimism in trade talks between China and the United States. The major was trading 0.2 percent up at 109.39, having hit a high of 109.59, its highest since Jan 2. FxWirePro's Hourly Yen Strength Index stood at -156.15 (Highly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. industrial production, capacity utilization and FOMC Member William's speech. Immediate resistance is located at 109.68 (Jan. 2 High), a break above targets 110.47 (Dec. 31 High). On the downside, support is seen at 108.44 (Jan. 8 Low), a break below could take it lower at 108.02 (Jan. 7 Low).
GBP/USD: Sterling retreated from a 2-month peak as British retail sales declined for the first time since March during the three months to December, confirming a slowdown in consumer spending as Brexit deadline looms. The major traded 0.3 percent down at 1.2944, having hit a high of 1.3001 on Thursday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 81.37 (Slightly Bullish) 1000 GMT. Immediate resistance is located at 1.3030 (November 15 High), a break above could take it near 1.3107 (November 6 High). On the downside, support is seen at 1.2921 (October 4 Low), a break below targets 1.2879 (November 14 Low). Against the euro, the pound was trading 0.5 percent down at 88.10 pence, having hit a high of 87.63 on Thursday, it’s highest since November 15.
USD/CHF: The Swiss franc steadied near a 3-week low, as a report suggested progress towards resolving the trade dispute between the United States and China. The major trades flat at 0.9940, having touched a high of 0.9954 on Thursday; it’s highest since December 27. FxWirePro's Hourly Swiss Franc Strength Index stood at -99.77 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9963 (December 26 High) and any break above will take the pair to next level till 0.9996 (December 3 High). The near-term support is around 0.9889 (December 7 Low), and any close below that level will drag it till 0.9846 (January 3 Low).
Equities Recap
European shares rallied as renewed hope about the U.S.-China trade negotiations boosted investor risk sentiment.
The pan-European STOXX 600 index climbed 0.9 percent at 354.01 points, while the FTSEurofirst 300 index advanced 0.9 percent to 1,392.32 points.
Britain's FTSE 100 trades 0.2 percent up at 6,901.06 points, while mid-cap FTSE 250 rallied 0.5 to 18,635.75 points.
Germany's DAX rose 1.1 percent at 11,035.18 points; France's CAC 40 trades 1.2 percent higher at 4,850.56 points.
Commodities Recap
Crude oil prices rose by more than 1 percent after a report from the Organization of the Petroleum Exporting Countries showed its production declined sharply in December, easing fears about prolonged oversupply. International benchmark Brent crude was trading 1.1 percent up at $61.84 per barrel by 1024 GMT, having hit a high of $61.96, its highest since January 11. U.S. West Texas Intermediate was trading 0.9 percent higher at $52.65 a barrel, after rising as high as $52.84, its highest since the January 11.
Gold prices slumped to an over 1-week low as risk sentiment got a boost from hopes of progress in U.S.-China trade talks. Spot gold was down 0.5 percent at $1,285.65 per ounce, having touched a low of $1,283.55 earlier, its lowest level since Jan. 9. U.S. gold futures were down 0.2 percent at $1,290 per ounce.
Treasuries Recap
The U.S. Treasuries suffered on the last trading day of the week, ahead of the country’s industrial production data for the month of December and FOMC members Williams and Harker’s speech, both scheduled for later today. The yield on the benchmark 10-year Treasuries jumped nearly 2 basis points to 2.764 percent, the super-long 30-year bond yields rose 1 basis point to 3.087 percent and the yield on the short-term 2-year traded 2 basis points higher at 2.583 percent.
The United Kingdom’s gilts slumped during the afternoon session despite a worse-than-expected retail sales data for the month of December, released today amid the ongoing Brexit chaos, followed by PM May’s survival of the no-confidence vote on Wednesday. The yield on the benchmark 10-year gilts, jumped 2 basis points to 1.356 percent, the super-long 30-year bond yields also surged 2 basis points to 1.872 percent and the yield on the short-term 2-year traded tad higher at 0.824 percent.
The Japanese government bonds remained narrowly mixed after the country’s national consumer price inflation (CPI) data for the month of December disappointed market sentiments and industrial production for November improved from that in the previous month. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1 basis point to 0.010 percent, the yield on the long-term 30-year note hovered around 0.700 percent while the yield on short-term 2-year slumped 17 basis points to -0.169 percent.
The Australian government bonds slumped across the curve during Asian trading session as better-than-expected U.S. economic data and progress in U.S.-China trade talks helped investors to move from safe-haven buying. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 3 basis points to 2.315 percent, the yield on the long-term 30-year bond climbed 2 basis points to 2.849 percent and the yield on short-term 2-year up 2-1/2 basis points to 1.891 percent.