Market Roundup
• Fed's Powell pledges patience, sensitivity to risks in markets
• Trump, Democrats hold 'contentious' talks, shutdown goes on
• US Non-Farm Payrolls for Dec, 312k, 177k forecast, 155k previous, 176 revised
• US Private Payrolls for Dec, 301k, 175k forecast, 161k previous, 173 revised
• US Manufacturing Payrolls for Dec, 32k, 20k forecast, 27k previous
• US Unemployment Rate for Dec, 3.9%, 3.7% forecast, 3.7% previous
• US Average Earnings YY for Dec, 3.2%, 3.0% forecast,3.1% previous
• US Average Workweek Hrs for Dec, 34.5, 34.5 forecast, 34.4 previous
• CA Employment Change for Dec, 9.3k, 5.5k forecast, 94.1k previous
• CA Unemployment Rate for Dec, 5.6%, 5.7% forecast, 5.6% previous
• U.S. economic growth likely to slow in 2019 - Fed's Barkin
Looking Ahead - Economic Data (GMT)
• 6 Jan 21:30 Australia Dec AIG Manufacturing Index, 51.3 previous
• 7 Jan 00:30 Japan Dec Services PMI, 52.3 previous
Looking Ahead - Events, Other Releases (GMT)
• 5 Jan 13:00 Fed New York President Williams participates in a session at the American Economic Association annual meeting in Atlanta
• 5 Jan 17:30 Fed San Francisco President Daly participates in a panel before the American Economic Association/Allied Social Science Association annual meeting in Atlanta
• 5 Jan 15:15 Fed Atlanta President Bostic participates in a panel before the American Economic Association/Allied Social Science Association annual meeting in Atlanta
• 7 Jan 17:40 Fed Atlanta President Bostic speaks on the economic outlook and monetary policy before a fireside chat hosted by the Rotary Club of Atlanta in Atlanta
Currency Summaries
EUR/USD: The euro jumped higher against US dollar on Friday, as dollar weakened after dovish comments from Federal Reserve Chairman Jerome Powell. The dollar had gained in the early session, after data showed U.S. employers hired the most workers in 10 months in December while boosting wages. Nonfarm payrolls rose by 312,000 jobs, compared with an expected 177,000.The euro was 0.5 percent higher against the greenback at 1.398. An index that tracks the dollar versus a basket of six major currencies was down 0.11 at 96.17. Immediate resistance can be seen at 1.1421 (Daily High), an upside break can trigger rise towards 1.1475 (100 DMA).On the downside, immediate support is seen at 1.1353 (50% retracement level), a break below could take the pair towards 1.1300 (Lower Bollinger Bands).
GBP/USD: The pound strengthened against greenback on Friday, as a weaker dollar and optimism for a Brexit deal ahead of Brexit vote supported British pound. A parliamentary debate on May's deal with Brussels kicks off next week, with a vote scheduled for the week of Jan. 14. The greenback fell despite U.S. job growth surging and comments from Federal Reserve Chairman Jerome Powell that the central bank will be sensitive to market concern about a U.S. economic slowdown. The pound was last trading up 0.79 percent against the dollar to $1.2732. Immediate resistance can be seen at 1.2741 (61.8% retracement level), an upside break can trigger rise towards 1.2810 (Dec 31st High).On the downside, immediate support is seen at 1.2682 (50% retracement level), a break below could take the pair towards 1.2616 (38.2% retracement level).
USD/CAD: The Canadian dollar strengthened to its highest in nearly three weeks against the greenback on Friday as stocks and oil prices climbed and after domestic data showed further jobs gains, ahead of next week's interest rate decision by the Bank of Canada. At 2122 GMT), the Canadian dollar was trading 0.69 percent higher at 1.3393 to the greenback. For the week, the loonie was up 1.8 percent, its biggest advance since September. Immediate resistance can be seen at 1.3431 (38.2% retracement level), an upside break can trigger rise towards 1.3472 (50% retracement level).On the downside, immediate support is seen at 1.3378( 23.6% retracement level), a break below could take the pair towards 1.3262 (Lower Bollinger Bands).
USD/JPY: The dollar gained against the Japanese yen on Friday, as investors dumped safe haven yen after China announced new measures to support its economy and hopes grew that upcoming U.S.-China trade talks would make some progress. Market sentiment improved when China confirmed that trade talks with the United States would be held in Beijing on Jan. 7-8.The dollar was last trading 0.78 percent higher versus the Japanese yen at 108.48. Strong resistance can be seen at 108.45 (50% retracement level), an upside break can trigger rise towards 109.94 (Oct 3rd high).On the downside, immediate support is seen at 108.00 (Psychological level), a break below could take the pair towards 107.44 (23.6% retracement) .
Equities Recap
European shares posted their biggest daily gain since June 2016 as buoyant U.S. job data and hopes of better Sino/U.S. trade relations boosted shares after a gloomy week during which a rare revenue warning from Apple caused havoc.
The UK's benchmark FTSE 100 closed down by 0.6 percent, FTSEurofirst 300 ended the day up by 2.78 percent, France’s CAC finished the up by 2.6 percent. Germany's Dax closed up by 3.3 percent.
Wall Street rebounded on Friday to close at its highest in two weeks after a strong jobs report and assurances from Federal Reserve Chairman Jerome Powell that the central bank would be patient and flexible in steering the course of interest rates.
Dow Jones closed up by 3.27 percent, S&P 500 ended down 3.43 percent, Nasdaq finished the day up by 4.25 percent.
Treasuries Recap
Treasury yields rose on Friday after the U.S. employment report for December came in more robust than expected, and on the back of U.S. equities, which hit session highs as Federal Reserve Chair Jerome Powell struck a dovish tone in a roundtable interview.
The spread between two- and 10-year yields is the conventional measure of the yield curve, the inversion of which is a strong indicator of recession. Spreads along the curve, like that between two- and five-year yields, however, tend to invert before the two- and 10-year spread.
The benchmark 10-year government yield was last at 2.65 percent, up 10 basis points from Thursday's close.
Commodities Recap
Gold fell on Friday, pulling back from a more than six-month peak hit earlier in the session, as robust U.S. jobs data eased some concerns about an ailing economy, while palladium prices punched through the key $1,300 level for the first time.
Spot gold slipped 0.7 percent to $1,284.74 per ounce as of (2155 GMT), after dropping to $1,276.40.
U.S. gold futures settled down 0.7 percent at $1,285.80 per ounce, having briefly surpassed the psychological $1,300 per ounce level earlier in the session.
Oil rose nearly 2 percent on Friday after proposed trade talks between the United States and China eased some fears about a global economic slowdown, but gains were capped after the United States reported a sharp build in refined product inventories.
Brent crude futures rose $1.11, a 1.98 percent gain, to settle at $57.06 a barrel. U.S. West Texas Intermediate (WTI) crude futures increased 87 cents to settle at $47.96 a barrel, a 1.85 percent gain.
