Market Roundup
• ECB's Draghi warns of weaker growth ahead.
• Germany revises 2019 GDP growth forecast to 1.0 pct – Handelsblatt.
• U.S., China 'miles and miles' from trade deal –Ross.
• U.S. Senate plans votes on shutdown, lawmakers pursue temporary solution.
• IMF's Lagarde warns against over-reliance on monetary easing.
• BoE's Carney says cryptocurrencies unlikely to revolutionise financial sector.
• US 19 Jan w/e Initial Jobless Claims, 199k, 220k f'cast, 213k previous, 212k revised.
• US 12 Jan w/e Continued Jobless Claims, 1.713 mln, 1.735 mln forecast, 1.737 mln previous.
• US Jan Markit Comp Flash PMI, 54.5, 54.4 previous.
• US Jan Markit Services PMI Flash, 54.2, 54.1 forecast, 54.4 previous.
• US Jan Markit Manufacturing PMI Flash, 54.9, 53.5 forecast, 53.8 previous.
Looking Ahead - Economic Data (GMT)
• 24 Jan 23:30 Japan Jan Core CPI Tokyo Y/Y, 0.4% previous
• 24 Jan 23:30 Japan Jan CPI, Overall Tokyo, 0.3% previous
Looking Ahead - Events, Auctions, Other Releases (GMT)
• No economic events scheduled
Currency Summaries
EUR/USD: The euro slipped lower against the U.S. dollar on Thursday, as stronger dollar and dovish comments by European Central Bank President Mario Draghi weighed on single currency. European Central Bank President Mario Draghi acknowledged on Thursday that economic growth in the euro zone was likely to be weaker than earlier expected due to the fall-out from factors ranging from China's slowdown to Brexit. His comments pushed the single currency 0.45 percent lower against the dollar at $1.1329, after falling as low as $1.1308, its weakest since Dec. 17. Immediate resistance can be seen at 1.1347 (38.2% retracement level), an upside break can trigger rise towards 1.1412 (21 DMA).On the downside, immediate support is seen at 1.13287 (Daily low), a break below could take the pair towards 1.1215 (12th Nov 2018 low).
GBP/USD: Sterling consolidated gains against the dollar on Thursday, after optimism grew that British lawmakers would be able to avoid a no-deal Brexit.While a firmer dollar prompted currency traders to book some profits after a more than 2.3 percent rally in the pound so far this month.The pound traded down 0.07 percent lower against greenback on Thursday after earlier hitting low at 1.3012. It was trading just below a key market level of $1.3071, the 200-day moving average for the pound, a level it hasn't traded above since May 2018. Immediate resistance can be seen at 1.3100 (23.6% retracement level), an upside break can trigger rise towards 1.2759 (Nov 10th High).On the downside, immediate support is seen at 1.2971(5 DMA), a break below could take the pair towards 1.2900 (Psychological level).
USD/CAD: The Canadian dollar weakened against the greenback on Thursday, as hopes faded for a near-term resolution to a trade dispute between the United States and China.Canada exports many commodities, including oil, so its economy could be hurt if the trade dispute drags on. U.S. crude prices were down 0.1 percent at $52.59 a barrel as concern over the global economy reasserted itself, reversing earlier price gains made on the potential for U.S. sanctions on OPEC member Venezuela. At (2030 GMT), the Canadian dollar was trading 0.1 percent lower at 1.3352 to the greenback. The currency touched its weakest since Jan. 7 at 1.3375. Immediate resistance can be seen at 1.3374 (21 DMA), an upside break can trigger rise towards 1.3400 (Psychological level).On the downside, immediate support is seen at 1.3321 (5 DMA), a break below could take the pair towards 1.3284 (Jan 22nd low).
USD/JPY: The U.S. dollar was little changed against the yen on Thursday, as concerns over global growth, the U.S. government shutdown and unresolved U.S.-Sino trade dispute kept investors cautious. Investor worries rose after U.S. Commerce Secretary Wilbur Ross said the world's two biggest economies are "miles and miles" from resolving their trade issues, although there is a fair chance of reaching a deal.The dollar was 0.04 lower versus the Japanese yen at 109.55. The yen touched a six-week low of 114.20 on Monday. Strong resistance can be seen at 110.66 (Higher Bollingerband), an upside break can trigger rise towards 111.36 (50 DMA).On the downside, immediate support is seen at 109.21 (9 DMA), a break below could take the pair towards 108.92 (11 DMA).
Equities Recap
European shares ended off highs on Thursday as a bounce in tech stocks after results from chipmaker STMicro was offset by late slide among banks following downbeat comments from ECB President Mario Draghi over the health of the region's economy.
UK's benchmark FTSE 100 closed down by 0.25 percent, the pan-European FTSEurofirst 300 ended the day up by 0.25 percent, Germany's Dax ended up by 0.47 percent, France’s CAC finished the day up by 0.69 percent.
The S&P 500 edged higher but the Dow closed nominally lower on Thursday as lingering anxieties about slowing global growth and unresolved trade disputes undercut a spate of strong earnings, while chipmakers rallied to give the Nasdaq a solid gain.
Dow Jones closed down by 0.09 percent, S&P 500 ended up by 0.12 percent, Nasdaq finished the day up by 0.65 percent.
Treasuries Recap
Treasury yields fell on Thursday, with the 10-year's yield hitting a one-week low, as anxiety about slowing global growth and trade tensions between China and the United States renewed safe-haven demand for U.S. government debt.
The yield on benchmark 10-year Treasury notes was 4.1 basis points lower at 2.714 percent. It hit a one-week low of 2.708 percent earlier Thursday.
Two-year Treasury yields, which are sensitive to traders' view on Federal Reserve policy, were down 2.5 basis points at 2.566 percent.
Commodities Recap
Gold steadied on Thursday following initial losses, supported by uncertainties surrounding a government shutdown in the United States and its trade relations with China, but gains were capped by a stronger dollar.
Spot gold inched down 0.1 percent to $1,280.43 an ounce at (2055 GMT), after earlier hitting a trough at $1,276.59.U.S. gold futures settled down 0.3 percent to $1,279.80.
U.S. oil prices rose by 1 percent on Thursday, boosted by the U.S. threat of sanctions on Venezuela, but gains were capped by record high gasoline inventories and an unexpected big build in crude stocks in the United States.
U.S. West Texas Intermediate (WTI) crude futures rose 51 cents to settle at $53.13 a barrel, a 0.97 percent gain. Brent crude futures fell 5 cents to settle at $61.09 a barrel.
