Market Roundup
- Japan PM Abe - Hopes BoJ continues on present course to achieve target -RTRS.
- BoJ Gov Kuroda - Economy improving gradually, price trend too, no plan to change inflation target, won't hesitate to adjust policy but no plan to ease policy now - Reuters.
- EconMin Amari - External factors causing stock volatility, stability again as US market turn up, oil price declines have positives - Reuters.
- MoF flow data week-ended Jan 9 - Japanese buy net Y198.9 bln foreign stocks, Y323.1 bln bonds, Y16.6 bln bills; foreign investors sell net Y746.5 bln Japanese stocks, buy Y218.5 bln JGBs, trln short-term bills.
- Westpac launches Y85 bln 5-yr samurais via Daiwa, Nomura, SMBC Nikko.
- China Dec money supply M2 +13.3% y/y, new yuan loans +14.3% to CNY597.8 bln, +13.5%, +14.8% and CNY700 bln forecast, total social finance trln.
- More than 100 China-listed firms say shareholders won't reduce holdings-RTRS.
- Foreign CB US debt holdings -$34.727 bln to $3.277 trln week-ended Jan 13, Treasuries -$34.521 bln to $2.961 trln, agencies -$136 bln to $268.561 bln.
- NY Fed - Swaps with foreign CBs $118 mln jan 13 week, BoJ $1 mln, ECB rest.
- Lipper - Investors pull $9 bln from stocks funds week-ended January 13.
- Australia Nov owner-occupied housing finance +1.8% m/m, -0.5% forecast, value of investment housing finance +0.7%.
- NZ December food prices index -0.8% m/m, -1.3% y/y.
Economic Data Ahead
- (0245 ET/0745 GMT) France Nov budget balance; last E76.2 bln deficit.
- (0300 ET/0800 GMT) Spain Dec CPI, -0.3% m/m, unch y/y forecast; last +0.4%, -0.3%.
- (0300 ET/0800 GMT) Spain Dec HICP, -0.4% m/m, -0.1% y/y forecast; last +0.2%, -0.1%.
- (0400 ET/0900 GMT) Italy Dec CPI - final, unch m/m, +0.1% y/y forecast; flash unch, +0.1%.
- (0400 ET/0900 GMT) Italy Dec HICP - final, -0.1% m/m, +0.1% y/y forecast; flash -0.1%, +0.1%.
- (0400 ET/0900 GMT) Norway Dec trade balance; last NOK15.4 bln surplus.
- (0430 ET/0930 GMT) Great Britain Nov construction output, +0.5% m/m, unch y/y forecast; last +0.2%, +1.0%.
- (0500 ET/1000 GMT) Eurozone Nov trade balance; last E24.1 bln surplus.
- (0830 ET/1330 GMT) United States Dec retail sales/ex-autos, unch/+0.2% m/m forecast; last +0.2%, +0.4%.
- (0830 ET/1330 GMT) United States Dec PPI, -0.2% m/m, -1.0% y/y forecast; last +0.3%, -1.1%.
- (0830 ET/1330 GMT) United States Dec - ex-food/energy, +0.1% m/m, +0.3% y/y forecast; last +0.3%, +0.5%.
- (0830 ET/1330 GMT) United States Jan NY Fed Empire State manufacturing index, -4.0 forecast; last -4.59.
- (0915 ET/1415 GMT) United States Dec industrial output, -0.2% m/m forecast; last -0.6%.
- (0915 ET/1415 GMT) United States Dec capacity utilization, 76.8% forecast; last 77.0.
- (0955 ET/1455 GMT) United States Jan U.Mich sentiment index - prelim, 93.0 forecast; last 92.6.
- (1000 ET/1500 GMT) United States Nov business inventories, -0.1% m/m forecast; last unch.
Key Events Ahead
- N/A EcoFin meeting in Brussels.
- N/A UK DMO GBP2.5/2.0/1.5 bln 1/3/6-month treasury bill auctions.
- (1300 ET/1800 GMT) Dallas Fed Kaplan speaks at Dallas luncheon.
- (1600 ET/2100 GMT) Canada FinMin Morneau at Calgary townhall meeting.
FX Beat
USD: The dollar edged down in Asian trade on Friday, erasing its early gains as declining crude oil futures and Chinese shares weakened investors' appetite for risk. Against a basket of currencies, the dollar index was down at 98.98.
EUR/USD: The euro trades 0.14 percent high st 1.0878, after having touched sessions high of 1.0889. It lost ground against the greenback, dropping back below 1.0900 from a session high of 1.0943 hit on Thursday. The European Central Bank said it saw possibilities for further cuts in its deposit rate in minutes of its December meeting, yet many ECB policymakers appeared uncertain about the need for further action in the near term. Traders are seen bullish, awaiting for Euro trade data which is scheduled later in the day. Resistance is seen at 1.0898 (30- DMA), while on the downside, support is located at 1.0847 (Jan 11 Low).
USD/JPY: The dollar is seen weak against the yen as it trades low at 117.71 in the early Asian trade. Renewed sell-off seen in the oil prices and Chinese stocks extending losses, lifted the safe-haven appeal of the yen. Yuan's accelerated depreciation had upsetted the markets, but relative stability in this week has calmed fears of a sustained depreciation. The pair trades at 117.74 levels, after going as high as 118.27. Immediate support is located at 117.29 (Previous Day Low), while the it faces resistance at 118.43 (12- DMA).
AUD/USD: The Australian Dollar is trading low at 0.6946, but above a 4-month trough of 0.6910 touched on Thursday. The Aussie is down more than 4 percent this year against its U.S. counterpart on worries that Beijing could be losing its grip on managing the slowdown of its economy. Further, it is weighed down on undermined risk sentiment renewing weakness in Chinese equities. Currently the pair trades at 0.6945, having touched sessions high of 0.7001. Immediate support is located at 0.6926 (Jan 11 Low), while on the upside, resistance is seen at 0.7020 (Jan 12 High).
NZD/USD: The New Zealand dollars was off lows on Friday but lacked upward momentum with investors wary of the economic slowdown and market volatility in China. The kiwi is seen trading low at 0.6439 levels, having touched a three-month trough of 0.6419 on Thursday. It was on track with a 1.3 percent weekly loss, its third consecutive weekly decline. The pair trades at 0.6429, hovering towards 4-month low of 0.6419 touched on Thursday. Immediate support is located at 0.6419 (Previous Day Low) break below could take the pair to 0.6383 (Oct 2 Low). Resistance is seen at 0.6500 (5-DMA).
USD/CNY: Yuan gained in early trade on Friday, as the People's Bank of China set a marginally weaker midpoint of 6.5637 for the yuan on Friday, weaker than the previous fix of 6.5616 but 253 pips stronger than Thursday's closing quote 6.5890. The fix has been broadly steady for more than a week, as the central bank is determined to hold the line against expectations of sustained depreciation. The spot market opened at 6.5920 per dollar and was trading at 6.5869 in early trade, 21 pips firmer than the previous close.
Equities Recap
Asian stocks erased its earlier gains to hit 3-1/2-year lows on Friday as renewed pressure on oil prices and disappointing Chinese data kept investors on edge.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.3 percent to the lowest level since June 2012, while Taiwan stocks edged up 0.3 pct at 7,762.01 points.
Australia's S&P/ASX 200 Index dropped 0.52 pct at 4,883.80 points, Nikkei closed down 0.54 pct at 17,147.11, with Seoul shares skidded 1.05 pct.
Commodities Recap
Gold edged higher on Friday after dropping for the past four out of five sessions and the market was on track for its biggest weekly decline since early November on pressure from a rebound in equities. Spot gold edged up 0.2 percent to $1,079.81 an ounce by 0233 GMT, while U.S. gold futures gained 0.6 percent to $1,079.9. Silver is down about half a percent this week after gaining 1 percent last week, while platinum is down almost 5 percent in its second week of decline.
U.S. crude oil futures dropped in Asian trade on Friday, after posting gains in the previous session, as the prospect of additional Iranian supply looms over the market. West Texas Intermediate was down 48 cents at $30.72 a barrel at 0345 GMT. On Thursday the contract rose 72 cents, or 2.4 percent, to settle at $31.20. Brent crude was down 20 cents at $30.68 a barrel. The global benchmark settled up 72 cents, or 2.4 percent, at $31.03 a barrel on Thursday, after dropping to $29.73, its weakest since February 2004.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 2.0821 percent down by 0.016.
Australian government bond futures bounced from multi-month peaks, with the 3-year bond contract dropped 3 ticks at 98.050. The 10-year contract lost 4 ticks to 97.2850, while the 20-year contract was firm at 96.7900.
New Zealand government bonds were unchanged.
Canadian government bond prices were mixed across the maturity curve, with the benchmark 10-year rising 12 Canadian cents to yield 1.23 percent, while the 2-year price was down 1.5 Canadian cents to yield 0.316 percent. The Canada-U.S. 10-year bond spread was four basis points more negative at -86.3 basis points as Canadian government bonds outperformed for longer-dated maturities.
