Market Roundup
- DUP privately agree to support PM May's ‘Plan B’ Brexit deal -The Sun.
- Global economy in real danger if U.S.-China trade war escalates – poll.
- Global shipping rates slump in latest sign of economic slowdown.
- Senate seeks solution to open U.S. government, Trump insists on wall.
- 'Get a loan,' U.S. Commerce chief tells unpaid federal workers.
- U.S., China 'miles and miles' from trade deal – Ross.
- Tokyo Jan CPI Ex fresh food YY, 0.9%, 0.9% forecast, 1.1% previous.
- Tokyo Jan CPI, Overall, 0.3% forecast, 0.4% previous.
- U.S.-based emerging market stock funds attract most cash since Jan 2018 – Lipper.
- U.S. muni bond funds post $834.4 mln in inflows – Lipper.
- Foreign CB US debt holdings +5,182 bln to 3,408 tln Jan 23 week.
- Treasuries -$436 mln to $3.027 tln, agencies +$4,192 bln to $312,101 bln.
Economic Data Ahead
- (0400 ET/0900 GMT) Germany Jan IFO Business Climate New, 100.6 forecast, 101.0 previous.
- (0400 ET/0900 GMT) Germany Jan IFO Current Conditions New, 104.2 forecast, 104.7 previous.
- (0400 ET/0900 GMT) Germany Jan IFO Expectations New, 97.0 forecast, 97.3 previous.
Key Events Ahead
- (0300 ET/0800 GMT) Riksbank executive board meeting in Stockholm.
- N/A ECB Executive Board member Benoit Coeure participates in the World Economic Forum in Davos, Switzerland.
- N/A World Economic Forum annual meeting (final day) in Davos, Switzerland.
FX Recap
USD: The dollar index, a gauge of its value versus six major peers, was up a little at 96.52.
EUR/USD: The euro was off a touch at $1.1304, languishing near its mid-December lows, and analysts see more pressure as monetary policy is expected to remain accommodative in the euro area over this year. It made intraday high at $1.1326 and low at $1.1300 mark. A consistent close below $1.1305 will drag the parity down towards key supports around $1.1270, $1.1185 and $1.1080 levels respectively. Alternatively, reversal from key support will drag the parity higher towards key resistances around $1.1390, $1.1472, $1.1550, $1.1620 and $1.1820 marks respectively.
USD/JPY: The safe-haven yen trades almost flat against U.S dollar and currently trading around 109.75 marks. It made intraday high at 109.87 and low at 109.51 levels. A sustained close above 109.76 is required to take the parity higher towards key resistances around 110.48, 111.40, 112.60 and 113.98 marks respectively. Alternatively, a daily close below 109.36 will drag the parity down towards key support around 107.50 and 104.20 marks respectively.
GBP/USD: The Sterling rallied to its early November highs against the dollar on Friday after The Sun reported that Northern Ireland's Democratic Unionist Party has privately decided to offer conditional backing for Prime Minister Theresa May's Brexit deal next week. The sterling has been under pressure over recent weeks on the Brexit uncertainty, a period in which growing pessimism over the global economy pushed investors toward the safe-haven dollar. Pair made intraday high at $1.3138 and low at $1.3056 mark. A sustained close below $1.3062 requires for dragging the parity down towards key support around $1.2857 mark. On the other side, key resistances are seen at $1.3187, $1.3215, $1.3362 and $1.3490 levels respectively.
AUD/USD: The Australian dollar was on the defensive on Friday at the end of a tough week as concerns swirled over Sino-U.S. trade talks and global growth, while investors also pondered the possibility of rate cuts at home. The Aussie dollar was pinned at $0.7086, having been as low as $0.7077 at one stage. It was down 1 percent on the week so far and threatening old support around $0.7020. The pair made intraday high at $0.7113 and low at $0.7075 levels. A consistent close above $0.7140 requires for upside rally.
NZD/USD: The New Zealand dollar was faring better at $0.6768 and actually up 0.2 percent on the week so far. A sustained close below $0.6729 requires for the downside rally. Alternatively, key resistance was seen at $0.6830 mark.
Equities Recap
Tokyo's Nikkei was trading 1.27 pct higher at 20,835.66 points.
Australia’s S&P/ASX 200 was trading 0.78 pct higher at 5,911.40 points.
Shanghai composite index to open up 0.2 pct at 2,596.26 points and China's CSI300 index to open up 0.2 pct at 3,165.18 points.
Taiwanese stock was trading around 0.91 percent higher at 9,966.45 points.
Hong Kong’s Hang seng was trading 1.37 pct higher at 27,495.25 points.
South Korea’s Kospi was trading 1.40 percent higher at 2,174.55 points.
India’s NSE Nifty was trading around 0.72 percent lower at 10,928.58 points while BSE Sensex was trading 0.75 points higher at 36,465.55 points.
Commodities Recap
Oil prices rose by more than one percent on Friday as turmoil in Venezuela triggered concerns that its oil exports could soon be disrupted. Washington on Thursday signalled it could impose sanctions on Venezuela's crude exports as Caracas descends further into political and economic turmoil. International Brent crude oil futures were at $61.89 a barrel at 0246 GMT, 80 cents, or 1.3 percent, above their last close. U.S. West Texas Intermediate (WTI) crude futures were at $53.90 per barrel, up 77 cents, or 1.5 percent.
Gold prices held steady on Friday, supported by worries over a slowing global economy and a prolonged U.S. government shutdown, but the safe-haven metal's gains were capped by a strong technical resistance and a firmer U.S. dollar. Spot gold was firm at $1,280.66 per ounce, as of 0059 GMT, while U.S. gold futures were steady at $1,279.90 per ounce.
Treasuries Recap
Government bonds benefited from all the angst over trade and global growth, with the Australian three-year bond future up 4 ticks at 98.300. If it closes at that level, it would be the highest finish since mid-2017. The 10-year contract adds 5 ticks to 97.7800, implying a yield of 2.22 percent.
New Zealand government bonds also rallied, pushing yields down as much as 4 basis points.
