Market Roundup
- Malaysia's December CPI +2.7 Pct on yr meets Reuters Poll Forecast 2.7 pct
- China says Dec Non-Financial Outbound Direct Investment +6.1 Pct Y/Y to $13.89 Bln
- China says Dec FDI -5.8 Pct Y/Y to $12.23 Bln
- Australia Jan Westpac/MI consumer confidence -3.5% m/m to 97.3, +4.3% y/y.
- New Zealand Q4 CPI -0.5% q/q, +0.1% y/y, -0.2% and +0.4% forecast, petrol prices impact.
- New Zealand Dec REINZ median house price index +1.6% m/m, +3.4% y/y.
- New Zealand Fonterra GDT price index -1.4% at latest auction, volumes down too.
- Japan Jan Reuters Tankan mfg index +6, non-mfg +27, Dec +9 and +18, April mfg index forecast at +6, non-mfg +23, mood down amidst China concerns.
- Japan finances: Y5.8 trln primary deficit projected in FY '20, deficits to continue despite rosy 3% annual growth assumptions - Nikkei.
- Japan tax income to hit record high in FY '17, budget-balancing goal elusive - Reuters.
- US Nov net capital outflow $3.2 bln, Oct rev $61.0 bln inflow ($68.9 bln), long-term flows +$18.2 bln, ex-swaps +$31.4 bln, foreign holdings of US Treasuries +$38.4 bln, China holdings $1.265 trln, Japan $1.145 trln.
- IEA warns oil market could drown in oversupply - Financial Times.
- (0200 ET/0700 GMT) Germany Dec producer prices, -0.4% m/m, -2.2% y/y forecast; last -0.2%, -2.5%.
- (0430 ET/0930 GMT) Great Britain Dec claimant count, 2.5k forecast; last 3.9k.
- (0430 ET/0930 GMT) Great Britain Nov ILO unemployment, 5.2% forecast; last 5.2%.
- (0430 ET/0930 GMT) Great Britain Nov avge earnings, 3-mo avge, +2.1% y/y forecast; last +2.4%.
- (0430 ET/0930 GMT) Great Britain Nov - ex-bonus, +1.8% y/y forecast; last +2.0%.
- (0500 ET/1000 GMT) Switzerland Jan ZEW investor sentiment index; last 16.6.
- (0830 ET/1330 GMT) United States Dec CPI, unch m/m, +0.8% y/y forecast; last unch, +0.5%.
- (0830 ET/1330 GMT) United States US Dec - core, +0.2% m/m, +2.1% y/y forecast; last +0.2%, +2.0%.
- (0830 ET/1330 GMT) United States Dec real weekly earnings; last -0.2% m/m.
- (0830 ET/1330 GMT) United States Dec housing starts, 1.2 mln AR forecast; last 1.17 mln, +10.5% m/m.
- (0830 ET/1330 GMT) United States Dec bldg permits, 1.2 mln AR forecast; last 1.28 mln, +10.4% m/m.
- (1130 ET/1630 GMT) United States Dec Cleveland Fed CPI; last +0.2%.
- N/A Davos World Economic Forum (till January 23).
- N/A Central-Eastern European Forum in Vienna, various speakers (final day).
- N/A Portugal -1.5 bln 6/12-month treasury bill auctions.
- (0530 ET/1030 GMT) United Kingdom DMO GBP4 bln 1.5% 2021 Gilt auction.
- (1000 ET/1500 GMT) BoC policy announcement, MPS, no change in policy, 0.5% o/n rate forecast.
- (1115 ET/1615 GMT) BoC Poloz, Wilkins press conference
USD: The dollar retreated on Wednesday as crude oil prices dropped to near 13-year lows, hitting risk asset markets and putting safe-haven currencies back in favour. Against a basket of currencies, the dollar index was 0.26 percent down trading at 98.81.
EUR/USD: The euro rose 0.48 percent to 1.0959, hovering towards sessions high of 1.0963. The demand for safe- haven such as the Euro strengthened as a renewed bout of risk-version hit the markets on the back of oil sell-off. Better than expected Germany's ZEW surveys and a better CPI print from Euro zone, boosted the pair on Tuesday. Positive U.S. housing, construction and consumer price data due later in the day, could provide potential relief to the greenback. Upbeat print could help to increase the probabilities of the Federal Reserve hiking interest rates again and support the dollar. Immediate resistance is located at 1.0969 (Jan 11 High), while on the downside, support is seen at 1.0904 (Sessions Low).
USD/JPY: The dollar is dragged back to 116.69 yen from a high of 118.11 hit on Tuesday as tumbling oil prices and fears of a China-led global economic slowdown batter risk assets. The pair trades 0.57 percent down at 116.96. The greenback rose as far as 118.11 on Tuesday on a bounce in crude oil prices, however, it gave up those gains after the increase in the commodity prices proved temporary. Amid lack of fundamental triggers, the sentiment on the stocks and the oil price action continue to remain the market drivers. The markets awaits for the U.S CPI report which will be published later in the day. Currently it trades at 116.74, hovering towards sessions low of 116.62. Immediate support is located at 116.50 (Jan 15 Low), while the pair faces resistance at 117.68 (Sessions High).
AUD/USD: The Australian dollar was down 0.59 percent at 0.6867, after oil prices dropped to 12-year lows and shook risk sentiment. The Aussie had risen 0.6 percent on Tuesday as worried Shanghai shares rallied but lost support as Chinese equities buckled again on Wednesday. It trades at 0.6860, having touched a peak of 0.6957 on Tuesday. The pair has made session's high of 0.6924 and low of 0.6849. Immediate support is seen at 0.6838 (Previous Session Low), break below could drag the pair to further losses. While on the upside, resistance is located at 0.6936 (10 - DMA).
NZD/USD: The New Zealand dollar dropped to a 4-month low of 0.6366 on Wednesday after soft domestic inflation data narrowed the odds on further interest rate cuts. The kiwi dropped more than a U.S. cent after New Zealand's consumer price index dropped 0.5 percent in the fourth quarter led by lower food and petrol prices. Declining dairy prices and fresh sell-off in oil and Asian equities puts further downward pressure on the kiwi. The pair currently trades at 0.6380, hovering towards sessions low of 0.6366. The pair finds immediate resistance at 0.6434 (5-DMA), while supports on the downside is located at 0.6332 (Sept 30 Low).
USD/CNY: China's yuan barely moved against the dollar on Wednesday after the central bank set the midpoint rate 6.5578 per dollar prior to market open, 18 pips or 0.03 percent firmer than the previous fix 6.5596, while Beijing took steps to curb speculation on yuan depreciation. The spot market opened at 6.5790 per dollar and was trading at 6.5793, almost unchanged from the previous close. Offshore yuan was trading 0.32 percent weaker than the onshore spot at 6.6001 per dollar. The onshore yuan softened 0.5 percent against the euro to 7.1991. It eased 0.6 percent against the Japanese yen, hovering at 5.6158 to 100 yen.
Equities Recap
Asian share markets retreated on Wednesday as a relentless slide in oil prices soured an attempted rally on Wall Street and dealt a further wary to global investors' appetite for riskier assets.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 2.1 percent to reach depths not seen since late 2011, while Taiwan stocks edged down 2.0 pct at 7,699.12 points.
Australia's S&P/ASX 200 Index dropped 1.33 pct at 4,837.80 points, while Nikkei skidded down 3.71 pct at 16,416.19, with Seoul shares closed down 2.28 pct.
Commodities Recap
Gold edged higher on Wednesday as a further fall in equities and oil burnished bullion's safe-haven draw, although slow physical demand from Asia kept the metal well under this month's peak. Spot gold was up 0.4 percent at $1,091.06 an ounce by 0223 GMT, while U.S. gold for February delivery edged up 0.2 percent at $1,091.10 an ounce. Spot silver was flat at $14.02 an ounce, while palladium dropped 0.3 percent to $490.15.
Crude futures slumped again in early Asian trade on Wednesday, with U.S. oil falling to its lowest since September 2003 below $28 a barrel on worries about global oversupply. U.S. crude futures were trading low 53 cents at $27.93 a barrel at 0336 GMT, after dropping to $27.92 earlier in the session - a new low since September 2003. Brent futures dropped 25 cents to $28.51 a barrel after settling up 21 cents, or 0.7 per cent, in the previous session and was hovering close to a 12-year low.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 2.0016 and was down a massive 24 basis points since the new year began.
Australian government bond futures were quiet, having retreated from recent 2-month peaks. The 3-year bond contract was steady at 98.100, with the 10-year contract climbing 1 tick to 97.3000, while the 20-year contract eased half a tick to 96.7850.
New Zealand government bonds gained on the back of the CPI, sending yields 6 basis points lower at the short end and 5.5 basis points lower at the long end.
Canadian government bond prices were mixed across the maturity curve, with the benchmark 10 -year dropping 19 Canadian cents to yield 1.180 percent, while the 2-year priced up 2.5 Canadian cents to yield 0.293 percent. The Canada-U.S. 2-year bond spread was 3.4 basis points more negative at -57.7 basis points as Canada's 2-year bond outperformed, trading near its widest gap since March 2007.
