Market Roundup
- Fed's Lockhart: Econ strong enough to justify more hikes, global risks are chief concern for US economy, if China turmoil & other volatility last too long may force Fed to revise views on direction of US economy.
- Bank of Canada Q4 survey finds deteriorating business sentiment.
- Brazil's economy to shrink 3 percent this year, recover feebly.
- China's yuan spikes higher, but stocks tumble; Traders report aggressive offshore intervention by PBOC.
- 'Ridiculous' to expect much more yuan depreciation -China official.
- ZAR falls as investors fret over econ, politics; pressure on central bank to raise rates; Finance Minister's removal still casts shadow.
- Oil prices fall to new 12-year lows as traders fear slowing demand, glut.
- Copper sinks to lowest since 2009, losses reflect China gloom; Chinese Lunar New Year holiday to subdue activity.
Looking Ahead - Economic Data (GMT)
- 23:50 Japan Bank Lending YY* Dec 2.30%-previous
- 23:50 Japan Current Account NSA JPY*Nov forecast 858.5b, 1458.4b-previous
- 05:00 Japan Consumer Conf. Index* Dec 42.6-previous
- 05:00 Japan Economy Watchers Poll* Dec 46.1-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0840 levels and currently trading at 1.0856 levels. The pair has made session high at 1.0898 and hit lows at 1.0850 level. Euro declined against the dollar on Monday, as global stocks remained stable for the day as the markets prompted investors to switch urrencies that provide better returns. Europe's common currency has been used in recent carry trades, with investors buying euro cheaply because of their zero interest rates and buying other higher-yielding currencies. Meanwhile, China's yuan jumped on foreign exchange markets on Monday, and was heading for its biggest daily gain in four months against the dollar in offshore trade after reports of another round of aggressive intervention by Beijing. In late trading, the euro fell 0.5 percent to $1.0873, and slid 0.4 percent versus the yen to 127. the other hand, the dollar was also up 0.5 percent versus the Swiss franc at 0.9997 franc.
GBP/USD is supported in the range of 1.4500 and currently trading at 1.4535 levels. It reached session high at 1.4600 and hit low at 1.4530 levels. Sterling slipped lower against the dollar on Monday, as the sellers again stepped in on renewed concerns stemming from a referendum on whether Britain will stay in the European Union or not. Latest data shows, speculators have been adding to unfavorable bets against the pound, which posted its seventh straight week of losses against the euro on Friday. This week's focus shifts to Bank of England monetary policy meeting and minutes. The minutes are expected to repeat December's dovish message, with soft oil prices keeping inflation weak and wage growth rather subdued. Sterling was up 0.4 percent at $1.4570, having fallen to $1.4491 in early Asian trade, a level not seen since June 2010, with the pound losing nearly 5 percent in the last month against the dollar.
AUD/USD is supported around 0.6924 levels and currently trading at 0.6993 levels. It hit session high at 0.7026 and made session lows at 0.6961 levels. The Australian dollar lost ground against US dollar Monday as growing doubts about China's ability to manage markets weighed on the currencies pair. The Australian dollar dived to its lowest level since 2012 against the yen at 80.84, having tumbled 7 percent last week in the largest such loss in five years. It did pare back some losses to last buy 81.67 yen but was still around 9 yen lower since early December. Against its U.S. counterpart, the Aussie stood at $0.6961, not far from a four-month trough of $0.6927 touched earlier in the session. A break under $0.6892 would take it to the weakest level since , Australian job advertisements in newspapers and on the Internet were barely changed in December after four straight months of growth, held back in part by the timing of the Christmas Day holiday. The December jobs report is due on Thursday and analysts are forecasting a drop of around 12,500 as payback. The jobless rate is also seen edging up to 5.9 percent after an unexpected fall to 5.8 percent in November.
USD/CAD is supported at 1.4137 levels and is trading at 1.4221 levels. It has made session high at 1.4245 and lows at 1.4068 levels. The Canadian dollar slipped sharply lower against its U.S. counterpart on Monday as the weakening crude oil prices and a sharp drop in housing start weighted down on the currency pair. The loonie, as Canada's currency is colloquially known, hit a fresh 12-year in afternoon after crude oil prices tumbled again below $31. Canadian housing starts declined more than expected in December from a month earlier as construction of multiple units, typically condominiums, dropped sharply, the national housing agency reported on Monday. The Canadian Mortgage and Housing Corp indicated the seasonally adjusted annualized rate of housing starts dropped to 172,965 units in December from an upwardly revised 212,028 units in November. Forecasters expected 200,000 starts. The currency's strongest level of the session was C$1.4065, while it hit its weakest level since July 2003 at C$1.4240.
Equities Recap
European shares ended a choppy session in negative territory on Monday, with drugmaker Shire falling sharply after announcing it would buy Baxalta and commodity shares tracking oil and metals prices lower.
UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.05 percent, Germany's Dax closed down flat, and France's CAC finished the day down by 0.1 percent.
U.S. stocks extended their recent slide on Monday with declines in biotechs and energy shares, while caution ahead of earnings season also weighed on the market.
Dow Jones closed up 0.31 percent, S&P 500 ended the day up by 0.08 percent, Nasdaq finished the day down by 0.13 percent.
Treasuries Recap
U.S. Treasury yields inched higher on Monday as concerns over global growth eased, leading traders to sell some safe-haven U.S. government debt ahead of a week of heavy government and corporate supply.
Benchmark 10-year notes were last down 10/32 in price on Monday to yield 2.164 percent, up from 2.131 percent on Friday.
The 30-year bond was last down 24/32 in price to yield 2.957 percent, up from 2.921 percent on Friday.
Commodities Recap
Gold retreated on Monday as the dollar rose versus the euro, but the metal held around a nine-week high as pressure on stock markets continued to support investors' flight to safety.
Spot gold was down 0.7 percent at $1,095.76 an ounce at 3:03 p.m. EST (2003 GMT), while U.S. gold futures for February delivery settled down 0.2 percent at $1,096.20.
Oil declined sharply on Monday , with prices plunging 6 percent to new 12-year lows as further ructions in the Chinese stock market threatened to knock crude as low as $20 a barrelBrent crude futures fell $2.00 to settle at $31.55 a barrel, their lowest since April 2004.
Brent has fallen more than 15 percent in six straight days of losses, the worst such slump in a year.
U.S. West Texas Intermediate (WTI) crude futures fell $1.75 to settle at $31.41 a barrel, the lowest since December
