Market Roundup
- USD/JPY back above 117 after sliding to 115.97 Wednesday. Plays in between 116.47/117.48 levels.
- Rebound in crude oil and equities help dollar recover.
- EUR/USD up initially to 1.0921 but eases to 1.0885 in Europe.
- GBP/USD consolidates above Wednesday's 1.4125 7 year low. Plays in between 1.4152/1.4202 levels.
- Russian rouble plummets to new lows as pressure builds.
- USD/RUB comes close to new record high 86 before retreating.
- European shares steady after Wednesday slump: Dax +0.6%, CAC +0.7%, FTSE 100 +0.5%.
- UK December RICS housing survey +50 vs previous 49. 50 expected.
- Dijsselbloem -accepts IMF participation in bailout plan.
- Kremlin says rouble is volatile, but "not collapsing".
- Davos - IMF Lagarde - China's structural reform are "massive undertaking".
- Davos - China will honor its commitment on reforms related to SDR entry.
- Davos - IMF Lagarde - China should communicate better with financial markets.
- China's December commercial banks' net forex sales at $89.4 bln.
- Capital outflows from China eased in Q4-FX regulator.
- Unnamed JP Abe aide - JPY has to stop rising, BoJ should act next week.
- Abe aide Shibayama - BoJ ease not on the cards.
Economic Data Ahead
- (0745 ET/1245 GMT) The European Central Bank is likely to stand pat when its policymakers meeton Thursday, even as a market crash, tumbling bank stocks and ebbing inflation set the stage for action later in the year.
- (0800 ET/1300 GMT) Brazil payroll data is expected to show about 1.5 million Brazilians lost their jobs in 2015, in a year when the economy contracted at its steepest pace in 25 years. The economy shed a net 655,000 payroll jobs in December.
- (0830 ET/1330 GMT) The number of Americans filing for jobless benefits likely slipped to 278,000 from 284,000 the prior week, showing little signs of a pick-up in layoffs despite a recent sharp slowdown in economic growth and financial markets turmoil. The continuing claims probably dropped to 2.248M from 2.263M.
- (0830 ET/1330 GMT) The Federal Reserve Bank of Philadelphia releases its manufacturing survey for January, which likely dropped to 5 after falling to 5.9 in December.
- (1000 ET/1500 GMT) The European Commission's Consumer Confidence Index for January is expected to show a drop to 5, the index fell to 5.7 in December.
- (1030 ET/1530 GMT) EIA's Natural Gas Storage change for the week ending Jan 15 is expected to be at -180B.
- (1100 ET/1600 GMT) EIA's Crude Oil Stocks change for the week ending Jan 15 is likely to remain at 3.000M.
Key Events Ahead
- (0830 ET/1330 GMT) The ECB releases its monetary policy statement and the president speaks at press conference.
- (1045 ET/1545 GMT) FedTrade Operation 15-year Fannie Mae / Freddie Mac (max $525 mn).
FX Recap
USD: The dollar index was down about 0.1 percent at 99.025. The greenback shed about 0.1 percent to 116.75 yen after falling to 115.97 on Wednesday, undermined by U.S. data.
EUR/USD: Ahead of the ECB meeting, the euro was up 0.1 percent at $1.0905 in early European trade, down from an overnight high of $1.0976 and virtually unchanged from levels seen immediately after the ECB's last meeting in December. It made intraday high at 1.0921 and low at 1.0867 levels. Short term weakness is only below 1.0800 and break below targets 1.0710/1.06700. On the higher side any break above 1.0940 will take the pair to next target 1.09800/1.1000. Short term bearish invalidation is only above 1.1000 and above that level a jump till 1.0600/1.1100 is possible.
USD/JPY: The yen retreated marginally against the dollar. The US dollar was traded 0.15% lower at ¥116.77 against the Japanese currency, while the currencies are likely to book more volatility during the day when the US initial jobless claims data is set to be published. The pair made intraday high at 117.47 and low at 116.47 levels. Major resistance is seen at 120.67 and support is seen at 115.74 levels.
GBP/USD: Sterling slid back towards a 7-year low against the dollar on Thursday, as investors found few reasons to buy the currency due to a slew of potential risks to the UK economy and with no interest rate rise in sight. It was once again on the back foot on Thursday, down 0.1 percent at $1.4185. While it was 0.2 percent down against the euro at 76.835 pence, close to 1-year low of 77.56 pence. The pair made intraday high at 1.4203 and low at 1.4101 levels. Major support is seen at 1.3653 and resistance is seen around 1.4750 levels.
NZD/USD: The New Zealand dollar rose 0.5 percent to $0.6460, after Wall Street pared losses toward the end of the U.S. session. Support was found around 64 cents, the 76.4 percent retracement of the Sept-Oct move. Resistance was seen at this week's peak of $0.6514. The kiwi touched a 4-month low of $0.6348 on Wednesday. New Zealand's manufacturing sector rose from the previous month and continued to revel in the expansionary zone last month, according to an industry gauge. The Business NZ-BNZ Performance of Manufacturing Index (PMI) rose from the 54.7 in November to 56.7 in December. It made intraday high at 0.6476 and low at 0.6411 levels. Initial support is seen at 0.6318 and resistance at 0.6896 levels.
AUD/USD: The Australian dollar was down 0.2 percent at $0.6894 having traded almost flat following the mild rebound in crude oil prices. Against the safe-haven yen, the Aussie rallied 1-1/2-yen to 81.52, pulling back from 3-1/2-year lows touched in the last session. The pair made intraday high at 0.6958 levels and low around 0.6875 levels. Initial support is seen at 0.6825 and resistance at 0.7050 levels.
Equities Recap
European shares were steady on Thursday after global markets wiped off trillions of dollars in the last two days. London's FTSE gained 0.2-0.4 percent in early trades gains, Germany's DAX rose 0.2 pct, France's CAC 40 was up 0.1 pct, while the FTSEurofirst 300 gained 0.4 pct.
Japan's Nikkei ended down 2.4 percent, adding to its 3.7 percent plunge in the previous session. China stocks ended down 3 percent after a volatile session. MSCI's broadest index of Asia-Pacific shares outside Japan hit a new 4-year low. HongKong's Hang Seng Index closed down 1.8 pct at 18,542.15 points.
Commodities Recap
Oil dropped back towards 12-year lows on persistent concerns about a supply overhang and the outlook for demand. International benchmark Brent was down 43 cents at $27.45 a barrel by 0913 GMT. Brent has lost 26 percent so far in January, on track for its biggest monthly fall since 2008. Front-month West Texas Intermediate crude futures traded at $28.09 per barrel, down 26 cents from their previous close.
Gold climbed to a near 1-1/2-week high, with its safe-haven appeal intact as equities and oil gave up early gains. Spot gold was up 0.3 percent at $1,103.80 an ounce by 0709 GMT.
Treasuries Recap
U.S. 30-year Treasury bond rose nearly 2 points in price, 30-year yield last stood at 2.715 pct.
German bund futures opened 25 ticks lower at 160.88, Portuguese 10-year yields rose 6 basis points to 3 percent, pulling the gap with German equivalents to its widest since October 2014. Italian equivalent yields were up 3 bps at 1.69 percent, the gap was the widest since August last year.
Australian government bond futures eased, with the 3-year bond contract off 2 ticks at 98.110. The 10-year contract also fell 2 to 97.3250, but the 20-year contract added half a tick to 96.8400. New Zealand government bonds eased slightly, pushing yields up 1.5 basis points across the curve.
