Market Roundup
- EUR/USD -0.24%, USD/JPY -0.56%, GBP/USD -0.63%, EUR/GBP 0.38%
- DXY 0.10%, DAX -0.21%, FTSE -0.87%, Brent -1.36%, Gold 0.38%
- EZ Dec Markit Mfg Final PMI, 51.4, 51.4 f'cast, 51.8 prev
- DE Dec Markit/BME Mfg PMI, 51.5, 51.5 f'cast, 51.8 prev
- GB Dec Markit/CIPS/Mfg PMI, 54.2, 52.5 f'cast, 53.1 prev, 53.6 rvsd
- FR Dec Markit Mfg PMI, 49.7, 49.7 f'cast, 50.8 prev
- IT Dec Markit/IHS Mfg PMI, 49.2, 48.6 f'cast, 48.6 prev
- U.S. Congress to reconvene with no end in sight for federal shutdown
- Oil falls to $53 on economic worries, surging supply
Economic Data Ahead
- (0855 ET/ 1355 GMT) US w/e 29 Dec Redbook YY, 7.8% prev
- (0855 ET/ 1355 GMT) US w/e 29 Dec Redbook MM, 0.1% prev
- (0930 ET/ 1430 GMT) CA Dec Markit Mfg PMI SA, 54.9 prev
- (0945 ET/ 1445 GMT) US Dec Markit Mfg PMI Final, 53.9 prev
Key Events Ahead
- No major event scheduled
FX Beat
DXY: DXY erases loses, edges higher from lows at 95.82, trades 0.13 percent higher at 96.21 at 1040 GMT. US government shutdown, US-China trade war fears continue to weigh on sentiment. Technical bias bearish. 110-EMA offers strong support at 95.90. Break below to see further downside.
EUR/USD: EUR/USD upside stalled at stiff resistance at 110-EMA. Final December PMIs in Euroland offered no surprise, broadly matched the preliminary readings. The pair has receded from 8-week highs at 1.1496 and was trading at 1.1438 at 1050 GMT. Technical indicators on weekly charts are biased bearish. Upside continuation only on decisive breakout at 110-EMA. On the lower side, break below 55-EMA could see weakness till 1.1342 (Dec 26 low)
USD/JPY: USD/JPY hits 7-month lows at 108.70, risk-off sentiment keeps bias lower. The pair has resumed downside after a brief pause, extends weakness below 200-DMA. Concerns about global economic slowdown, partial US shutdown, US-China trade war fears and the slump in global equities keep traders on the edge. Technical studies support further weakness, scope for test of 61.8% Fib at 108.38. Break above 200-DMA could see upside till daily cloud. Breakout above cloud negates bearish bias.
GBP/USD: Cable trades lower despite upbeat UK PMI data. Focus remains on the Parliament debate on the UK PM Theresa May's Brexit agreement, set to resume in the week of January 7. Brexit uncertainties might continue to cap any meaningful up-move. GBP/USD trades 0.53% lower on the day at 1.2671 at 1100 GMT. Long-term trend is bearish. Recovery was capped at 55-EMA and break below 20-DMA support at 1.2655 could see resumption of downside.
AUD/USD: AUD/USD extends free-fall to hits new 3-year lows. Aussie's confidence continues to evaporate after China's manufacturing PMI for December showed contraction for the first time since early 2017, cementing fears of a slowdown. The pair has breached major trendline support on the monthly charts, next major support lies at 0.69 (Sept 2015 low) ahead of 0.6827 (Jan 2016 low). On the flipside, 5-DMA is immediate resistance at 0.7036. Break above 200-DMA could see some upside.
Equities Recap
European shares extend steep falls into 2019 as fears of a global growth slowdown, trade wars, rising U.S. interest rates and political instability continue to roil markets.
At 1030 GMT, the pan-European STOXX 600 index down 0.36 percent at 334.46 points, while the FTSEurofirst 300 index declined 1.20 percent to 1,314.48 points.
Britain's FTSE 100 trades 0.94 percent down at 6,664.79 points, while mid-cap FTSE 250 fell 0.31 percent to 17,448.15 points.
Germany's DAX fell 0.53 percent at 10,501.79 points; France's CAC 40 trades 1.92 percent lower at 4,639.70 points.
Commodities Recap
Oil slips on surging output in U.S., Russia and concerns about on an economic slowdown. Brent crude futures were down 1.2 percent at $53.22 per barrel at 0745 GMT, while WTI futures were at $44.89 per barrel, down 1.2 percent.
Gold hits 6-month highs amid rising risk-off. Spot gold was up 0.28 percent at $1,285.71 an ounce as of 0816 GMT. U.S. gold futures rose 0.5 percent to $1,287.80 per ounce.
Among other precious metals, palladium fell 0.77 percent to $1,254.30 per ounce. Silver was down 0.13 percent at $15.42 an ounce, while platinum was flat at $791.40 per ounce.
Treasuries Recap
U.S.: The U.S. Treasuries climbed during late afternoon session Wednesday as investors remained wary about the country’s partial government shutdown after President Donald Trump refused to sign a legislation that did not contain the necessary funding for the built of Mexico border wall. The yield on the benchmark 10-year Treasuries slumped 3 basis points to 2.661 percent, the super-long 30-year bond yields also plunged 3 basis points to 2.991 percent and the yield on the short-term 2-year traded tad lower at 2.494 percent.
UK: The UK gilts climbed during Wednesday’s afternoon session after the country’s manufacturing PMI for the month of December, released today, beat market expectations, also higher than the previous reading in November. Investors will now remain focused on Britain’s construction PMI for the similar period, due on January 3 for further direction in the debt market.The yield on the benchmark 10-year gilts, plunged 6-1/2 basis points to 1.205 percent, the super-long 30-year bond yields plunged nearly 4 basis points to 1.779 percent and the yield on the short-term 2-year traded 5 basis points lower at 0.700 percent.
EUR: The German bunds jumped during European session Wednesday after the country’s manufacturing PMI for the month of December, released today, remained unchanged, also meet market expectations. Investors will now look forward to the country’s unemployment change data, for December, scheduled to be released on January 4 by 08:55GMT for further direction in the debt market, besides the Eurozone’s consumer price inflation (CPI) data for the similar period, also due on the same day by 10:00GMT. The German 10-year bond yields, which move inversely to its price, fell 2 basis points to 0.388 percent, the yield on 30-year note also slipped nearly 2 basis points to 1.037 percent and the yield on short-term 2-year lost nearly 1-1/2 basis points to -0.643 percent.
JGBs: The Japanese government bonds remained flat during Wednesday, as investors remained sidelined amid a series of government holidays, following the long weekend-off on account of New Year. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained steady at -0.001 percent, the yield on the long-term 30-year note hovered around 0.706 percent and the yield on short-term 2-year too remained flat at -0.140 percent.
