Market Roundup
- EUR/USD 0.09%, USD/JPY -1.18%, GBP/USD -0.41%, EUR/GBP 0.49%
- DXY -0.30%, DAX -1.22%, FTSE -0.35%, Brent -0.18%, Gold 0.24%
- GB Dec Markit/CIPS Cons PMI, 52.8, 52.9 f'cast, 53.4 prev
- UK services growth drops to two-year low in Q4 in Brexit "stasis" - BCC
- No-deal EU exit "far more likely" if parliament rejects PM May's deal - Brexit minister
- EZ Nov Loans to Households, 3.3%, 3.2% prev
- EZ Nov Loans to Non-Fin, 4.0%, 3.9% prev
- EZ Nov Money-M3 Annual Growth, 3.7%, 3.8% f'cast, 3.9% prev
- U.S. Democrats to push shutdown halt that Trump unlikely to accept
Economic Data Ahead
- (0800 ET/ 1300 GMT) US Nov Build Permits R Numb, 1.328 mln prev
- (0800 ET/ 1300 GMT) US Nov Build Permits R Chg MM, 5.0% prev
- (0815 ET/ 1315 GMT) US Dec ADP National Employment, 178k f'cast, 179k prev
- (0830 ET/ 1330 GMT) US w/e 29 Dec Initial Jobless Claims, 220k f'cast, 216k prev
- (0830 ET/ 1330 GMT) US w/e 22 Dec Continued Jobless Claims, 1.701 mln prev
- (1000 ET/ 1500 GMT) US Dec ISM Mfg PMI, 57.9 f'cast, 59.3 prev
- (1000 ET/ 1500 GMT) US Dec ISM Mfg Prices Paid, 58.0 f'cast, 60.7 prev
- (1000 ET/ 1500 GMT) US Nov New Home Sales-Units, 0.560 mln f'cast, 0.544 mln prev
- (1000 ET/ 1500 GMT) US Nov New Home Sales-Chg MM, 2.9% f'cast, -8.9% prev
- (1530 ET/ 2030 GMT) US Dec Total Vehicle Sales, 17.20 mln f'cast, 17.49 mln prev
Key Events Ahead
- No major event scheduled
FX Beat
DXY: Dollar index pares Wednesday's gains, slips lower to 96.43 before recovering to 96.67 at the time of writing. Focus on US private payrolls measured by the ADP report ahead of the key ISM Manufacturing.
EUR/USD: EUR/USD trades muted at 1.1351 at 1140 GMT. Recovery from the flash crash lows of 1.1310 fizzled out at 21-EMA resistance. Technical studies for the day are neutral. Focus on U.S. ADP jobs and ISM manufacturing PMI numbers for a fresh take on the US economy. Downbeat US macro data could drive EUR/USD back above 1.14 handle. Strong support is seen at 200W SMA at 1.1313. Weakness only on break below.
USD/JPY: USD/JPY briefly slumped below 105 handle, dived nearly 420 pips within a matter of seconds. A revenue warning from Apple Inc. triggered a ‘flash crash’. The news keeps demand for the safe-haven Yen at full steam amid widespread risk-aversion. The pair has tested 200M SMA at 104.81, hit 10-month lows at 104.74 before paring some losses to currently trade at 107.57. 104.81 (200M SMA) is strong support, while 111.04 (200-DMA) offers major resistance. Focus now also on the U.S. ADP jobs and ISM manufacturing PMI numbers for a fresh take on the US economy.
GBP/USD: Sterling fell across the board on Thursday. Pound plummeted to its lowest since April 2017 in early Asian trading after a "flash crash" forced widespread selling of sterling. Cable fell to as low as $1.2409 before paring some losses to currently trade at 1.2564. Weekly charts are bearishly aligned. Major trend in the pair remains bearish. Immediate resistance lies at 20-DMA at 1.2644. Brexit uncertainty to keep pressure on the pair. We see little support till 1.21 (Mar 2017 low).
EUR/JPY: EUR/JPY recovers from 20-month lows at 118.82. Safe-haven yen remains in demand as worries over a global economic slowdown heightened after Apple's revenue guidance. The pair has recovered from lows to currently trade at 122.11. Technical studies are in support of further weakness. Next bear target lies at 78.6% Fib at 115.77. That said, caution advised as there is a chance that the Bank of Japan will intervene in the fx markets after the biggest Yen surge in nearly 10 years.
Equities Recap
European shares joined a selloff in Asia as Apple warning compounded fears of slowing global growth. At 1100 GMT, the pan-European STOXX 600 index down 0.66 percent at 334.60 points, while the FTSEurofirst 300 index declined 0.98 percent to 1,314.37 points.
Britain's FTSE 100 trades 0.32 percent down at 6,712.90 points, while mid-cap FTSE 250 fell 0.12 percent to 17,565.39 points.
Germany's DAX fell 1.30 percent at 10,442.40 points; France's CAC 40 trades 1.26 percent lower at 4,630.10 points.
Commodities Recap
WTI fails to extend gains, slips lower on swelling oversupply, volatile markets. U.S. West Texas Intermediate (WTI) crude oil futures dropped by 1.8 percent to $45.72 by 0739 GMT. International Brent crude futures were down 1 percent, or 53 cents, at $54.38 a barrel.
Gold hits fresh 6-month highs. Spot gold hit $1,292.32 per ounce at 0819 GMT, highest since June 15. U.S. gold futures were up 0.6 percent at $1,291.20 per ounce.
Among other precious metals, palladium gained 0.9 percent to $1,265.74 per ounce. Silver was up about 0.5 percent at $15.58 an ounce, while platinum rose 0.3 percent to $796.60 per ounce.
Treasuries Recap
U.S.: The U.S. Treasuries surged during late afternoon session Thursday as investors still remain concerned 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. Investors will now be eyeing the country’s ADP non-farm employment change for the month of December and ISM manufacturing PMI for the similar period, both scheduled to be released later today. The yield on the benchmark 10-year Treasuries slumped nearly 2-1/2 basis points to 2.638 percent, the super-long 30-year bond yields also plunged closely by 3 basis points to 2.955 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points lower at 2.492 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 remained narrowly mixed during European session Thursday ahead of the country’s unemployment change data, for December, scheduled to be released on January 4 by 08:55GMT, 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, hovered around 0.174 percent, the yield on 30-year note rose nearly 1 basis point to 0.814 percent and the yield on short-term 2-year remained flat at -0.609 percent.
AUS: Australian government bonds gained across the curve during early Asian session Thursday as investors moved to safe-haven buying amid rising concerns of a global growth slowdown. Also, demand for U.S. Treasuries and German bunds rose after disappointing economic data from Europe and Asia and a partial shutdown of the U.S. government continued. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 9 basis points to 2.193 percent, the yield on the long-term 30-year bond also dipped 8-1/2 basis points to 2.700 percent and the yield on short-term 2-year down 5 basis points to 1.820 percent.
