Market Briefs
- Japan Chief CabSec Suga– Japan active investment source of US-Japan vitality, Americans aware Japan firms good corporate citizens – Reuters.
- MoF Dec flow data – Japanese sell net Y273.3 bln foreign stocks, Y1.8571 trln bonds, Y1.348 trln bills; foreign investors buy net Y589.6 bln Japanese stocks, sell Y123.2 bln JGBs, buy Y2.0319 trln bills.
- Japan Nov c/a surplus Y1.4155 trln, Y1.5 trln forecast, Oct surplus Y1.7199 trln.
- Japan Dec bank loans +2.6% y/y to Y509.555 trln, Nov +2.4%, Sept +2.4%.
- Japan Dec economy watchers’ survey service worker DI -0.4 to 51.4, still 50+.
- Toyota Pres Toyoda meets with US VP-elect Pence in Washington, DC – Kyodo.
- NAB marketing 7-year samurais, Daiwa-SMBC Nikko leads – IFR.
- AFLAC to sell multi-tranche JPY bonds via BAML, Mizuho, MS, SMBC Nikko – IFR.
- China NDRC Xu – Economy stable, continuing momentum up, internal-external complexities still – Reuters.
- China NDRC approves $26.5 bln fixed-asset investment in December – Reuters.
- China Commerce Min – Challenging, complicated trade outlook for ’17 –Reuters.
- New Zealand Dec ANZ commodity price index +0.7% m/m,+16.5% y/y, dairy-driven rise.
Economic Data Ahead
- (0200 ET/0700 GMT) Sweden Reg Unemployment Rate
- (0245 ET/0745 GMT) France CPI (EU Norm) Final MM
- (0245 ET/0745 GMT) France CPI (EU Norm) Final YY
- (0245 ET/0745 GMT) France Inflation Ex- Tobacco MM
- (0245 ET/0745 GMT) France Inflation Ex- Tobacco Idx
- (0330 ET/0830 GMT) Sweden CPI MM
- (0330 ET/0830 GMT) Sweden CPI YY
- (0330 ET/0830 GMT) Sweden CPIF MM
- (0330 ET/0830 GMT) Sweden CPIF YY
- (0400 ET/0900 GMT) Germany Full Year GDP
- (0400 ET/0900 GMT) Italy Industrial Output MM SA
- (0400 ET/0900 GMT) Italy Industrial Output YY WDA
- (0500 ET/1000 GMT) Eurozone Industrial Production MM
- (0500 ET/1000 GMT) Eurozone Industrial Production YY
- (0600 ET/1100 GMT) Brazil Service Sector Growth YY
- (0830 ET/1330 GMT) United States Dec import/export prices, +0.7%, +0.1% m/m forecast; last -0.3%, -0.1%.
- (0830 ET/1330 GMT) United States w/e initial jobless claims, 255k forecast; last 235k.
Key Events Ahead
- N/A Moscow Gaidar Economics Forum (till January 14).
- (0500 ET/1000 GMT) Italy E2.5-3/2.25-2.75/1-1.5 bln 0.05/0.65/2.25% 2019/23/36 BTP auctions.
- (0530 ET/1030 GMT) UK DMO GBP2.25 bln 2.0% 2025 Gilt auction.
- (0545 ET/1045 GMT) Norges Bank DepGov Nicolaisen in Oslo panel discussion.
- (0700 ET/1200 GMT) Riksbank executive board meeting, December meeting minutes.
- (0830 ET/1330 GMT) Philly Fed Harker speaks at Main Line C&C annual meeting.
- (0845 ET/1345 GMT)Chicago Fed Evans in life insurers roundtable panel discussion.
- (1145 ET/1645 GMT) ABA Economic Advisory Committee press conference in Washington, DC.
- (1230 ET/1730 GMT) Atlanta Fed Lockhart speaks before Naples C&C.
- (1315 ET/1815 GMT) St Louis Fed Bullard presentation at Forecasters Club of New York.
- (1345 ET/1845 GMT) Dallas Fed Kaplan in Dallas Regional C&C moderated Q&A.
- (1730 ET/2230 GMT) FOMC Chair Yellen webcast townhall meeting.
FX Beat
DXY: The dollar declined versus its major peers as President-elect Donald Trump's long-awaited news conference provided limited clarity on his future fiscal policies. The greenback against a basket of currencies traded 0.26 percent down at 101.47, having hit a low of 101.28 in the previous session, its lowest since Dec. 14. FxWirePro's Hourly Dollar Strength Index stood at -58.59 (Bearish) by 0500 GMT.
EUR/USD: The euro advanced, extending previous session gains, as the dollar weakened after U.S. President-elect Donald Trump failed to provide clarity on his future fiscal policies at a press conference. On Wednesday, the major initially fell to a low of 1.0454, its lowest since Jan. 4, however, it retreated to close higher at 1.0581 following Trump's presser. The European currency trades 0.2 percent higher at 1.0606, hovering towards a peak of 1.0627 hit on Tuesday, its highest since Dec 30. FxWirePro's Hourly Euro Strength Index stood at 20.96 (Neutral) by 0400 GMT. Investors’ attention remains on Eurozone's industrial production figures and ECB Monetary Policy Meeting Accounts, ahead of series of U.S. macro fundamental drivers for further clues on the pair. Immediate resistance is located at 1.0630, a break above targets 1.0650. On the downside, support is seen at 1.0548 (9-EMA), a break below could drag it till 1.0500.
USD/JPY: The dollar slumped against the Japanese yen, extending losses for the fourth consecutive session, amid renewed weakness in the U.S. Treasury yields and the greenback across the board. President-elect Donald Trump's highly-anticipated news conference did not provide clarity on his promises to boost fiscal spending and cut taxes. The major trades 0.6 percent lower at 114.69, hovering towards a low of 114.24 hit in the previous session, its lowest since Dec. 9. Investors will continue to track board based market sentiment, ahead of the U.S. unemployment claims, import/export figures and Fed Speeches for further momentum on the pair. FxWirePro's Hourly Yen Strength Index stood at 170.26 (Highly Bullish) by 0400 GMT. Immediate resistance is located at 115.95 (9-EMA), a break above targets 116.35 (10-DMA). On the downside, support is seen at 114.00, a break below could take it near 113.50 (Dec 6 Low).
GBP/USD: Sterling rose above the 1.2200 handle, as the greenback came under pressure following Trump's pre-inaugural presser. On Wednesday, the major fell to a 3-month low as political uncertainties and downbeat trade figures weighed on the pound, however, it rallied to 1.2271 as Trump's presser failed to provide details on his fiscal spending and cut taxes plans. Sterling trades flat at 1.2208, having touched a low of 1.2037 in the previous session, its lowest since Oct. 7. FxWirePro's Hourly Sterling Strength Index stood at -47.76 (Neutral) by 0400 GMT. Investors now await series of U.S. economic data and Fed speeches, amid a lack of relevant data from the UK docket. Immediate resistance is located at 1.2261 (10-DMA), a break above could take it near 1.2295 (21-DMA). On the downside, support is seen at 1.2150, a break below targets 1.2100/ 1.2000. Against the euro, the pound trades 0.21 percent down at 86.83 pence, having hit a low of 87.63 on Tuesday, its lowest since Nov. 10.
AUD/USD: The Australian dollar stood firm near 1-month high as persistent weakness around the U.S. Treasury yields kept the selling pressure in the greenback intact. The major rallied almost 1 percent above the 0.7400 handle in the previous session, as the U.S. dollar slumped across the board after President-elect Donald Trump failed to elaborate on his economic policy. The Aussie trades 0.2 percent up at 0.7458, having hit a high of 0.7471 on Tuesday, it’s highest since Dec. 14. FxWirePro's Hourly Aussie Strength Index stood at 111.13 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of the U.S. jobless claims data and Federal Reserve speeches. Immediate support is seen at 0.7416 (Dec-7 Low), a break below could drag it lower 0.7400. On the upside, resistance is located at 0.7500, a break above targets 0.7530.
NZD/USD: The New Zealand dollar rose, extending previous session gains, as the greenback eased after Trump's news conference contained no details on tax cuts and infrastructure spending. Data released earlier showed ANZ commodity prices rose 0.7 percent in December, lower than the previous month’s 3.2 percent, however, the details indicated the dairy prices climbed for the seventh consecutive time, up 3.9 percent m/m. The Kiwi trades 0.2 percent up at 0.7071, having hit a high of 0.7087 on Wednesday, it’s strongest since Dec. 15. FxWirePro's Hourly Kiwi Strength Index was at 106.26 (Highly Bullish) by 0500 GMT. Investors will continue to track USD price action, ahead of the U.S. economic data due later in the day. Immediate resistance is located at 0.7100, a break above could take it till 0.7140. On the downside, support is seen at 0.7017 (5-DMA), a break below could drag it lower 0.7000.
Equities Recap
Asian shares gained, as worries of an outbreak of a global trade war eased after President-elect Donald Trump's news briefing.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.8 percent to its highest level since late October.
Tokyo's Nikkei fell 0.9 percent to 19,191.61 points, Australia's S&P/ASX 200 index declined 0.08 percent to 5,767.00 points and South Korea's KOSPI was trading 0.1 percent up at 2,077.18 points.
Shanghai composite index declined 0.21 percent to 3,130.02 points, while CSI300 index was trading 0.2 percent lower at 3,328.66 points.
Hong Kong’s Hang Seng was trading 0.51 percent lower at 22,817.33 points. Taiwan shares added 0.7 percent at 9,410.18 points.
Commodities Recap
Crude oil prices declined, giving up some of its previous session gains, as a rise in U.S. crude inventories and ample supplies from other producers weighed on market sentiment. International benchmark Brent crude was trading 0.33 percent lower at $55.06 per barrel by 0411 GMT, having hit a low of $53.57 in the previous session, its lowest since Dec. 15. U.S. West Texas Intermediate crude fell 0.4 percent at $52.14 a barrel, after falling as low as $50.69 on Wednesday.
Gold prices rose, hitting a 7-week high on the back of a weaker dollar after U.S. President-elect Donald Trump provided a little clarity on his plans for the economy. Spot gold was up 0.5 percent at $1,196.95 per ounce by 0419 GMT, having touched an early high of $1,198.65, its highest since Nov. 23. U.S. gold futures fell 0.2 percent to $1,193.70 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.3304 percent lower by 0.04 bps, while 5-year yield was down by 0.035 bps at 1.8411 percent.
The Australian 10-year bond yields slumped to over 6-week low, tracking firmness in U.S. Treasuries amid a lack of clarity by the United States President-elect Donald Trump in his press conference on Wednesday. In intraday trading, the 10-yield on the benchmark 10-year Treasury note fell more than 6 basis points to 2.68 percent, the yield on 15-year note plunged 10 basis points to 3.11 percent and the yield on short-term 2-year moved down 5 basis points to 1.83 percent.
The New Zealand 10-year bond yields plunged to almost 1-1/2 month low, while the medium-term 5-year bond yields hit lowest in over five weeks, following recovery in global debt market. In intraday trading, the yield on the benchmark 10-year bond cracked 10 basis points to 3.12 percent, the yield on 7-year note plunged nearly 7 basis points to 2.79 percent and the yield on the short-term 2-year note slid 4-1/2 basis points to 2.20 percent.
Canadian government bond prices were mixed across the yield curve, with the 2-year price down half a Canadian cent to yield 0.755 percent and the 10-year rising 4 Canadian cents to yield 1.677 percent.
