Market Roundup
•Australia MI Leading Index (MoM) (Dec)0.1%, 0.0% previous.
•New Zealand RBNZ Offshore Holdings (Dec) 57.50% , 58.00% previous.
Looking Ahead Economic Data (GMT)
•07:00 UK PPI Input (MoM) (Dec): -0.1% forecast, 0.3% previous.
•07:00 UK CPI (MoM) (Dec): 0.4% forecast, -0.2% previous.
•07:00 UK PPI Input (YoY) (Dec): 1.1% previous.
•07:00 UK Core PPI Output (MoM) (Dec): 0.0% previous.
•07:00 UK Core PPI Output (YoY) (Dec): 3.5% previous.
•07:00 UK PPI Output (YoY) (Dec): 3.4% previous.
•07:00 UK RPI (MoM) (Dec): 0.5% forecast, -0.4% previous.
•07:00 UK RPI (YoY) (Dec): 4.1% forecast, 3.8% previous.
•07:00 UK Core RPI (MoM) (Dec): -0.5% previous.
•07:00 UK P CPI, n.s.a (Dec): 139.50 previous.
•07:00 UK Core RPI (YoY) (Dec): 3.7% previous.
•07:00 UK Core CPI (YoY) (Dec): 3.3% forecast, 3.2% previous.
•07:00 UK Core CPI (MoM) (Dec): 0.3% forecast, -0.2% previous.
•07:00 UK PPI Output (MoM) (Dec): 0.1% forecast, 0.1% previous
•11:00 UK CBI Industrial Trends Orders (Jan)-33 forecast,-32 previous
Looking Ahead Events And Other Releases (GMT)
•07:30 ECB President Lagarde Speaks
Currency Forecast
EUR/USD : The euro firmed against dollar on Wednesday as greenback remained under pressure amid heightened tensions between the U.S. and NATO over Greenland. On Tuesday, Trump said there was"no going back" on his goal to control Greenland, refusing to rule out taking the Arctic island by force and lashing out at NATO allies.He later said, "we will work something out where NATO is going to be very happy and where we're going to be very happy."Meanwhile, French President Emmanuel Macron said Europe would not give in to bullies or be intimidated, in a scathing criticism of Trump's threat of steep tariffs at Davos if Europe does not let him take over Greenland. Immediate resistance can be seen at 1.1732(38.2%fib), an upside break can trigger rise towards 1.1806(23.6%fib).On the downside, immediate support is seen at 1.1701(SMA 20), a break below could take the pair towards 1.1666(50%fib).
GBP/USD: Sterling edged higher on Wednesday as dollar continued to weaken as White House threats over Greenland triggered a broad selloff in U.S. assets. Trump, however, doubled down on his rhetoric over Greenland, saying there was "no going back" on his goal to control the island, refusing to rule out taking it by force. His threat of tariffs on Europe has also rekindled fears of a global trade war.The European Union will convene an emergency summit in Brussels on Thursday to discuss the matter, with the long-standing U.S.-EU alliance clearly at risk.All eyes are now on the World Economic Forum in Davos where Trump is due to deliver a keenly awaited speech later in the global day, which could calm or inflame tensions with Europe.Immediate resistance can be seen at 1.3460(38.2%fib), an upside break can trigger rise towards 1.3496(Jan 12th high).On the downside, immediate support is seen at 1.3370(50%fib), a break below could take the pair towards 1.3331(Lower BB).
AUD/USD: The Australian dollar firmed on Wednesday as rising geopolitical tensions continued to weigh on the US dollar.On Monday, President Donald Trump’s renewed tariff threats over Greenland triggered a fresh wave of the “Sell America” trade seen after last April’s tariff moves. Investors sold US dollar on fears of prolonged uncertainty, strained alliances, weakening confidence in U.S. leadership, possible retaliation, and faster de-dollarisation.Looking ahead, investors awaited Australian jobs data this week, with December employment seen rising about 30,000 and the unemployment rate edging up to 4.4%.In the U.S., focus will be on third-quarter GDP data, expected to show annualized growth of 4.3%, and November core PCE inflation, forecast at 0.2% month-on-month. Immediate resistance can be seen at 0.6749(Higher BB), an upside break can trigger rise towards 0.6768(23.6%fib).On the downside, immediate support is seen at 0.6701(38.2%fib), a break below could take the pair towards 0.6699(SMA 20)
USD/JPY: The U.S. dollar was little changed against the yen on Wednesday as investors were cautious amid intervention fears, hawkish BoJ expectations..Investors also eyed the Bank of Japan’s policy meeting later this week, where rates are widely expected to stay unchanged following a December hike.Traders remained alert to potential yen intervention amid worries about the impact of a weaker currency on domestic inflation.Japan's chief cabinet secretary said on Tuesday the government was watching long-term rates moves closely.Inflation has been running above the Bank of Japan's target for nearly four years and Takaichi's platform of more spending is driving worries it gets out of hand and has been pushing down on the currency. Immediate resistance can be seen at 159.21(23.6%fib) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 158.00(Psychological level) a break below could take the pair towards 157.11 (SMA 20).
Equities Recap
Asian stocks fell for a third straight session on Wednesday amid U.S.-Greenland tensions, while the global bond selloff showed signs of easing.
China A50 was down 0.27%, Japan’s Nikkei 225 was down by 0.47% ,South Korea’s KOSPI was down at 0.75%
Commodities Recap
Oil prices slipped on Wednesday as a likely rise in U.S. crude stocks offset Kazakhstan supply disruptions and U.S. tariff threats over Greenland.
Brent futures fell 79 cents, or 1.22%, to $64.13 a barrel at 0201 GMT. The U.S. West Texas Intermediate crude contract lost 64 cents, or 1.06%, to trade at $59.72 a barrel.
Gold hit a new record above $4,800 on Wednesday, supported by safe-haven demand and a weaker dollar amid rising geopolitical tensions over Trump’s Greenland bid.
Spot gold rose 1.2% to $4,818.03 per ounce as of 0125 GMT, after scaling a record peak of $4,836.24 earlier in the session.
U.S. gold futures for February delivery added 1% to $4,813.50 per ounce.
