Market Roundup
- Eurozone Dec 2018 broad money increase to 12368206 eur vs previous 12306115 eur (revised from 12305126 eur)
- Eurozone Dec 2018 loans to non-fin stays flat at 4 % vs previous 4 %
- Eurozone Dec 2018 loans to households stays flat at 3.3 % vs previous 3.3 %
- Eurozone Dec 2018 money-M3 annual growth increase to 4.1 % (forecast 3.8 %) vs previous 3.7 %
Economic Data Ahead
- (0830 ET/1330 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of December. The index stood at 0.22 in the prior month.
- (1030 ET/1530 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of January. The index posted a declined 5.1 percent in the previous month.
Key Events Ahead
- (0900 ET/1400 GMT) Introductory statement by ECB's Mario Draghi at ECON Hearing of the European Parliament - Brussels
- (0930 ET/1430 GMT) Bank of England Governor Mark Carney's speech.
FX Beat
DXY: The dollar index plunged as investors await Wednesday's Fed meeting, where policymakers are expected to signal a pause in their tightening cycle and to acknowledge growing risks to the U.S. economy. The greenback against a basket of currencies trades down at 95.76, having touched a low of 95.67, its lowest since Jan. 15. FxWirePro's Hourly Dollar Strength Index stood at -107.73 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro advanced to a near 2-week peak after data showed Eurozone's lending growth held steady in December, while a broader indicator of money circulating in the economy surged. However, the upside appears limited as investors expect the ECB to remain dovish for an extended period. The European currency traded 0.05 percent up at 1.1412, having touched a high of 1.1425, its highest since Jan. 15. FxWirePro's Hourly Euro Strength Index stood at 69.02 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1442 (December 10 High), a break above targets 1.1484 (December 4 High). On the downside, support is seen at 1.1370 (Jan. 17 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar eased, extending previous session losses, as investors remained cautious ahead of U.S.-China trade talks and a Federal Reserve policy decision. The major was trading 0.1 percent down at 109.44, having hit a low of 109.26, its lowest since January 22. FxWirePro's Hourly Yen Strength Index stood at -84.52 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Dallas Fed Manufacturing business index. Immediate resistance is located at 109.88 (Jan. 18 High), a break above targets 110.47 (Dec. 31 High). On the downside, support is seen at 108.70 (Jan. 2 Low), a break below could take it lower at 108.44 (Jan. 8 Low).
GBP/USD: Sterling retreated from a near 3-1/2 month peak touched in the previous session, as investors remained on the sidelines ahead of crucial votes in the British parliament that will aim to break a Brexit deadlock. The major traded 0.2 percent down at 1.3177, having hit a high of 1.3217 on Friday; it’s highest since October 16. FxWirePro's Hourly Sterling Strength Index stood at 33.61 (Neutral) 1000 GMT. Immediate resistance is located at 1.3257 (October 12 High), a break above could take it near 1.3298 (September 20 High). On the downside, support is seen at 1.3082 (October 15 Low), a break below targets 1.3021 (November 6 Low). Against the euro, the pound was trading 0.3 percent down at 86.65 pence, having hit a high of 86.16 on Friday, it’s highest since May 2017.
USD/CHF: The Swiss franc rallied to an over 1-week peak, as cautiousness ahead of the U.S.-China trade talks and the Federal Reserve's policy meeting sent investors seeking safety in safe-haven assets. The major trades 0.2 percent down at 0.9913, having touched a low of 0.9912 earlier; it’s lowest since December 17. FxWirePro's Hourly Swiss Franc Strength Index stood at -16.14 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9963 (December 26 High) and any break above will take the pair to next level till 1.0008 (December 5 High). The near-term support is around 0.9889 (December 7 Low), and any close below that level will drag it till 0.9840 (December 27 Low).
Equities Recap
European shares tumbled as optimism about the end of the U.S. government shutdown faded, while sterling retreated from recent peaks as investors braced for the key votes on Brexit.
The pan-European STOXX 600 index plunged 0.2 percent at 356.98 points, while the FTSEurofirst 300 index slumped 0.3 percent to 1,399.84 points.
Britain's FTSE 100 trades 0.2 percent down at 6,798.60 points, while mid-cap FTSE 250 eased 0.1 to 18,632.04 points.
Germany's DAX fell 0.2 percent at 11,263.51 points; France's CAC 40 trades 0.4 percent lower at 4,905.45 points.
Commodities Recap
Crude oil prices declined by more than 1 percent after U.S. companies added rigs for the first time this year, a signal that crude output may rise further. International benchmark Brent crude was trading 1.5 percent down at $60.60 per barrel by 1043 GMT, having hit a high of $63.12 last week, its highest since December 7. U.S. West Texas Intermediate was trading 1.5 percent lower at $52.69 a barrel, after rising as high as $54.30 on Tuesday, its highest since the December 5.
Gold prices eased after rising to a 7-month peak earlier in the session on hopes the U.S. Federal Reserve will keep interest rates unchanged during its two-day policy meeting later in the week. Spot gold fell 0.1 percent down at $1,301.61 per ounce by 1045 GMT, having touched a high of $1,304.33 earlier, its highest level since June 14. U.S. gold futures climbed 0.2 percent to $1,300 per ounce.
Treasuries Recap
The U.S. Treasuries traded steady during late European session, as investors remained side-lined amid a quiet session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury yield remained tad higher at 2.755 percent, the super-long 30-year bond yields remained flat at 3.061 percent and the yield on the short-term 2-year traded nearly 1 basis point higher at 2.607 percent.
The German bunds remained mixed during European session ahead of the European Central Bank (ECB) President Mario Draghi’s speech, scheduled to be held today by 14:00GMT and the country’s short-term 2-year auction, due on January 29 by 10:40GMT, for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, remained tad lower at 0.195 percent, the yield on 30-year note hovered around 0.783 percent and the yield on short-term 2-year slipped 1 basis point to -0.587 percent.
The Japanese government bonds remained flat on the first trading day of the week amid a muted session that witnessed data of little economic significance. Investors will now be eyeing the country’s retail sales and industrial production data for the month of December, scheduled to be released on January 29 and 30 by 23:50GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained flat at -0.001 percent, the yield on the long-term 30-year note hovered around 0.656 percent while the yield on short-term 2-year plunged 16 basis points to -0.163 percent.
