Market Roundup
- Eurozone Jan 2019 Markit service flash PMI decrease to 50.8 diff.idx (forecast 51.5 diff.idx) vs previous 51.2 diff.idx
- Eurozone Jan 2019 Markit composite flash PMI decrease to 50.7 diff.idx (forecast 51.4 diff.idx) vs previous 51.1 diff.idx
- Eurozone Jan 2019 Markit manufacturing flash PMI decrease to 50.5 diff.idx (forecast 51.4 diff.idx) vs previous 51.4 diff.idx
- Germany Jan 2019 Markit composite flash PMI increase to 52.1 diff.idx (forecast 51.9 diff.idx) vs previous 51.6 diff.idx
- Germany Jan 2019 Markit service flash PMI increase to 53.1 diff.idx (forecast 52.1 diff.idx) vs previous 51.8 diff.idx
- Germany Jan 2019 Markit manufacturing flash PMI decrease to 49.9 diff.idx (forecast 51.3 diff.idx) vs previous 51.5 diff.idx
- France Jan 2019 Markit manufacturing flash PMI increase to 51.2 diff.idx (forecast 49.9 diff.idx) vs previous 49.7 diff.idx
- France Jan 2019 Markit composite flash PMI decrease to 47.9 diff.idx (forecast 51 diff.idx) vs previous 48.7 diff.idx
- France Jan 2019 Markit service flash PMI decrease to 47.5 diff.idx (forecast 50.5 diff.idx) vs previous 49 diff.idx
- Italy Dec 2018 flash trade balance non-EU increase to 4.28 eur vs previous 3.35 eur
Economic Data Ahead
- (0745 ET/1245 GMT) The European Central Bank will announce its interest rate decision.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 7,000 to a seasonally adjusted 222,000 for the week ended Jan. 18, while continuing claims for the week ended Jan. 11 is expected to decline to 1.735 million from a previous reading of 1.737 million.
- (0945 ET/1445 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of January. The index is likely edged down to 53.5 after posted a final reading of 53.8 in the previous month.
- (0945 ET/1445 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index eased to 54.1 in January after printing a final reading of 54.4 in December.
- (0945 ET/1445 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of January. The index posted a final reading of 54.4 in the prior month.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending January 18.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending January 18.
Key Events Ahead
- (0830 ET/1330 GMT) ECB President Mario Draghi holds a press conference after the interest rate meeting in Frankfurt.
- (0830 ET/1330 GMT) Sweden Riksbank Deputy Governor Cecilia Skingsley participates in a panel discussion at the World Economic Forum titled "Monetary policy on the back of ECB"in Davos, Switzerland.
- (1030 ET/1530 GMT) Bank of England Governor Mark Carney speaks at the World Economic Forum event titled "Resetting Financial Governance" in Davos, Switzerland.
- NA Bank of Lithuania holds monetary policy meeting of the ECB governing council in Vilnius
- NA Roundtable with Tobias Adrian, director of the Monetary and Capital Markets Department, IMF in New York.
- NA Roundtable with Nathalie Aufauvre, director general for Financial Stability and Operations, Bank of France, in New York.
- NA Governing Council of the ECB holds monetary policy meeting in Frankfurt
FX Beat
DXY: The dollar index rebounded from a near 1-week low, as the euro eased on expectations the ECB will remain dovish, while sterling retreated from recent highs amid persisting Brexit worries. The greenback against a basket of currencies trades 0.3 percent up at 96.35, having touched a low of 96.04 earlier, its lowest since Jan. 18. FxWirePro's Hourly Dollar Strength Index stood at 7.83 (Neutral) by 0900 GMT.
EUR/USD: The euro slumped, hovering towards a 2-1/2 week low touched earlier in the week, as investors anxiously await the European Central Bank's monetary policy announcement later in the day, where policymakers may express caution about slowing economic growth. The ECB is all but certain to keep policy unchanged and likely to reaffirm its plan to raise interest rates by the end of the year. The European currency traded 0.3 percent down at 1.1343, having touched a low of 1.1336 on Tuesday, its lowest since Jan. 3. FxWirePro's Hourly Euro Strength Index stood at -43.73 (Neutral) by 0900 GMT. Immediate resistance is located at 1.1402 (December 18 High), a break above targets 1.1442 (December 10 High). On the downside, support is seen at 1.1353 (Jan. 18 Low), a break below could drag it till 1.1325 (Jan. 2 Low).
USD/JPY: The dollar edged up against the Japanese yen after a preliminary business survey showed that Japan's manufacturing growth stalled in January as export orders declined at the fastest pace in 2-1/2 years and companies reduced production. However, the upside remains capped amid concerns over the prolonged U.S. government shutdown and slowing global growth worries. The major was trading 0.1 percent up at 109.70, having hit a high of 109.99 on Wednesday, its highest since December 31. FxWirePro's Hourly Yen Strength Index stood at -44.99 (Neutral) by 0900 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, flash Markit PMI's and Senate's vote on the government shutdown. Immediate resistance is located at 110.47 (Dec. 31 High), a break above targets 111.19 (Dec. 24 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 eased after rising to a 2-1/2 month peak earlier in the session on growing optimism that British lawmakers would be able to avoid a no-deal Brexit. The major traded 0.1 percent down at 1.3051, having hit a high of 1.3094; it’s highest since November 8. FxWirePro's Hourly Sterling Strength Index stood at 95.18 (Slightly Bullish) 0900 GMT. Immediate resistance is located at 1.3132 (October 8 High), a break above could take it near 1.3174 (November 7 High). On the downside, support is seen at 1.3021 (November 6 Low), a break below targets 1.2964 (November 5 Low). Against the euro, the pound was trading 0.2 percent up at 86.91 pence, having hit a high of 86.88, it’s highest since November 14.
USD/CHF: The Swiss franc edged up to a near 1-week peak, amid concerns over global growth, the U.S. government shutdown and U.S.-China trade dispute. The major trades 0.05 percent down at 0.9940, having touched a high of 0.9990 on Wednesday; it’s highest since December 5. FxWirePro's Hourly Swiss Franc Strength Index stood at -4.50 (Neutral) by 0900 GMT. On the higher side, near-term resistance is around 1.0008 (December 5 High) and any break above will take the pair to next level till 1.0026 (October 26 High). The near-term support is around 0.9917 (December 17 Low), and any close below that level will drag it till 0.9889 (December 7 Low).
Equities Recap
European shares rallied as markets expect the European Central Bank at the end of its policy meet to reiterate that an interest rate hike is likely late this year.
The pan-European STOXX 600 index gained 0.4 percent at 356.27 points, while the FTSEurofirst 300 index surged 0.4 percent to 1,400.01 points.
Britain's FTSE 100 trades 0.1 percent down at 6,836.98 points, while mid-cap FTSE 250 gained 0.2 to 18,625.12 points.
Germany's DAX rose 0.5 percent at 11,131.10 points; France's CAC 40 trades 0.5 percent higher at 4,866.44 points.
Commodities Recap
Crude oil prices surged amid lingering concerns that slowing global economic growth may limit fuel demand. International benchmark Brent crude was trading 0.4 percent up at $61.17 per barrel by 0922 GMT, having hit a high of $63.12 on Monday, its highest since December 7. U.S. West Texas Intermediate was trading 0.5 percent higher at $52.65 a barrel, after rising as high as $54.30 on Tuesday, its highest since the December 5.
Gold prices declined, extending previous session losses, as the greenback rebounded from a near 1-week low. Spot gold was trading 0.3 percent down at $1,279.28 per ounce by 0926 GMT, having touched a low of $1,276.69 on Monday, its lowest level since Jan. 4. U.S. gold futures were down 0.2 percent at $1,281 per ounce.
Treasuries Recap
The U.S. Treasuries gained during late European session as concerns over the month-long government shutdown still keep investors abated amid talks of a plausible trade deal between the U.S. and China. The yield on the benchmark 10-year Treasury yield slumped 2 basis points to 2.735 percent, the super-long 30-year bond yields also fell nearly 2 basis points to 3.050 percent and the yield on the short-term 2-year traded nearly 1 basis point lower at 2.583 percent.
The German bunds surged during European session after the country’s manufacturing PMI for the month of January disappointed market sentiments ahead of European Central Bank’s (ECB) monetary policy meeting, scheduled to be held today by 12:45GMT. The German 10-year bond yields, which move inversely to its price, fell nearly 2 basis points to 0.209 percent, the yield on 30-year note slipped 1-1/2 basis points to 0.814 percent and the yield on short-term 2-year remained tad lower at -0.583 percent.
The Japanese government bonds remained narrowly mixed after the Bank of Japan (BoJ) trimmed the country’s 2019 inflation outlook at its monetary policy meeting held yesterday amid concerns over global growth following statistics revealed by the International Monetary Fund (IMF) off late. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 1 basis point to 0.009 percent, the yield on the long-term 30-year note hovered around 0.664 percent while the yield on short-term 2-year plunged 16 basis points to -0.159 percent.
The Australian government bonds climbed across the curve during Asian trading session despite a higher-than-expected rise in the country’s employment change for the month of December, while unemployment rate cheered market investors, falling, unexpectedly to the consensus estimate. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 1-1/2 basis points to 2.271 percent, the yield on the long-term 30-year bond slumped 2-1/2 basis points to 2.784 percent and the yield on short-term 2-year also traded nearly 2-1/2 basis points lower at 1.865 percent.
