Global Markets:
- Asian stock markets: Nikkei up 0.50 %, Shanghai Composite gained 2.40 %, Hang Seng rallied 1.05 %, ASX fell 0.40 %
- Commodities: Gold at $1103 (-0.45 %), Silver at $14.18 (-1.20 %), WTI Oil at $33.95 (+2.05 %), Brent Oil at $34.45 (+2.10 %)
- Rates: US 10 year yield at 2.18, UK 10 year yield at 1.80, German 10 year yield at 0.54
News & Data:
- Australia Retail Sales (MoM) Nov: 0.4% (exp 0.4% prev 0.5%)
- Australia AIG PCI (Dec): 46.8 (prev 50.7)
- China FX Reserves (Dec): USD 3330.0bln (exp USD 3415.0bln; prev USD 3438.3bln)
- BoJ Consumer Sentiment Index (Q4): -17.3 (prev -15.2)
- BoJ Consumer Sentiment Outlook Index (Q4): -19.9 (prev -17.8)
- PBoC Intervening To Support Yuan — RTRS
- PBoC Fixes Yuan Reference Rate At 6.5636 (prev 6.5646)
- Fitch Assume Three 25-Basis Point Hikes In Fed Funds In '16
- Fitch Sees Consistent GDP Growth of 2.3-2.5 % In US
- Asian shares in for worst week in four years on panic over China – RTRS
- Yuan jumps as central bank guides rate up for first time in nine days – RTRS
- China Halts Run of Yuan Fixing Cuts That Rattled Global Markets – BBG
- China Stocks Gain in Volatile Trade as Circuit Breaker Scrapped – BBG
Markets Update:
Asian stock markets stabilized somewhat after China removed its new stock market circuit breaker that was introduced on Monday. Risk appetite improved in the FX market as well, with AUD and NZD being the two best performing currencies overnight, while the Japanese Yen, considered a safe haven, declined.
USD/JPY started the new trading day around 117.60 and rallied after the Tokyo open, as risk appetite improved. The pair rallied to a high of 118.60 eventually, where it ran out of momentum and fell back to 118.30. Key resistance is now seen at 118.70/80 and should it break above that, it would pave the way for a 119.20 test.
EUR/USD fell overnight, after an impressive rally yesterday. The Euro benefited from the decline in European equity markets, but gave up some of it gains after sentiment improved. The pair dropped from 1.0940 to a low of 1.0875 in Asia.
GBP/USD also recovered somewhat after almost reaching 1.45 yesterday. It rallied to 1.4645 overnight, but techs remain bearish and further gains may remain limited.
The focus today will be on US employment data. The market is expecting a 200k print for the NFP, while the unemployment rate is anticipated to remain unchanged at 5.0 %.
Economic Calendar:
- 06:45 GMT – Swiss Unemployment Rate
- 07:00 GMT – German Industrial Production
- 07:00 GMT – German Trade Balance
- 08:15 GMT – Swiss CPI
- 09:30 GMT – UK Trade Balance
- 13:30 GMT – US NFP
- 13:30 GMT – US Unemployment Rate
- 13:30 GMT – US Average Hourly Earnings
- 13:30 GMT – Canadian Unemployment Rate
- 13:30 GMT – Canadian Employment Change
- 15:00 GMT – US Wholesale Inventories
