Global Markets:
- Asian stock markets: Nikkei down 2.40 %, Shanghai Composite gained 0.50 %, Hang Seng rose 0.75 %, ASX 200 rallied 0.45 %
- Commodities: Gold at $1103.30 (-0.25 %), Silver at $14.17 (+0.05 %), WTI Oil at $28.20 (-0.50 %), Brent Oil at $27.78 (-0.15 %)
- Rates: US 10 year yield at 1.99, UK 10 year yield at 0.49, German 10 year yield at 0.22
News & Data:
- Australia HIA New Home Sales (MoM) Nov: -2.7% (prev -3.0%)
- Australia Consumer Inflation Expectations (Jan): 3.6% (prev 4.0%)
- New Zealand ANZ Consumer Confidence Index (Jan): 121.4 (prev 118.7)
- UK RICS House Price Balance (Dec): 50% (exp 50% prev 49%)
- New Zealand BusinessNZ Manufacturing PMI (Dec): 56.7 (prev rev 54.9)
- Brazil Central Bank Leaves Benchmark Rate Unchanged At 14.25%
- PBoC Fixes Yuan Reference Rate At 6.5585 (prev 6.5578)
- Asia stocks get welcome respite as crude prices bounce – RTRS
- Oil prices stabilize but market sentiment remains bearish – RTRS
- China shares modestly higher as oil bounces, yuan steady – RTRS
Markets Update:
It was a risk-off again in Asia, as the Euro and Yen strengthened, while the commodity currencies fell. USD/JPY declined from 117.45 to 116.80 overnight; 116.00 support held yesterday, but is looking fragile. Should we see a break below it, a test of the 115 level seems likely. The Euro recovered slightly in Asia after being under pressure yesterday. EUR/USD once again failed to sustain momentum above 1.0950 and gave up all its gains, falling back to 1.0870. Tokyo had decent demand for EUR/USD however and it was able to bounce from there and get back to 1.09.
USD/CAD fell sharply after the Bank of Canada decided to leave interest rates unchanged. Some expected that the central bank will cut rates by 25 bps, so they had to cover their long positions. The pair declined from 1.4620 to 1.4490 and extended losses to 1.4450 in the Asian session. However, it found support there and climbed back to 1.4510.
AUD/USD managed to hold above 0.6830 support and rallied together with the other commodity currencies into the NY close. It reached 0.69550 ahead of the Tokyo open, but ran out of momentum and eventually fell back to 0.6890. Key support now lies at 0.6825/30, while resistance can be expected at 0.6960 and 0.70.
Upcoming Events:
- 12:45 GMT – ECB Interest Rate Decision
- 13:30 GMT – ECB Press Conference
- 13:30 GMT – US Initial Jobless Claims
- 13:30 GMT – US Phily Fed Manufacturing Index
- 15:00 GMT – Euro Zone Consumer Confidence
- 16:00 GMT – US Crude Oil Inventories
