Market Roundup
• German Dec WPI (MoM) 0.0%,-0.1% previous
• German Dec WPI (YoY) -1.3%,-2.5% previous
• Italian Nov Retail Sales (MoM) -0.2%,.-0.3% previous
• Italian Nov Retail Sales (YoY) 0.9%,1.0% previous
• Russian Jan Forex Intervention 309.9B, 235.0B forecast, 195.5B previous
• U.K. Nov Construction Output (YoY) 2.0%,-1.4% forecast,-0.3% previous
• U.K GDP (YoY) 0.6%,1.0% previous
• U.K GDP (MoM) -0.3%,0.1% previous
• U.K Nov Industrial Production (MoM) -1.2%,-0.1% forecast 0.4% previous
• U.K Nov Manufacturing Production (MoM) -1.7%,-0.3% forecast, 0.5% previous
• U.K Monthly GDP 3M/3M Change 0.1%,-0.1% forecast, 0.2% previous
Looking Ahead - Economic Data (GMT)
• 15:00 US Dec CB Employment Trends Index 110.20 previous
• 21:00 US Dec Federal Budget Balance -196.5B, -209.0B previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Fx Beat
EUR/USD: The euro declined against the U.S. dollar on Monday, as dollar was supported by optimism on the US-China trade deal. A U.S.-China trade deal is due to be signed at the White House on Wednesday, though talks on a phase two package are likely to drag on for months. The euro was up 0.02 percent at $1.1108. An index that tracks the dollar versus a basket of six major currencies was down 0.11 at 97.42 on Monday. Immediate resistance can be seen at 1.1136 (Daily High), an upside break can trigger rise towards 1.1150 (9 DMA).On the downside, immediate support is seen at 1.1091 (50 DMA), a break below could take the pair towards 1.1000 (Psychological level).
GBP/USD: Sterling declined against dollar on Monday, after data showed Britain’s economy grew at its weakest annual pace in more than seven years in November. Data showed UK economy in November grew just 0.6% from a year before, the weakest expansion since June 2012, down from annual growth of 1.0% in October, which was an upward revision from previously reported data. The pound fell to $1.2975, down 0.64 percent on the day. Immediate resistance can be seen at 1.3059 (5 DMA), an upside break can trigger rise towards 1.3098 (11 DMA).On the downside, immediate support is seen at 1.2961 (50 DMA), a break below could take the pair towards 1.2900 (Psychological level).
USD/CHF: The dollar was little changed against the Swiss franc on Monday, as investors awaited signing of phase 1 China-U.S. trade deal. The main event of the week will be the signing of the Phase 1 trade deal between the United States and China on Wednesday. The Trump administration has invited at least 200 people to the White House for the ceremony.Greenback fell 0.1% versus the Swiss franc to 0.9772. Immediate resistance can be seen at 0.9737 (Daily high), an upside break can trigger rise towards 0.9763 (Jan 10th high).On the downside, immediate support is seen at 0.9714 (11 DMA), a break below could take the pair towards 0.9664 (Jan 20th low).
USD/JPY: The dollar strengthened against the Japanese yen on Monday, as signing of a preliminary U.S.-China trade deal decreaed demand for safe haven yen. The U.S.-China Phase 1 agreement, due to be signed at the White House on Wednesday, marks the first step toward ending a damaging 18-month trade dispute between the world’s two largest economies. The dollar was last up 0.4% at 109.87 yen, after earlier hitting 109.48 yen, its highest since Dec. 30. Strong resistance can be seen at 109.92 (Daily high), an upside break can trigger rise towards 110.08 (Higher BB).On the downside, immediate support is seen at 109.30 (5 DMA), a break below could take the pair towards 108.93 (11 DMA).
Equities Recap
European shares started Monday on a subdued note as markets awaited the signing of a Sino-U.S. trade deal later in the week, while technology stocks rose on a clutch of brokerage upgrades and price-target bumps.
At (GMT 12:56),UK's benchmark FTSE 100 was last trading higher at 0.31 percent, Germany's Dax was down by 0.10 percent, France’s CAC finished was up by 0.11 percent.
Commodities Recap
Gold prices fell 1% on Monday as optimism in equity markets ahead of the signing of an interim U.S.-China trade deal and lack of further escalation in Middle East tensions diminished bullion’s safe-haven appeal.
Spot gold dipped 0.7% to $1,551.25 per ounce as of 1101 GMT, having fallen 1% to $1,546.27 earlier in the session.U.S. gold futures fell 0.5% to $1,552.10.
Oil prices held steady on Monday as fears of conflict between the United States and Iran eased, with investors shifting their focus to this week’s scheduled signing of an initial U.S.-China trade deal, which could boost economic growth and demand.
Brent crude was up 1 cents at $64.99 per barrel at 0737 GMT, while West Texas Intermediate (WTI) crude was up 5 cents at $59.09 a barrel from the previous session.
**Treasuries Recap
**
U.S.: The U.S. Treasuries suffered during Monday’s afternoon session ahead of the country’s consumer price inflation (CPI) for the month of December, scheduled to be released today by 13:30GMT and FOMC member Williams’ speech, also due today by 14:00GMT. The yield on the benchmark 10-year Treasury yield surged nearly 2 basis points to 1.844 percent, the super-long 30-year bond yield jumped 2 basis points to 2.305 percent and the yield on the short-term 2-year gained 1 basis point to 1.582 percent.
UK: The United Kingdom’s gilts surged during European trading hours Monday after the country’s gross domestic product (GDP) for the month of December sharply declined, accompanied by a similar fall in Britain’s November manufacturing production. Investors will however, now, keep a close eye on the consumer price inflation (CPI) for December and the retail sales, all due for release later this week for further direction in the debt market. The yield on the benchmark 10-year gilts, slumped nearly 3 basis points to 0.744 percent, the 30-year yield edged tad 1/2 basis point down to 1.252 percent and the yield on the short-term 2-year plunged over 6 basis points to 0.476 percent
EUR: The German bunds slid during European trading session Monday amid silent trading hours that witnessed data of little economic significance ahead of eurozone’s industrial production and trade balance data for the month of November, scheduled to be released on January 15 by 10:00 GMT. The German 10-year bond yield, which moves inversely to its price, gained 1-1/2 basis points to -0.215 percent, the yield on 30-year note jumped 2-1/2 basis points to 0.342 percent and the yield on short-term 2-year traded 1 basis point higher at -0.592 percent.
AUS: The Australian bonds jumped during Asian session of the first trading day of the week Monday, tracking a similar movement in the U.S. Treasuries after jobs report in the States for the month of December disappointed market sentiments, along with the weakest wage data in over a year. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 4 basis points to 1.213 percent, the yield on the long-term 30-year bond plunged 5 basis point to 1.825 percent and the yield on short-term 2-year suffered 2 basis points to 0.798 percent.
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