5 January, 2016
FX News Today
The dollar was mostly higher with a bit of a safe-haven money flowing into the USD as geopolitical tensions and a slowdown in China’s economic expansion on Monday, contributed to the 7% sell off in Asian stock markets at the start of the new year. The global stock market sell-off spill over into the European and the U.S. stock markets with U.S, markets preforming better than European equities. However, in overnight Tuesday trading, Chinese stocks traded back from session lows, after the Shanghai Comp tumbled over 3% at the open before reversing back into the green, as officials came in to inject cash into the banking system via a $20 bln open market reverse repo operation to ensure liquidity while also reportedly intervening to support the yuan.
Yesterday, The EURUSD fell to one-month lows near 1.0780 before buyers moved in to support prices; the USDJPY broke below the 118 handle before rallying to 119.70. Meanwhile, the GBP touched close to multi-month lows of 1.4660, and the USDCAD pulled back early on higher oil prices, however, the USDCAD rallied back over 1.3980 when crude Oil prices failed to retain gains.
Monday U.S. data was not uplifting, as both manufacturing ISM and construction spending both missed expectations. The U.S. calendar is thin today, featuring December auto sales and weekly chain store data. The Canadian calendar has industrial product price index for November while the European calendar has U.K. Construction PMI, Italy HICP, Spain unemployment.
Main Macro Events Today
EUR German Unemployment: Yesterday’s PMI readings confirmed that growth is broadening and the improvement is also helping the labor market across the Eurozone and analyst are looking for a fresh decline in German jobless numbers of 5K (median -8K), which should leave the December jobless rate steady at a very low 6.3%.
EUR Preliminary December Inflation: Preliminary December inflation numbers for Italy and the Eurozone. The Spanish reading last week came in higher than expected, while the German HICP, released yesterday, unexpectedly fell.
GBP PMI Construction: Analyst forecast a 56.0 reading up from the previous 55.3.
Nikkei gained 1.09% after a strong close on Wall Street and with the earnings season starting to overshadow lingering trade jitters at least for now. A weaker...
U.S. trade tariffs tightened market conditions. Coeure said that “while the effects of any tariffs on output and inflation may take time to materialise, falls...
China and Hong Kong alongside other markets were closed for Lunar New Year holidays, which muted trading, but the Nikkei gained 1.19%...
The U.S. currency has been correlating inversely with global stock market direction of late on the causation that risk-on phases have seen investors...
U.S. personal income rose 0.3% in November with spending up 0.6%. The 0.4% increase in October income was not revised. The 0.3% spending increase..
The FOMC meeting is front and center this week following the solid November jobs report on Friday, which provided the final bit of cover for...
Asian stock markets headed south again, as declines and energy and mining stocks led shares lower amid a further drop in metal prices. Concern China’s regulators may limit the flow...
The rout on Chinese bond and stock markets that dominated Thursday’s session faded and the Nikkei managed a 0.12% gain as the yen...
After a couple of panicky moments in global equities over the past week, the markets will keep a wary eye on political developments. In Washington...