News

America's Roundup: Dollar gains as euro falls, but outlook stays weak, Wall Street stocks climb, Gold dips, Oil prices rise over 2 pct on trade talk optimism-January 9th,2019

Market Roundup

• Trump renews dig at Fed, expresses longing for lower interest rates.

• U.S.-China trade talks to continue for third day -U.S. officials.

• Trump to highlight border 'crisis,' seek wall support in televised address.

• Dollar rallies at euro's expense, but outlook still bleak.

• UK PM May defeated in parliament, lawmakers create new obstacle to no-deal Brexit.

• ECB rate hike now unlikely before mid-2020, money markets bet.

• US Nov JOLTS Job Openings, 6.888 mln, 7.063 mln forecast, 7.079 mln previous, 7.131 mln revised.

• US 5 Jan, w/e Redbook YY, 8.9%, 9.3% previous.

• US 5 Jan, w/e Redbook MM, 0.8%, 0.6% previous.

• CA Nov Trade Balance C$, -2.06 bln, -1.95 bln forecast, -1.17 bln previous, -0.85 bln revised.

• Goldman Sachs analysts slash U.S. Treasury yield forecasts.

• Oil prices rise more than 2 pct on trade talks.

Looking Ahead – Economic Data (GMT)

• 8 Jan 21:30 Australia Dec AIG Services Index, 55.1 previous.

• 9 Jan 00:30 Australia Nov Building Approvals, -0.5% forecast, -1.5% previous.

Looking Ahead – Events, Other Releases (GMT)

• 08:30 Swedish Central Bank minutes from the monetary policy will be published in Stockholm

• 14:00 Chicago Fed's Evans speaks on current economic conditions and monetary policy at a meeting in Riverwoods, Illinois

• 13:20 Atlanta Fed's Bostic speaks before the Chattanooga Chamber of Commerce in Chattanooga, Tennessee

• 15:00 Bank of Canada key policy interest rate announcement and monetary policy report in Ottawa

• 15:30 BoE Governor Carney participates in a live online Q&A session in London

• 16:30 Boston Fed's Rosengren speaks before the Boston Economic Club in Boston

• 19:00 Federal Open Market Committee will release the minutes from its December 18-19, 2018 policy meeting in Washington D.C.

• 16:15 Bank of Canada's Poloz and Wilkins hold a press conference on the monetary policy report in Ottawa

Currency Summaries

EUR/USD: The euro dipped against the U.S. dollar on Tuesday, as single currency was weighed down by downbeat German industrial output and stronger greenback across the board. German industrial output unexpectedly fell in November for the third consecutive month, adding to signs that companies in Europe's largest economy are shifting into a lower gear due to mounting risks from abroad. The euro fell 0.3 percent to $1.1441. It has traded in a tight range of $1.12 to $1.15 since mid-November. Immediate resistance can be seen at 1.1485 (61.8% retracement level), an upside break can trigger rise towards 1.1500 (Higher Bollinger Band).On the downside, immediate support is seen at 1.1412 (9 DMA), a break below could take the pair towards 1.1351 (23.6% retracement level).

GBP/USD: Sterling dropped half a percent against dollar on Tuesday, as sellers stepped as Britain's parliament prepared for a debate on Prime Minister Theresa May's Brexit withdrawal agreement.The pound initially rose as high as $1.2797 on Tuesday before edging down to $1.2715, half a percent lower on the day. Against the euro, the pound was barely changed at 89.875 pence per euro. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.2808 (Higher Bollinger Band), an upside break can trigger rise towards 1.2893 (100 DMA).On the downside, immediate support is seen at 1.2683 (9 DMA), a break below could take the pair towards 1.2645 (21 DMA).

USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Tuesday, as higher oil prices offset data showing a wider trade deficit. Canada's trade deficit widened in November to C$2.06 billion, pressured by a 2.9 percent drop in exports as crude oil exports declined, Statistics Canada said. Analysts had forecast a deficit of C$1.95 billion. The Canadian dollar was last trading 0.16 percent higher at 1.3275 to the greenback. Immediate resistance can be seen at 1.3331 (50% retracement level), an upside break can trigger rise towards 1.3393 (61.8% retracement level).On the downside, immediate support is seen at 1.3231 (38.2% retracement level), a break below could take the pair towards 1.3172 (100 DMA).

USD/JPY: The dollar gained against the Japanese yen on Tuesday, as risk appetite improved on bets China and the United States may be closing on a trade deal. U.S. officials are meeting their counterparts in Beijing this week for the first face-to-face talks since U.S. President Donald Trump and Chinese President Xi Jinping agreed in December to a 90-day truce in a trade war that has roiled global markets. The dollar was last trading 0.08 percent higher versus the Japanese yen at 108.79. Strong resistance can be seen at 109.42 (9 DMA), an upside break can trigger rise towards 111.20 (21 DMA).On the downside, immediate support is seen at 108.48 (50% retracement level), a break below could take the pair towards 108.00 (Psychological level). 

Equities Recap

European shares touched a three-week high on Tuesday as hopes of a possible trade deal between China and the United States offset worries over global growth.

UK's benchmark FTSE 100 closed up by 1 percent, the pan-European FTSEurofirst 300 ended the day down by 1.08 percent, Germany's Dax ended up by 0.8 percent, France’s CAC finished the day up by 1.4vpercent.

The S&P 500 jumped to a three-week high on Tuesday, led by Apple, Amazon, Facebook and industrial shares on bets that the United States and China would strike a deal to end their trade war.

Dow Jones closed up by 1.08 percent, S&P 500 ended up by 0.97 percent, Nasdaq finished the day up by 1.07 percent.

Treasuries Recap

U.S. Treasury yields rose for a third day on Tuesday, in line with higher U.S. stocks, as optimism over a trade deal between the United States and China boosted risk appetite.

Benchmark 10-year notes fell 9/32 in price on Tuesday to yield 2.712 percent, up from 2.682 percent on Monday. The yields fell as low as 2.543 percent in overnight trading on Thursday before the jobs report, which was the lowest since January 2018.

Commodities Recap

Gold slipped on Tuesday as the dollar rose and prospects of a U.S.-China trade deal increased investors’ appetite for riskier assets such as stocks, while palladium notched a fresh all-time high on tight supply.

Spot gold was down 0.3 percent at $1,285.30 per ounce as of (2140 GMT).U.S. gold futures settled down 0.3 percent at $1,285.90 per ounce.

Oil prices rose more than 2 percent on Tuesday, supported by hopes that crude demand may rise more quickly if talks between U.S. and Chinese officials resolve the trade dispute between the world's two biggest economies.

U.S. West Texas Intermediate (WTI) crude oil futures settled up $1.26, or 2.6 percent, at $49.78 a barrel. During the session, the contract touched $49.95, the highest since Dec. 17.Brent crude futures rose $1.39 a barrel, or 2.4 percent, to $58.72.
 


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