Thursday 18th January: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei down 0.48%, Shanghai Composite up 0.45 %, Hang Seng lost 0.10 %, ASX flat
  • Commodities: Gold at $1329.10 (-0.75 %), Silver at $17.06 (-0.62 %), WTI Oil at $64.01 (+0.06 %), Brent Oil at $69.35 (-0.03 %)
  • Rates: US 10-year yield at 2.589, UK 10-year yield at 1.302, German 10-year yield at 0.568

News & Data:

  • (JPY) Revised Industrial Production m/m 0.5% vs 0.6% expected
  • (JPY) 30-y Bond Auction 0.83|3.8 vs 0.85|4.4 previous
  • (AUD) Unemployment Rate 5.5% vs 5.4% expected
  • (AUD) Employment Change 34.7K vs 13.2K expected
  • (AUD) HIA New Home Sales m/m 0.07% vs 1.6% previous
  • (GBP) RICS House Price Balance 8% vs -1% expected
  • (AUD) MI Inflation Expectations 3.7% vs 3.7% previous
  • (USD) TIC Long-Term Purchases 57.5B vs 50.1B expected
  • (USD) NAHB Housing Market Index 72 vs 73 expected
  • (CAD) Overnight Rate 1.25% vs 1.25% expected
  • South Korea is considering shutting down all virtual currency exchanges, regulator says
  • Trump says terminating NAFTA would yield the 'best deal' in renegotiations- RTRS

Markets Update:

The Momentum seen on Wall Street yesterday reflected in Asian equities in today’s session, with most of opening in the green. Although the question of how long the market bullishness will continue continues to berate investors, tailwinds from tax cuts and corporate earnings have been driving the markets. The dollar maintained overnight gains, with the yen and sterling softer. Crude oil is recovering earlier losses, with gold retreating.

PBoC injected net CNY 90B in open market operations, for the first time in 6 sessions. China reduced US treasury holdings in November, though SAFE reiterated investments are market driven. The regulator attributed recent yuan strength to an improving economy and weaker dollar. The regulator also reaffirmed that going forward two way volatility will be the norm, and that deeper FX reforms can be expected in the coming days.

Macro events set to dominate headlines in the region. Australia employment was stronger than expected, though jobless rate ticked higher and market impact was limited. The oddly mixed employment report led the Aussie Dollar to make a whipsaw – however, the currency is now in the area which in the past has prompted the RBoA to worry about the effects of excessive currency strength on its inflation targeting mandate. Bank of Korea left rates unchanged as expected. China house prices accelerated. The main event will be China GDP and activity data. Q4 GDP consensus forecast looks 6.7% y/y growth following 6.8% in Q3

Cryptocurrencies continue to generate massive intraday swings. Most major cryptocurrencies slid deeper into their retracements – with Bitcoin has passed its 50% retreat from its all-time high mark. The Euros bull run was cut short by last night’s remarks from ECB officials – however, the risk reversals gauge indicate a rising demand for EUR/USD calls, strengthening conviction that investors expect a quick recovery.

Upcoming Events:

  • 07:00 AM GMT – (CNY) GDP q/y
  • 07:00 AM GMT – (CNY) Fixed Asset Investment ytd/y
  • 07:00 AM GMT – (CNY) Industrial Production y/y
  • 07:00 AM GMT – (CNY) NBS Press Conference
  • 07:00 AM GMT – (CNY) Retail Sales y/y
  • 08:00 AM GMT – (EUR) German Buba President Weidmann Speaks
  • 01:30 PM GMT – (CAD) ADP Non-Farm Employment Change
  • 01:30 PM GMT – (USD) Building Permits
  • 01:30 PM GMT – (USD) Housing Starts
  • 01:30 PM GMT – (USD) Philly Fed Manufacturing Index
  • 01:30 PM GMT – (USD) Unemployment Claims
  • 03:30 PM GMT – (USD) Natural Gas Storage
  • 04:00 PM GMT – (USD) Crude Oil Inventories
  • 09:30 PM GMT – (NZD) Business NZ Manufacturing Index
  • &more…

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