Wednesday 13th January: European Open Briefing

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Wednesday 13th January: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei up 2.70 %, Shanghai Composite fell 0.05 %, Hang Seng rallied 2.30 %, ASX 200 gained 1.35 %
  • Commodities: Gold at $1083 (-0.13 %), Silver at $13.80 (+0.30 %), WTI Oil at $30.95 (+1.70 %), Brent Oil at $31.35 (-0.20 %)
  • Rates: US 10 year yield at 2.14, UK 10 year yield at 1.75, German 10 year yield at 0.55

News & Data:

  • China USD Trade Balance (Dec): USD 60.09 Bln (exp USD 51.30 Bln prev USD 54.10 Bln)
  • China USD Exports (YoY) Dec: -1.4% (exp -8.0% prev -6.8%)
  • China USD Imports (YoY) Dec: -7.6% (exp -11.0% prev -8.7%)
  • China CNY Trade Balance (Dec): CNY 382.05 Bln (exp CNY 338.80 Bln prev CNY 343.10 Bln)
  • China CNY Exports (YoY) Dec: 2.3% (exp -4.1% prev -3.7%)
  • China CNY Imports (YoY) Dec: -4.0% (exp -7.9% prev -5.6%)
  • Japan Money Stock M2 (YoY) Dec: 3.0% (exp 3.3% prev 3.3%)
  • Australia Job Vacancies (QoQ) Nov: 3.5% (prev 2.7%)
  • PBoC Fixes Yuan Reference Rate At 6.5630 (prev 6.5628)
  • Yuan Overnight Interbank Rate In Hong Kong Drops To 8.31%
  • Oil's slide below $30 sends shockwaves far and wide-  RTRS
  • Asia stocks cheered by China trade surprise – RTRS

Markets Update:

Risk appetite improved after better than expected Chinese trade data. The December trade balance in USD stood at $60 billion vs $53 billion expected. This led to a rally in most of the Asian stock markets, with the Hang Seng gaining more than 2 % on the day. The Nikkei and ASX followed it higher, with only the Shanghai Composite lagging behind a bit.

In FX, the Aussie and Kiwi Dollar benefited from the improved sentiment, while the Japanese Yen fell against most currencies. AUD/USD rallied from 0.6975 at the Sydney open to a high of 0.7050. Resistance is now seen at 0.7075/80. NZD/USD rose from 0.6530 to 0.6590 and momentum faded just ahead of the key 0.66 resistance level. A clear break above would then pave the way for 0.6675 and eventually 0.6725.

USD/CAD continues to post fresh multi-year highs on a daily basis, as oil prices remain under pressure. WTI fell below $30 yesterday, the first time since 2003. It has recovered slightly since then, which led to a decline to 1.4215 in USD/CAD. Intraday support is seen at 1.4180 and then 1.4070.

Upcoming Events:

  • 07:45 GMT – French CPI
  • 10:00 GMT – Euro Zone Industrial Production
  • 13:00 GMT – FOMC Member Rosengren speaks
  • 19:00 GMT – US Beige Book
  • 19:00 GMT – US Federal Budget Balance

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