Wednesday 17th January: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei down 0.43%, Shanghai Composite up 0.21 %, Hang Seng lost 0.40 %, ASX lost 0.54 %
  • Commodities: Gold at $1335.10 (-0.15 %), Silver at $17.16 (-0.17 %), WTI Oil at $63.67 (-0.11 %), Brent Oil at $69.08 (-0.10 %)
  • Rates: US 10-year yield at 2.559, UK 10-year yield at 1.303, German 10-year yield at 0.553

News & Data:

  • (NZD) ANZ Commodity Prices m/m -2.2% vs -0.9 % previous
  • (AUD) Home Loans m/m 2.1% vs -0.1% expected
  • (JPY) Core Machinery Orders m/m 5.7% vs -1.3% expected
  • (AUD) Westpac Consumer Sentiment 1.8% vs 3.6% previous
  • (GBP) CB Leading Index m/m -0.2% -vs -0.2 previous
  • (NZD) GDT Price Index 4.9% vs 2.2 % previous
  • (USD) Empire State Manufacturing Index 17.7 vs 18.5 expected
  • Oil prices slip as analysts warn of correction after 13 % gain in the past month- RTRS

Markets Update:

Asian markets tracked the weakness seen in Wall Street yesterday, not helped by the softer oil prices. The US Dollar index extended losses amid another move higher in global yields as markets continue to eye hawkish policy shifts at the ECB and BoJ. Dollar weakness, hence, remains a high profit theme. The euro has rebounded to a fresh three-year peak, while the yen is trading near overnight highs amid a curve flattening move in JGB yields.

Yen strength has gotten some of the blame for the Nikkei’s malaise, though the index remains not too far from multi-decade highs. A surprise jump in Japanese core machinery orders extended a string of positive macro data, and fir with the view of a strengthening economy supporting the case for a long overdue BoJ stimulus exit. However, JPY could be seen to be retracing some gains in today’s trading.

Chinese markets have been mixed in today’s trading. Hong Kong property developers are lagging after the country’s housing ministry shot down suggestions of a relaxation in real estate curbs. As the yuan hovers near a three-year high mainland press have downplayed the need for a regulatory response, noting the currency’s strength is largely a function of USD weakness.

Metal prices remain under pressure, contributing to the underperformance of ASX’s miners. The major banks are also underperforming amid another bear flattening in Aussie yields. The Kiwi dollar continued to fall, becoming the worst performing G10 FX currency for the day, after touching a four month high on Friday.

Elsewhere, Bitcoin has steadied following a plunge that saw it hurtle towards the USD 10000 level. Recent volatility has been chalked up to reports of a regulatory crackdown in China and South Korea.

Upcoming Events:

  • 10:00am GMT – (EUR) Final CPI y/y, Final Core CPI y/y
  • 11:45am GMT – (GBP) MPC Member Saunders Speaks
  • 2:15pm GMT – (USD) Capacity Utilization Rate, Industrial Production m/m
  • 3:00pm GMT – (CAD) BOC Monetary Policy Report, BOC Rate Statement, Overnight Rate
  • 3:00pm GMT – (USD) NAHB Housing Market Index
  • 4:15pm GMT – (CAD) BOC Press Conference
  • 7:00pm GMT – (USD) Beige Book
  • 9:00pm GMT – (USD) TIC Long-Term Purchases
  • 9:30pm GMT – (USD) FOMC Member Mester Speaks
  • &more…

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