US Treasury Secretary nominee Mnuchin provided USD bears with a boost late in the NY session. Comments on Bloomberg included `EXCESSIVELY STRONG' USD MAY BE NEGATIVE IN SHORT TERM & WILL ADDRESS ISSUE OF CURRENCY MANIPULATION. On the back of recent concerns surrounding the strong dollar policy and the Trump administration's desire to see it come to an end, Mnuchin's comments were seen adding fuel to the fire. After the initial hit to the USD following Mnuchin's comments currencies moved into their Asian morning retracement/holding pattern. With little data for traders to focus on they will continue to hang on President Trump's every word for clues as to major policy decisions. The Aussie received a boost in early afternoon trading with Dalian FE futures up +6% at one stage with the Aussie breaking to a new high of $0.7609 before sellers push it back below the figure. Gold remains bid in line with general USD weakness fears and was last at $1217.20 with the $1221.5-1248.9 resistance region currently key. NYMEX WTI (H17) continues to hesitate ahead of the 21-DMA ($53.60) and was last at $53.02.
Tuesday throws up a buy day, with plenty of data and additional risk even available on both sides of the Atlantic. The European data calendar gets underway at 08:00 GMT, with the publication of the French flash January manufacturing and services PMI data. The German data will be released at 08:30 GMT, with the euro area amalgamated data set for publication at 09:00 GMT. At 09:30 GMT, the UK public sector finances will be released. Public sector net borrowing (PSNB) was down stg0.6bn on the year in November to stg12.6bn, owed to a 3.6% rise in central government receipts. CG receipts were up stg1.7bn in November, driven by growth in national insurance contributions receipts, and offset a stg1.3bn rise in CG spending. PSNB-ex amounted to stg49.5bn between April and November, down 11.5% from stg67.1bn in the same period a year ago. Analysts have penciled in PSNBex to come in at stg6.8bn in December. At the same time, the UK Supreme Court will finally rule on the Government's appeal against the High Court's ruling that Parliamentary approval will be needed before Article 50 of the Lisbon Treaty can be triggered, thus starting the process of leaving the EU. The UKSC said it will hand down its judgement on the ruling in the case of Regina (on the application of Miller & Dos Santos) v Secretary of State for Exiting the European Union on Tuesday January 24 at 09:30 GMT. The UK Supreme Court ended a four-day appeal hearing from the Government on December 8, with Lord Neuberger, President of the Court, saying the court was not looking to "overturn the result of the EU referendum".
Across the Atlantic, the US calendar kicks off at 13:30 GMT, with the release of the Philadelphia Fed Nonmanufacturing Index at 13:30 GMT. ECB Executive Board member Peter Praet participates in panel at International Conference "Europe 2017: Make it or break it?", in Rome, starting at 13:45 GMT. Back in the US, the data calendar continues at 13:55 GMT, with the release of the latest Redbook, with the flash January Market Manufacturing Index. There is a slew of US data expected at 15:00 GMT, including the NAR existing home sales data, the Richmond Fed survey and the BLS state employment numbers. The pace of existing home sales is expected to slow to a 5.50 million annual rate in December after a further increase in November to another post-recession high. Supply fell sharply in November, pulling down the months’ supply and allowing the median home price to shift higher. New home building will be necessary to support new home sales, and thus existing home sales, the NAR repeated last month. ECB Executive Board member Sabine Lautenschlaeger speaks in Hamburg, Germany, starting at 18:00 GMT. Late US data will see the publication of the preliminary Treasury Allotments at 20:00 GMT.
The pair continues to find support on dips back towards $1.0553-79 with bulls focused on $1.0828-73 where the 100-DMA is located. O/B daily studies remain the key concern for bulls. Initial support is noted at $1.0705 with bears needing a close below to ease bullish pressure. Overall a close below $1.0553 remains needed to end bullish hopes and shift focus back to $1.0453.
Spot Gold last down $1.60 at $1,216.50 per ounce, in a $1,220.25 to $1,216.20 range so far this morning in Asia, with the market drifting slightly lower as the US Dollar recovers from its late NY losses. Late in Monday's session the US Dollar fell to fresh recent lows on comments from new Treasury Secretary Mnuchin on Bloomberg, who said that the USD is excessively strong in the short-term. Monday saw spot Gold closing near $1,217.75 per ounce, after trading in a $1,209.40 to $1.219.55 range. The earlier high was the highest level since Nov 22, when the precious metal topped out at $1,221.16.
EM2017056 powerd by MINI Fixed Income and FX Bullet Points Publisted 24/01/2017
With little data to drive markets today the key driver has been uncertainty surrounding the substance of Trump's policies. The US Dollar was placed on the back foot as President Trump's inauguration was taking place o/n Friday and that theme has continued into Asia to start the new week with the uncertainty surrounding Trump seeing the USD weaken. The US Dollar-Index (DXY) opened at 100.760 and remains heavy, last at 100.310 amid a 100.290-760 range. The Nikkei has remained in negative territory in Asia today which was seen weighing on dollar-yen. The Nikkei was last down 1.06% at 18935.57 having traded 18880-18975 so far. US Treasury yields have taken a hit and were last at 2.430 compared to Friday's close at 2.467. The soft USD theme today has seen dollar-yen trade down to a low so far of Y113.44 amid a Y113.44-114.42 range and the euro-dollar remains bid, having traded up to a high of $1.0750 amid a $1.0691-1.0750 range. Comments from President Trump are likely to be key drivers going forward.
Monday's data calendar sees plenty of euro area releases, but is very light on US input. The calendar gets underway at 08:00 GMT, with the publication of the Spanish services survey and the industrial orders data. At 09:00 GMT, Italian industrial orders will be released, with Italian retail sales set to cross the wires at 10:00 GMT. Also at 10:00 GMT, Eurostat will publish the latest EMU government debt and deficit data.
1000/1100 EU government debt ECB Executive Board member Peter Praet will deliver a speech at the "European Pillar of Social Rights Conference", organized by European Commission, in Brussels, starting at 13:45 GMT. Across the Atlantic, the calendar kicks off at 13:30 GMT, with the publication of the Canadian Wholesale Trade data. Back of the Continent, at 14:40 GMT, the ECB will call for bids on the latest 7-day MRO, before publishing the PSPP bond-buying data at 14:50 GMT. The European Commission will publish the latest euro area and EU consumer confidence.
Hesitation ahead of the 21-DMA last week has taken its toll with the pair now trading back below the 55-DMA (¥114.04) and looking a little heavy. The break back below ¥113.70 sees bearish focus return to last week’s low and then ¥111.35-61 where the daily bear channel base is noted. Bulls now need to see a close above ¥114.42 to see pressure return to ¥115.10-63 where the bear channel top and 21-DMA are seen.
WTI crude Oil futures for Mar'17 delivery is last up 0.09$ at $53.31 per barrel, after a $53.47 to $53.16 range in Asia today, with the market trading quietly as markets await Trump's first acts of legislation. Over the weekend, Saudi Arabia's oil minister said the OPEC production cuts were going as planned. Friday saw NYMEX February light sweet crude oil futures settled up $1.05 at $52.42 per barrel, after trading $51.39 to $52.90. The Feb contract settled Friday and most players were already trading March, which closed up $1.10 at $53.22 per barrel, in the middle of a $52.13 to $53.67 range. So far in 2017, the front contract has traded in a range of $50.71, seen Jan. 10, to $55.24, seen Jan. 3. Baker Hughes rig count, released Friday, showed a 29-rig increase to 551 rigs for U.S. "oil-only" rigs in the week ending Jan. 20. This compared to 510 rigs a year ago. Current rigs were down 65.8% from the peak rig count of 1,609 rigs seen Oct. 10, 2014.
EM2017055 powerd by MINI Fixed Income and FX Bullet Points Publisted 23/01/2017
Following the rally in the USD that received support from Fed Chair Yellen's comments early Thursday, the USD is remains gently offered with traders remaining nervous ahead of Trump's inauguration. US !0yr yields have drifted a little lower from the open and were last at 2.454 and on the lows for the day which isn't helping the USD. The DXY is also looking a little heavy and last at 100.890 after opening at 101.170. The usual Asian morning retracement was noted as traders squared some positions and others looked to take advantage of better levels. Fed Chair Yellen's comments were likely to have been a factor in the USD regaining an offered tone as markets may not have liked references to adjusting monetary policy gradually and unsustainable deficits on the horizon. Japan Finance Minister Also was noted commenting on the undesirability of rapid currency fluctuations but the comments were not market moving. The Nikkei has been relatively subdued having traded a 19040-19148 range and last at 19091.84.
Friday throws up a muted data calendar, but the main feature of the day comes late in the European afternoon, with the inauguration of the new President in the US. The European calendar gets underway at 07:00 GMT, with the publication of the German December PPI data. At 09:00 GMT, the ECB Survey of Professional Forecasters will be published. The UK December retail sales data will be published at 09:30 GMT. Retails sales will almost certainly exert a positive influence on fourth quarter GDP when data for the month of December 2016 is published. Accounting for 5.6% of UK GDP, retail sales would have to fall by an unprecedented 6.9% mom for Q4 sales volumes to be unchanged from that of Q3. Analysts expect sales, including automotive fuel, to have contracted between November and December, pencilling in growth of -0.4% mom. Excluding fuel, they also saw sales volumes down by 0.4% in December. On the year, however, they forecast sales volumes to be up 6.6% on the year in December and that of sales excluding fuel to be up 7.5% yoy. In November, sales volumes were hampered by reduced fuel purchases with consumers put off hitting the pumps due to higher prices. The implied deflator for automotive fuel increased by an annual rate of 7.1% in November, the third consecutive increase, ending a run of negative outturns stretching back as far as late 2013.
As such, fuel sales were down 2.2% between November and December and up just 0.4% on the year. To put this into perspective, fuel sales volumes have been expanding at an average rate of 7.1% yoy each month in 2016. Consumer spending has in part been propped up by double digit growth in consumer credit, with repayment rates at historic lows. Across the Atlantic, the calendar gets underway with the release of the Canadian CPI and retail trade data. At 14:00 GMT, Philadelphia Federal Reserve Bank President Harker discusses the economic outlook at New Jersey Bankers Association 6th Annual NJ Economic Leadership Forum in Somerset, N.J., with media Q&A The NY Fed GDP Nowcast is set for 16:15 GMT. The main event of the day comes at 17:00 GMT, when Donald J Trump IS inaugurated as 45th President of USA. He will give his first speech as President straight after. At 18:00 GMT, San Francisco Federal Reserve Bank President John C. Williams gives the closing remarks at the Bay Area Council 10th Annual Economic Forecast in San Francisco Calif., with audience Q&A.
EM2017054 powerd by MINI Fixed Income and FX Bullet Points Publisted 20/01/2017
It was a hectic start to the new trading week in the Asia-Pacific region, with Sterling the main focus. Over the weekend, UK press reported that PM May will announce in her speech tomorrow, a clean break with the EU, including regaining full control over immigration, sovereignty from European Court of Justice decision-making and readiness to exit the customs union. The pound collapsed against the dollar, gapping lower at $1.2085 from a $1.2175 close in New York Friday, the rate extended the drop to $1.1983 before consolidating with a $1.2016-$1.2055 range and was last at $1.2030.
Hard-Brexit fears saw broad-based yen strength, dollar-yen opened at Y114.66 and headed south from the get go, initially basing at Y114.10 the move extended to Y113.98 before recovering mildly and was last at Y114.17. Euro-dollar opened at $1.0617 and traded in a $1.0593 to $1.0636 range, partially filling the gap from the New York close on Friday at $1.0643.
Monday throws up a fairly slow start to what will be a heavy risk event week for the financial markets, as we await UK PM Theresa May's speech outlining her Brexit vision, the ECB policy meeting and the inauguration of US President Donald Trump.US markets are closed to observe the Martin Luther King holiday. The European calendar gets underway at 09:00 GMT, with the release of the final Italian December HICP. At 10:00 GMT, the latest EU trade data will cross the wire. Across the Atlantic, the Canadian CREA home sales data will be released.
The ECB will call for bids on the latest 7-day MRO at 14:40 GMT, before announcing the latest PSPP bond-buying data at 14:50 GMT. At 16:00 GMT, ECB Executive Board member Peter Praet participates in the conference organized by Bank of France, in Paris. At 18:30 GMT, BOE Governor Mark Carney will deliver a keynote speech at the London School of Economics, in London.
Hesitation ahead of the key $1.0695 resistance continues and with daily studies approaching O/B and recent topside follow through lacking this is a concern for bulls. Bulls need a close above $1.0695 to end bearish hopes and shift immediate bullish focus to $1.0833-1.0952. Bears continue to look for a close below $1.0553 to shift initial focus back to $1.0453.
crude Oil futures for Feb'17 delivery last up $0.14 at $52.51 per barrel, after a $52.63 to $52.39 range in Asia today, with the market trading quietly ahead of the Martin Luther King holiday in the US on Monday. Friday saw NYMEX February light sweet crude oil futures settle down $0.64 at $52.37 per barrel, after trading in a $52.27 to $53.17 range.
EM2017052 powerd by MINI Fixed Income and FX Bullet Points Publisted 16/01/2017