Market Brief G10 Advancers and Decliners vs USD CAD 0.68 AUD 0.68 NOK 0.35 GBP 0.24 NZD 0.19 SEK -0.07 CHF -0.16 DKK -0.21 EUR -0.22 JPY -0.53
Global Indexes
Current Level % Change Nikkei 225 Index 17048.37 0.55 Hang Seng Index 19564.97 1.7 Shanghai Composite 3007.739 3.22 FTSE futures 5810.5 1.44 DAX futures 9731.5 2.18 SMI Futures 8141 1.7 S&P 500 future 1899.9 1.33
Global Indexes Current Level % Change
Gold 1089.18 0.03 Silver14.03 0.56 CBOE Volatility Index 27.02 12.82 Crude wti 29.64 0.75 US Dollar Index 99.24 0.29
Financial markets have stabilised amid “reassuring” economic data from China. In December, industrial production slid to 5.9%y/y versus 6.0% consensus, down from 6.2% in the previous month. Retail sales also missed estimates and rose 11.1%y/y, below median forecast of 11.3% and a previous reading of 11.2%. During the December quarter, the Chinese economy grew at the slowest pace since the financial crisis. GDP rose 6.8% in the fourth quarter compared to a year earlier, below consensus and a previous reading of 6.9%. Finally, the economy expanded 6.9%y/y in full-year 2015, roughly in line with Beijing’s target. The big question now is determining which part of the data is actually accurate.
Fading risk-off sentiment and consolidating crude oil prices also helped financial markets to take a breather. Asian regional equity markets are blinking green across the screen with mainland Chinese stocks leading the charge. The Shanghai and Shenzhen Composites are both up more than 3% (3.22% and 3.57% respectively). In Japan, the Nikkei rose 0.55%, while the broader TOPIX edged up 0.18%. Hong Kong’s Hang Seng soared 2.95%, while in Singapore the STI was up 1.30%. The recovery in commodity prices - copper is up 2.70%, iron ore +2%, Brent +2.56% and WTI 0.75% - pushed Australian mining stocks higher. Regis Resources was up 7.10%, Evolution Mining Ltd (AX:EVN) jumped 6.05%, while Bluescope Steel Ltd (AX:BSL) climbed 5.68%. The S&P/ASX 200 was up 0.91%, while in New Zealand equities were up 0.37%. In Europe, futures are also wearing green with the Euro Stoxx 50 up 2.08%, the Footsie +1.44% and the DAX +2.18%.
In the FX market, commodity currencies took the lead with the loonie surging 0.68% against the greenback. USD/CAD eased to 1.4460, after hitting 1.4584 in New York yesterday, pausing after a mad run of roughly +6% which took the pair from 1.38 to 1.46. A period a stabilisation looks likely and would allow investors to take a breather while reassessing the situation. AUD/USD also gained 0.68% against the US dollar as it erased yesterday’s losses. The Aussie is back above $0.69 and currently testing the hourly resistance standing at around $0.6930. The Kiwi is also consolidating as it failed to break the strong support lying at around 0.64-0.6430 (low from November 18th and Fibo 61.8% on 2009-2014 rally). NZD/USD climbed 0.19% in Wellington and is now trading around 0.6470.
Today traders will be watching producer and import prices from Switzerland; current account balance from Italy; CPI, RPI, PPI and Marc Carney’s speech from the UK; CPI from the euro zone; ZEW survey from Germany; CPI from New Zealand.
Currency Tech
EUR/USD
R 2: 1.1387
R 1: 1.1095
CURRENT: 1.0874
S 1: 1.0458
S 2: 1.0000
GBP/USD
R 2: 1.5242
R 1: 1.4969
CURRENT: 1.4312
S 1: 1.4231
S 2: 1.3657
USD/JPY
R 2: 125.86
R 1: 123.76
CURRENT: 117.93
S 1: 115.57
S 2: 105.23
USD/CHF
R 2: 1.0676
R 1: 1.0328
CURRENT: 1.0067
S 1: 0.9786
S 2: 0.9476