FX News Today
- USDJPY retested 109.00 but has so far left yesterday’s one-week peak at 109.08 untroubled. Yen crosses have remained buoyant amid a backdrop of firm global equity markets.
- EURJPY and AUDJPY, meanwhile, have posted fresh one-week and 11-day highs, respectively.
- Topix and Nikkei are both up 1.1%, the Hang Seng rallied 2.4%, the CSI 300 1.68% and the ASX 0.98%.
- Hopes for a breakthrough in the US-China trade standoff continue to run high. Both sides agreed to extend talks into an unscheduled third day amid reports of progress on the issues of Chinese imports of US goods and increased access to Chinese markets, and Bloomberg cited sources reporting that President Trump, who tweeted that “talks are going very well,” is now eager to strike a deal.
- The MSCI Asia-Pacific (ex-Japan) Index has gained over 1.5%, reaching a 26-day high. The S&P 500 closed on Wall Street yesterday with a 0.97% gain, and S&P 500 futures are showing a 0.4% advance in overnight trading.
- After the soothing words from Powell last week markets will get the Fed minutes to digest today, but for now the mood in stocks is perky, with short coverings on the riskier assets underpinning the move higher and Hang Seng and mainland China bourses, which underperformed yesterday, outperformed today.
Charts of the Day
Main Macro Events Today
- Swiss CPI – Swiss inflation is expected to come out slightly lower than last month on a y/y basis, standing at 0.8% in December, compared to 0.9% in November.
- EU Unemployment Rate – The Euro Area unemployment rate is expected to have been 8.1% in November, the same as in October.
- BoC Interest Rate Decision – No change is expected in the BoC meeting despite the US rate hike in December, given the not-so-great data releases in December and early January.
- FOMC Minutes – Fed minutes are expected to shed more light on the policymakers’ mindset, especially regarding their thoughts on the US macroeconomic outlook.
Support and Resistance
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Dr Nektarios Michail
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