FX News Today
- Dovish-leaning Fed speakers and minutes yesterday continue to underpin Treasuries.
- Bonds got support from reduced risk appetite.
- FOMC minutes: can afford to be patient, with inflation low;downside risks may have increased, the timing of future rate hikes are less clear.
- Trade talks between the US and China may have ended on an optimistic note, but traders fear that it could drag on for a long while. Nikkei lost -1.29% and Yen strengthened.
- Talks in the US to end the partial government shutdown collapsed.
- USDJPY reversed to 107.80 low from 109.0; EURUSD surged to 1.1559 high
- Solid session for Canadian stocks, tracking the bullishness around the world.
- GoC yields moved modestly higher as BoC delivered the as-expected steady rate announcement while reiterating rates will need to go higher “over time.”
- USDCAD slipped to nearly the 1.3200 level.
- WTI crude rallied 5% to $52.5 bbl despite mild EIA crude draw and product builds.
Charts of the Day
Main Macro Events Today
- ECB Minutes – Expectations – The ECB’s account is likely to reflect growing unease and while there will have been broad support for the decision to phase out net asset purchases, it is expected that even the hawks were not pushing for further exit steps just yet.
- US Initial jobless claims – Expectations – Initial jobless claims are estimated to rise 5k to 236k in the week ended January 5, after climbing 10k to 231k in the week of December 29.
- Canadian Housing data – Expectations – Building permit values are projected to slip 0.5% in November, while the new Housing Price Index is anticipated to decline 0.1% in November after the flat readings the past 3 months.
- Federal Reserve Chair Jerome Powell speech at 17:00 GMT.
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