S&P500 At 5-Year High On Better-Than-Forecasted Earnings
The risk sentiment slumped in the Asian trading session as the Japanese shares extended losses on the stronger Yen. The Nikkei 225 slipped 2.08%, Hang Seng retreated 0.19%, Shanghai's Composite, Kospi and Taiex index retreated by 0.06%, 0.81% and 0.19% respectively. Yen gained against all of its major counterparts over the last 24 hours trading. USDJPY and EURJPY erased one-week gains based on positioning unwind.
Australia released the quarterly and yearly consumer prices better-than-the estimation. (CPI q/q 0.2% vs. 0.4% exp. & 1.4% previous, CPI y/y actual 2.2% vs. 2.4% exp. & 2.0% previous). In reaction, AUDUSD consolidated part of last week losses.
In US session, GBP came under pressure, as the BoE Governor King said that more stimulus is to come, adding that the monetary policy will no longer be central to secure a sustained recovery. GBPUSD slipped, hitting 1.5809 early in the session. The sterling is currently testing its lowest levels since August.
The US stock markets rallied amid better-than-expected earnings came in from Travelers Cos. and Freeport-McMoRan Copper & Gold Inc. Despite weak economic data release, (December Chicago Fed down to 0.02 from 0.10, Richmond Fed Manufacturing index down to -12, from exp.& previous 5, and monthly existing home sales -1.0 in December vs. exp 1.2% & previous 5.9%), S&P500 advanced 0.44%, while Dow Jones and Nasdaq's Composite index added 0.46% and 0.27% respectively. The S&P500 closed at 1,492.56, its highest level since December 2007.
EURUSD recovered yesterday's losses, as the rumors on BaFin's action to split large banks' activities and ECB's Weidmann's resignation were officially denied. Yet, the recovery remained fragile. EURUSD slipped under 1.3300 early in the session.
Today, the focus will be on Cameron's speech on UK's future in EU. The economic agenda consists of the UK December Jobless Claims change, UK November Unemployment rate (3 months), Credit Suisse ZEW Survey in Switzerland, US MBA Mortgage Applications, US November house Price Index, The Bank of Canada Rate, the Euro-Zone Consumer Confidence and the New Zealand December Business PMI. The Davos World Economic Forum is in the agenda until January 27th.