Here are the latest developments in global markets:
FOREX: The dollar stalled its downtrend near today’s 4 ½ -month lows versus the yen, last seen at 108.97 (-0.16%), and remained flat close to 3-year lows of 89.06 against a basket of currencies as traders continued to digest the comments made by the US Treasury Secretary who said that a weaker dollar is more attractive for trade purposes. Pound/dollar slipped to 1.4252 (+0.08%) during early European trading hours after breaking 1.4327 – a level it last saw before the Brexit referendum –, while euro/dollar erased earlier gains, falling back to 1.2400 (-0.05%). Aussie/dollar eased to 0.8042 and kiwi/dollar managed to pick up to 0.7391 following a deep fall towards 0.7324 attributed to worse than expected inflation readings. Dollar/loonie changed hands at 1.2323 (-0.20%).
STOCKS: The European stocks were mixed ahead of the ECB meeting. The pan-European STOXX 600 was flat and the blue-chip Euro STOXX 50 was up by 0.23% at 1100 GMT with telecommunication services being the best performers. The German DAX 30 was weaker by 0.12%, weighed by losses in industrials, while the French CAC 40 increased by 0.48% with all its sectors being in the green. The British FTSE 100 inched up by 0.11% affected mainly by changes in stock ratings.
COMMODITIES: Oil prices reached fresh 3-year tops during the European afternoon as a falling dollar, declining US oil stockpiles and OPEC-led supply cuts continued to underpin the market. WTI crude peaked at $66.44 per barrel before it fell back to $66.00 (+0.72%) and Brent hit a high at $71.20 before it edged down to $70.68 (+0.44%). Gold moved lower to $1359 (+0.04%) per ounce after reaching a 1 ½-year high at $1365.89.
Day ahead: ECB decides on monetary policy; Japanese inflation pending in Asia session
The ECB’s monetary policy meeting at 1245 GMT will be closely watched by investors during the European afternoon, with the potential to bring fresh volatility to the euro. ECB policymakers are widely expected to keep rates unchanged, though, the press conference following the decision at 1330 GMT could be of greater importance. Particularly, analysts will be eager to hear comments on the central bank’s quantitative easing program and any changes to its intention to reduce monetary stimulus. Any remarks on the strengthening euro are expected to attract attention as well.
In Canada, monthly retail sales due at 1330 GMT are said to lose speed in November, growing by 0.8% m/m compared to a rise of 1.5% in the previous month, while, excluding automobiles, the measure is forecasted to grow at October’s pace of 0.8%.
Meanwhile out of the US, initial jobless claims are seen slightly higher by 16,000 at 240,000 in the week ending January 19. New home sales will follow at 1500 GMT, with analysts forecasting a large decline of -7.9% m/m in December. Recall that in November the gauge posted the biggest expansion rate since 2013, jumping by 17.5% m/m.
Late in the day, Japan will report on inflation for the month of December at 2330 GMT, with the potential to extend or reverse the yen’s recent rally if the results deviate far from the forecasts. According to Reuters, the core CPI which is closely watched by the BoJ is projected to remain flat at 0.9% y/y, while based on other sources, the headline inflation rate might nearly double to 1.1% y/y from 0.6% in November.
In stock markets, Caterpillar, 3M Company and Union Pacific Corporation are among companies to report on quarterly earnings prior to the US market open.
, and remained flat close to 3-year lows of 89.06 against a basket of currencies as traders continued to digest the comments made by the US Treasury Secretary who said that a weaker dollar is more attractive for trade purposes. Pound/dollar slipped to 1.4252 (+0.08%) during early European trading hours after breaking 1.4327 – a level it last saw before the Brexit referendum –, while euro/dollar erased earlier gains, falling back to 1.2400 (-0.05%). ){kind=link}