Here are the latest developments in global markets:
- FOREX: The dollar index deviated below one-week highs reached earlier in the Asia session, edging down to 90.62 (+0.10%). Higher US Treasury yields and hopes on corporate tax repatriations contributed positively to the index’s performance earlier. Dollar/yen was flat at 111.24 (-0.03%) and dollar/swissie tumbled to 0.9592 (-0.64%). Euro/dollar stretched its uptrend to 1.2236 (+0.42%) and pound/dollar rose to 1.3874 (+0.36%), potentially due to the positive sentiment related to Brexit developments. Aussie/dollar rebounded to $0.7988 (+0.25%) on the back of the dollar’s weakness, while better-than-expected Australian jobs data also could have helped the pair.
- STOCKS: Encouraging Chinese growth data provided moderate support to the European stocks after they sent the Hong Kong’s Hang Seng index to record highs. The pan-European STOXX 600 opened higher but soon reversed earlier gains, trading flat at 1030 GMT (+0.06) due to losses in telecommunication services and utilities. The German Dax 30 jumped by 0.40% after Goldman Sachs upgraded the German chipmaker Infineon, while upbeat quarter sales stated by Carrefour sent the French CAC 40 higher. However, weakness in other sectors limited upside movements, with the index rising only by 0.17%. The British FTSE 100 fell by 0.38% as all index’s components were on the backfoot except energy shares. US stock futures were in the green, pointing to a positive open.
- COMMODITIES: Oil prices were steady around three-year highs as threats of an attack on the Nigerian petroleum industry – Africa’s largest oil exporter – weighed on the market. Particularly, the Militant group Niger Deltas Avengers warned of an attack on the Nigerian oil facilities in the next few days, hampering the region’s supplies. WTI crude was last seen at $63.95 per barrel and Brent stood at $69.34. Gold inched up by 0.18% to $1,330 per ounce.
Day ahead: US reports on Housing data; EIA oil inventories pending
US housing data for the month of December will come into light on Friday with the potential to shake the dollar after the currency hit a three-year low on Thursday. At 1330 GMT, building permits are expected to climb by 1.290 million in the aforementioned month following an increase towards a two-year high at 1.303 million in November. On the other hand, the number of housing starts released at the same time are said to inch down from 1.297 million to 1.275 million, remaining around ten-month high levels.
In other data out of the US, weekly initial jobless claims and the January’s Philadelphia Fed Manufacturing index due at 1330 GMT might show some weakness. According to forecasts, 250,000 people are expected to have applied for the first time for unemployment benefits in the week ending January 12 compared to 261,000 seen in the preceding week when the measure jumped to a three-month high. Regarding manufacturing business conditions in Philadelphia measured by the Federal Reserve of Philadelphia, the gauge is anticipated to fall by 2.9 points to +25.
In oil markets, investors will be waiting for the EIA weekly report, which tracks the change in US oil inventories, after yesterday’s API data showed an unexpectedly sharp fall in US crude oil inventory levels. Analysts project that crude oil stocks have fallen by 3.536 million barrels in the week ending January 12, less than the decline of 4.948 million barrels seen in the week before. The report will be published at 1600 GMT.
The markets will also keep their eyes on the US Congress, as lawmakers are expecting to vote on the government’s funding bill, which expires on Friday and has been extended three times so far, avoiding any potential government shutdown.
In Canada, the ADP employment report is to be released at 1330 GMT, but the results might bring moderate fluctuations to the loonie.
Public appearances scheduled for today involve a speech by the Cleveland Fed President Loretta Mester, who will comment on monetary policy at the Council for Economic Education’s Economist on the Economy at 2305 GMT. Earlier, ECB member, Benoit Coeure will be speaking at a conference in Frankfurt at 1430 GMT.