Amid thin trading volumes, most Asian equities crept higher earlier today. Japan equities fell, triggered by a stronger yen. The US dollar weakened for a second straight day, as gold and oil registered gains.
- US President Barack Obama has retaliated against Russia for cyberattacks aimed at interfering with the 2016 presidential campaign, imposing sanctions on top Russian intelligence officials and agencies, expelling them from the US.
- Meanwhile, President-elect Donald Trump signalled a possible shift from his previous dismissals of Russian involvement in the hack, saying in a brief statement that it’s time to “move on” and that he will meet with intelligence officials next week.
- Wholesale inventories last month climbed 0.9% month-on-month, exceeding the 0.2% rise expected.
- Initial jobless claims last week matched estimates, falling to 265,000 from 275,000 the previous week.
- The US dollar weakened the most in two weeks, with the Bloomberg Spot Dollar Index slipping 0.5% in New York, and a further 0.7% in Asia trade this morning.
- The S&P 500 Index was little changed, after briefly erasing losses after the US announced sanctions against Russia over election hacks. Trading was almost 40% below the 30-day average. Both the Dow Jones Industrial Average and Nasdaq Composite indices ended 0.1% lower.
- The yield on 10yr Treasury notes extended its recent slide, falling 3bps to 2.48%.
- The weighting of the US dollar will fall to 22.4% from 26.4% in the basket from 1st Jan, according to a statement by China Foreign Exchange Trade System. A further 11 currencies will be added to the basket, as officials seek to project an image of stability in the yuan.
- China’s onshore property bonds may be the riskiest part of the nation’s debt market in 2017 as the government strengthens curbs on the real estate market, according to a recent survey of analysts and traders.
- Spot gold gained by as much as 1.4% to $1,163.34/Oz late last night, as the precious metal looks set to register its biggest weekly gain in almost 7 months.
- If gold is able to hold above its previous resistance of $1,150/Oz, a future move up to the next resistance of $1,180/Oz is likely.
- The key support level below comes in at $1,125/Oz.
- Spot silver advanced as well, rising 0.8% to $16.2775/Oz, as the metal neared a 2 week-high.
- Crude oil for February delivery closed 0.5% lower at $53.77/bbl, but looks set to register its first annual gain in 3 years, before supply cuts from OPEC and other producing nations next month kick in.
- Stockpiles in the US unexpectedly climbed 614,000 last week, the smallest gain since January, although analysts were forecasting a decline of 1.5 million barrels.
- Spot 1.4450
- USDSGD extended its previous session’s drop, falling a further 0.4% to 1.4436 earlier today amid a selloff Treasury yields which triggered the weakening of the US dollar.
- The Singapore dollar has fallen more than 2% against the greenback in 2016 and looks set for a fourth yearly drop, which would be its longest run of declines based on Bloomberg data going back to 1981.
- Further support can be found below at the 1.4400 and 1.4150 levels.
- Spot 0.7239
- AUDUSD gained 0.4% to 0.7246, the highest level in more than a week, driven by broad-based US dollar weakness in Asia this morning.
- The 0.7150 support continues to be key, whilst significant resistance is expected to come in around the 0.7330 region.
- Spot 1.3475
- USDCAD continued its recent retreat from a 10 month-high, sliding below the 1.3500 handle overnight. The currency pair was 0.3% lower at 1.3461
- The key resistance at 1.3600 remains after a slew of poorer-than-expected economic data over the past 2 weeks, including manufacturing sales, GDP and CPI, coupled with the recent Fed interest-rate hike, propelled the currency pair 3.8% higher from the 1.3100 handle.
- Spot 6.9844
- The PBOC strengthened its fixing today, by 0.18% from 6.9497 to 6.9370 per US dollar.
- USDCNH retreated by as much as 0.2% to 6.9604 earlier in the session.
- The psychological resistance of 7.0000 remains the key level to watch.
- Spot 116.44
- USDJPY is currently being supported around the key 116.00 handle, following its previous session’s 1.1% decline to a 2 week-low.
- Spot 1.2276
- GBPUSD added 0.3% to the 1.2300 handle earlier today, after rebounding off the 1.2200 support yesterday.
- Recent US dollar weakness has buoyed the currency pair, although gains have been muted as Brexit concerns continue to weigh on the pound.
- The next support below comes in at 1.2090.