• Fed's Rosengren (non-voter): calls for gradual, but faster, rate hikes; warns of inflation risks.
• Fed’s Rosengren: would be good news if econ improves to where appropriate to reduce Fed’s balance sheet.
• Fed’s Lockhart: Balance of risks to upside given possibility of shift in fiscal policy under new admin.
• Germany’s Merkel: no 'cherry picking' for Britain in Brexit talks.
• Bund yields rise to 3-wk high on strong data, hawkish Fed; Upbeat German data, U.S. payrolls weigh on bond sentiment.
• GBP falls after PM May reignites hard Brexit fears, not interested in Britain keeping bits of EU membership.
• Oil down 3.8% on concerns over rising Iraqi exports, U.S. output.
• Gold rises as markets gear up for Trump administration, Palladium hits highest in more than a month.
Looking Ahead – Economic Data (GMT)
• –:– China PPI YY* Dec forecast 4.5%, 3.3%-previous
• –:– China CPI YY* Dec forecast 2.3%, 2.3%- previous
• –:– China CPI MM* Dec forecast 0.3%, 0.1%- previous
• 00:30 Australia Ret Sales MM* Nov forecast 0.4%, 0.5%- previous
• 05:00 Japan Cons Confidence. Index* Dec 40.9- previous
Looking Ahead – Events, Other Releases (GMT)
• No significant events
EUR/USD is likely to find support at 1.0509 levels and currently trading at 1.0569 levels. The pair has made session high at 1.0583 and hit lows at 1.0523 levels. Dollar declined against the euro on Monday as investors reduced appetite for greenback and fall in U.S. Treasury yields and U.S. stocks drove the dollar down. A solid U.S. December jobs report has reinforced the view the Federal Reserve might raise interest rates at a faster-than-expected pace in 2017.On Monday, Boston Federal Reserve President Eric Rosengren called for the U.S. central bank to step up its pace of interest rate increases, while Atlanta Fed President Dennis Lockhart said the possibility of a fiscal boost under Trump has shifted economic risks to the upside. Focus for the week will be a news conference on Wednesday at which U.S. President-elect Donald Trump may give more details about the policies he will seek to implement after he takes office on Jan. 20. The dollar index which tracks the greenback versus a basket of six currencies fell 0.3 percent, to 101.93. The euro was last up 0.4 percent, at $1.0569.
GBP/USD is supported in the range of 1.2123 levels and currently trading at 1.2161 levels. It reached session high at 1.24178 and dropped to session low at 1.2125 levels. Sterling declined sharply against dollar on Monday as sterling was weighted down after talk of Britain drastically reworking trade ties with the European Union after Brexit sent the pound tumbling to two-month lows. Sterling was the big mover in the currency market, falling nearly 1 percent against the dollar after May's remarks. May said she was willing to sacrifice the country's single-market membership for more control over its borders. Sterling slid as low as $1.2125, its weakest against the dollar since the end of October. It fell about 1.2 percent against the euro, hitting 86.91 pence per euro, the lowest since mid-November. Sterling was last trading at $1.2162, down 1 percent on the day. That put it on track for its worst day since Oct. 11.
USD/CAD is supported at 1.3173 levels and is trading at 1.3229 levels. It has made session high at 1.3260 and lows at 1.3194 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday as uncertainty ahead of Donald Trump's inauguration as U.S. President this month decreased the demand for dollar. The Canadian currency had hit its strongest in more than three weeks on Friday following surprisingly strong employment and trade data, before pulling back to end barely higher. Oil prices tumbled by 4 percent on Monday on concern that record Iraqi crude exports and rising U.S. output would undermine OPEC's efforts to curb global oversupply. OPEC's second-biggest producer, oil exports from the southern Basra ports reached a record high of 3.51 million barrels per day (bpd) in December, the oil ministry said. Iraq's oil ministry underscored that the high levels from the south would not affect the country's decision to cut January production to comply with the OPEC agreement. But some remained concerned over the feasibility of the cuts, which would have to come from the north.
USD/JPY is supported around 115.70 levels and currently trading at 116.07 levels. It peaked to hit session high at 116.55 and made session lows at 115.93 levels. The Japanese yen strengthened against the dollar on Monday as appetite for the safe-haven currencies increased as appetite for dollar reduced as markets reassessed the outlook for the U.S. economy after Donald Trump is inaugurated as President later this month. A solid U.S. December jobs report has reinforced the view the Federal Reserve might raise interest rates at a faster-than-expected pace in 2017. Boston Fed President Eric Rosengren on Monday called for the U.S. central bank to step up its pace of interest-rate increases from the once-a-year pattern it has pursued since 2015, warning of inflation risks if it does not. The dollar was last down 0.4 percent at 116.43 yen. It dipped modestly against the euro and Swiss franc, leading the dollar index, which measures the greenback against a basket of six major currencies, to stand 0.08 percent lower at 102.150.
European shares edged lower on Monday, while a rise among basic resources stocks helped Britain's FTSE 100 index hit a record high.
UK's benchmark FTSE 100 closed up by 0.44, the pan-European FTSEurofirst 300 ended the day down by 0.45 percent, Germany's Dax ended down by 0.3 percent, France’s CAC finished the day down by 0.5 percent.
Declines in energy and financial stocks weighed on the S&P 500 on Monday and helped stall the Dow's pursuit of the 20,000 milestone ahead of earnings season and U.S. policy changes under Donald Trump.
Dow Jones closed down by 0.37 percent, S&P 500 ended down 0.34 percent, Nasdaq finished the day up by 0.19 percent.
U.S. Treasury yields fall on Monday as nervousness about the Chinese yuan and Britain's exit from the European Union rekindle safe haven demand for low-risk government bonds ahead of this week's $56 billion supply.
The yield on the benchmark 10-year Treasuries was down 3 basis points at 2.385 percent, while the 30-year bond yield was 3 basis points lower at 2.975 percent.
Gold rose to a five-week high on Monday as markets reassessed the outlook for the U.S. economy after Donald Trump is inaugurated as president later this month, taking support from the falling dollar and lower U.S. Treasury yields.
Spot gold was up 0.9 percent at $1,183.60 an ounce by 3:17 p.m. EST (2017 GMT) after touching $1,185.80, the highest since Dec. 5. U.S. gold futures for February delivery settled up 1 percent at $1,184.90.
Oil prices tumbled by 4 percent on Monday on concern that record Iraqi crude exports and rising U.S. output would undermine OPEC's efforts to curb global oversupply.
U.S. crude futures settled down $2.03 at $51.96 a barrel, while Brent futures settled down $2.16 at $54.94 a barrel.
The material has been provided by InstaForex Company – www.instaforex.com