Markets stabilizing, dollar and equities steady
Global stock markets were stable and the dollar is steady, but slightly lower against peer currencies. The mood in the market is positive, as traders await impeachment news and digest higher US Treasury yields. China’s Shanghai Stock Index rallied to a 5-year high, fueled by demand for financial stocks and the yuan reached its strongest level since mid-2018 against a basket of its trading partners’ currencies. US Treasury 10Yr yields are trading higher at 1.17%, gold and oil are unchanged. Traders await this morning’s US Job Openings and Labor Turnover Survey (JOLTS Job Openings).
“When you reach the end of your rope, tie a knot in it and hang on.”
January 12, 2021
EUR/USD 1.2146 GBP/USD 1.3595 USD/CAD 1.2773 AUD/USD 0.7700 USD/JPY 104.28 USD/CNH 6.4654 USD/ILS 3.1597 USD/MXN 20.0089 USD/CHF 0.8904 USD/INR 73.2538
In light and steady trading, the dollar edged lower across the board. Market mood is positive, but chatter is increasing over the speculative excess that has been driving stock markets (and crypto-currencies) to all-time highs amid a pandemic. Financial giants JPMorgan, Citigroup and Wells Fargo will announce their earnings.GBP
The UK pound rallied to its highest level in a week after Bank of England Governor Andrew Baily downplayed the idea of negative rates, an idea that had gained credibility as more lockdowns and restrictions were put into effect. The pound gained nearly 0.7% versus the US dollar after falling to a two-week low yesterday.EUR
The euro underperformed today, down slightly against the dollar. Economic data released today were notable, as Eurozone CPI/PPI and Industrial Production were better than expected. On the other hand, Retail Sales were much worse than expected.CAD
The loonie is slightly higher overnight as commodity currencies remain reasonably well bid. Although oil and gold is little changed, comments by China’s President Xi were upbeat on growth.ASIA/PACIFIC
Neither the Chinese yuan nor Japanese yen moved much overnight. The Chinese stock market outperformed following upbeat comments by China's President Xi.
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