In This Article:
Earlier in the Day:
There were no material stats released through the Asian session this morning to provide the markets with direction and, with the U.S markets having been closed on Monday, recent economic data out of the region and direction from the U.S futures influenced early on.
At the time of writing, the Japanese Yen was up 0.23% to ¥109.42 against the U.S Dollar, the gains driven by risk sentiment, as the Asian equity majors follow the U.S futures into the red through the early part of the day.
The Aussie Dollar saw bigger losses early on, down 0.34% to $0.7135 while the Kiwi Dollar was down by just 0.12% to $0.6724.
Following softer growth figures out of China on Monday and out of South Korea this morning, sentiment towards the economic outlook continues to plague the markets. On one side, an end to the trade war would support a pickup in economic activity, with a shift in central bank policy outlooks to the more dovish side also a positive. On the flip side, the slowdown in growth has not been immediate and has been evident for a number of quarters, which suggests that it hasn’t just been down to the U.S – China trade war.
In the equity markets, it was red for the majors, with the Hang Seng leading the way down, with a loss of 1% at the time of writing. The CSI300 and ASX200 were not far behind, with losses of 0.87% and 0.65%, with the Nikkei was down by 0.54%.
The Day Ahead:
For the EUR, following a quiet start to the week, on the data front, economic data scheduled for release this morning includes January economic sentiment figures out of Germany and the Eurozone.
Softer than forecasted numbers will likely weigh on the EUR, with the IMF and the Bank of Italy cutting growth forecasts at the start of the week.
On Monday, the IMF cut its global growth forecasts for this year and next, with 2019 growth cut by 0.2% to 3.5% for 2019 and by 0.1% to 3.6% for 2020, the cuts coming off the back of growth forecast cuts that had been made back in October.
While the U.S – China trade war was one of the key contributing factors to the downward revision, weakness in the German auto sector was also highlighted, as was weaker domestic demand in Italy.
At the time of writing, the EUR was up 0.04% to $1.1369, with today’s stats, updates on Brexit and chatter from the Oval Office to provide direction.
For the Pound, economic data scheduled for release this morning includes November wage growth and unemployment rate numbers along with December’s claimant count. We will expect wage growth and claimant count numbers to have the greatest influence on the data front.