Euro is rebounding higher after the ECB meeting and gold hit its highest level in three months
U.S. equity futures are back in the green, European stocks are mixed after worries about a U.S.-led trade war put world stocks at risk of their first two-day loss of the year on Thursday, while bond markets bounced as China poured cold water on reports that it might stop buying U.S. debt.
Then, another Reuters report late Wednesday said Canada was “increasingly convinced” Trump will announce the US is pulling out of NAFTA. Following the news, there was a report that Mexico will leave NAFTA negotiation if President Trump triggers 6-month process to withdraw from the deal.
European stocks are little changed amid a slew of corporate results as investors continue to assess the new year’s equity rally. The Stoxx Europe 600 Index rises less than 0.1% following Wednesday’s 0.4% drop, which snapped a five-day winning streak.
Both Brent and West Texas Intermediate oil price futures were hovering just off three-year highs at just under $70 and $64 a barrel, with WTI briefly rising above $64 overnight, triggering stops, while industrial metals dipped, and gold dropped slightly to $1,317.76 after spiking to nearly four-month highs in the previous session.
The European Central Bank (ECB) December meeting minutes were released today as this was being written. The main subject there was the discussion on ‘gradual shift’ starting from early 2018 which is much earlier than anticipated.
The U.S CPI data will be released today. Moreover, Unemployment Claims has increased and made bad effects on Dollar. The more important news, however, comes from FOMC member Dudley who delivered a speech about the economic outlook of the US at the Securities Industry and Financial Markets Association.
The dollar pared its Thursday drop and Treasuries rebounded as investors unwound positions initiated on China headlines. Euro and pound longs got stopped out, as investors are now waiting for the U.S. inflation data to add fresh exposure. The ECB meeting accord showed some signs of guidance shift in 2018 which helped buoy the Euro against the dollar. Bonds gained while equities were mixed, and oil stayed near recent highs.
GBPUSD – The pair is poised for a test at the rising 21-DMA (1.3456) with the three-day pullback being regarded as a corrective move.
USDJPY – The pair witnessed the largest one-day drop since November and finishes the session firmly below the 200-DMA (111.72) and made a low of 111.03. The Key chart focus is on 110.84 at the November lows.
EURUSD – The Euro takes out the 1.2000 after the Chinese officials released their report on the UST holdings and made a high of 1.2058.
AUDUSD – The Aussie grinds higher to a new three-month high, testing the 0.7887-97 Fibonacci resistance and October highs.
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