Markets are back to full-time today to kick-start 2023 with a key week topped by NFP data on Friday and undermined by the ongoing rise in Covid cases and deaths in China. Japan and New Zealand remain closed today, but in Asia the ASX (-1.3%) is the laggard whilst Chinese bourses are on a firmer footing (Shanghai Comp +0.8%, Hang Seng +2.1%), despite weaker manufacturing PMI data from Caixin (49.0 vs 49.4). In FX markets JPY is the notable gainer across the majors (USDJPY -0.77% @ 129.50 and 6-mth lows earlier) and the USD is receiving a bid as European markets get into full swing (EURUSD at 1.0570 from 1.0675).
- The USD Index remains capped by 103.50 today as the USD softens in early new year trading.
- EUR – rotates at 1.0570 now, having spiked to 1.0710 on Monday but unable to hold this key round number.
- JPY – moved lower again as the pivot from the BOJ becomes more baked-in to market thinking, the key 130.00 was breached earlier for the first time since June 2022.
- GBP – Sterling holds significantly over 1.2000 at 1.2070 in the first London trades of the year.
- Stocks – European and UK FUTS are higher and the US500.F trades at 3872 now, up from the 2022 close for the cash market at 3839.50.
- USOil – Rallied to breach and hold $80.00 yesterday and trades at $80.70 now.
- Gold – Has taken another leg higher today on USD weakness, continued CB rate hikes and subdued economic outlook. Breached $1830 in early trades and is testing the next resistance at $1850 now.
- BTC – Sentiment woes continue – the biggest coin trades at $16.7k today.
Today – German CPIs, Turkish CPI, UK & US final MFG PMI, US Construction Spending.
Biggest FX Mover @ (07:30 GMT) EURJPY (-0.79%) into fourth consecutive day lower from 143.00 thighs last week to 138.30 today. MAs aligned lower, MACD histogram & signal line negative and falling. RSI 24.10 OS and still falling, H1 ATR 0.350, Daily ATR 1.823.
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Stuart Cowell
Head Market Analyst
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