Date: January21, 2019
Daily World Economic and Financial News
(CNBC):January21, 2019--- The dollar held firm against its rivals on Friday, set for its first weekly gain since mid-December on optimism about talks to end the trade war between China and the United States.
Media reports on Thursday and Friday suggested both countries were considering concessions ahead of a Washington visit from Chinese Vice Premier Liu He on Jan. 30 and 31 for talks aimed at resolving the trade standoff between the world’s two largest economies.
(CNBC): January, 2019--- Against a basket of rivals, the dollar was set to rise 0.68 percent on the week, its first positive week since mid-December. Against the euro, the dollar had strengthened 0.21 percent to $1.1371, its strongest since Jan. 4. The pound slipped against the euro and against the dollar, trimming overnight gains, as traders wagered on a second referendum vote on Britain’s EU membership.
(CNBC):January21, 2019--- Oil prices hit a roughly two-month high on Friday, rising with the stock market, on news that China has put forward a plan to eliminate its trade surplus with the United States. U.S. West Texas Intermediate crude futures ended Friday’s session up $1.73, or 3.3 percent, at $53.80 per barrel, the best closing price since Nov 21. International Brent crude oil futures were up $1.50, or 2.5 percent, at $62.68 per barrel around 2:30 p.m. ET. Brent earlier rose as high as $63, its best intraday price since Dec. 7.
(CNBC): January1, 2019--- Gold slipped to the lowest in more than a week on Friday as hopes of a thaw in the U.S.-China trade dispute perked up stock markets, while palladium held above $1,400 on a supply crunch.
Spot gold was down 0.68 percent to $1,282.57 per ounce. U.S. gold futures settled down $9.70 at $1,82.60 per ounce.
(REUTERS):January21, 2018--- China’s economic growth cooled slightly in the fourth quarter from a year earlier as expected, weighed down by weak investment and faltering consumer confidence as Washington piled on trade pressure, leaving 2018 growth the weakest in 28 years.
(REUTERS): January21, 2018---Asian markets kept their nerve on Monday as data showed the Chinese economy slowed at the end of last year, underlining the urgent need for more stimulus as Beijing wrestles with the United States over trade. Investors are also waiting to hear British Prime Minister Theresa May’s ‘Plan B’ for Brexit which is due to be presented to parliament later on Monday.
(WSJ):January21, 2018---China’s economic expansion languished to its slowest pace in nearly three decades last year, as a bruising trade fight with the U.S. exacerbated weakness in the world’s second-largest economy.
(WSJ): January21, 2018---The Eurozone’s economic slowdown has taken European Central Bank officials by surprise, potentially disrupting their plans to lift short-term interest rates this year. The shift underlines the difficulties central banks face getting back to growth rates and policy settings that were considered normal before the global financial crisis.
USD/JPY PAIR ANALYSIS
The pair is poised to extend its advance according to technical readings in the daily chart, as technical indicators entered bullish territory, maintaining their strong upward slopes. The pair has also surpassed the 61.8% retracement of its 111.41/105.16 decline at 109.05, which opens doors for a test of the upper end of the range. Moving averages in this chart, however, remain above 111.50, putting at doubt a longer-term advance. In the 4 hours chart, technical indicators have lost directional strength at their weekly highs, with the RSI consolidating in overbought territory.
Support levels: 109.40 109.05 108.65
Resistance levels: 110.00 110.45 110.90
2. Fundamental Overview
The strong performance of equities and rising US yields underpinned USD/JPY. The pair broke higher late Thursday on rumors the US may soften its stance on China toward speeding up a deal, and while the headlines were quickly denied, the positive momentum prevailed. News related to the trade dispute maintained the pair on the positive side on Friday, as Treasury yields soared on news indicating that China offered to boost US imports for six years, by a combined value of over $1 trillion.
The yield on the benchmark 10-year Treasury note finished the week at 2.788%, its highest for this 2019. Wall Street closed firmly up, adding to the pair's advance, as equities get support not only from trade-related news but also by a strong advance in oil prices boosting the energy sector. There are no macroeconomic figures scheduled for release in Japan today.
International & Financial Terms
- Detachment point: The trigger point above the attachment point, after which losses in the underlying portfolio no longer reduce the notional of a tranche.
- Discount basis Method of quoting the price of fixed-income securities. The price is expressed as an annualized discount from maturity value. It is also referred to as “discount yield”.
- Distributed generation: A system characterized by smaller, geographically dispersed and interconnected generators, rather than one central generator. It is used for the reduction in the loss of energy due to transmission.
- Down variance A conditional variance swap which accrues realized volatility only when the previous day’s underlying price is below prespecified levels.
Compiler: A Bank Dealing Room Section
Management of International Deputy The Expert In Charge Of Dealing Room