Market News & Analysis
Market Brief: Sentiment Perks Up Ahead Of Sino-US Trade Deal
View our guide on how to interpret the FX Dashboard
- Risk sentiment was given a gentle boost with traders anticipating that US and China will sign the much-touted phase one trade deal on Wednesday.
- The British pound was weaker following further hints from BOE that they may ease.
- AUD and NZD are the strongest majors, GBP and JPY are the weakest.
- Volatility remained low overall due to a lack of economic data.
- DXY’s advance has stalled at the 200-day eMA, with the index closing the week with a 2-bar reversal pattern below this key level.
- A bearish pinbar has formed on USD/CHF and bullish engulfing candle on EUR/USD underscores the potential for the dollar to mean revert
- USD/JPY traders are keeping a close eye on 109.73 resistance to see if it can finally break. Whilst Friday’s bearish pinbar shows a hesitancy to push high, today’s price action is testing its highs on the back of the weaker yen and positive trade deal sentiment.
- We’re keeping a close eye on GBP/USD to see how it reacts around 1.30. Price action is drifting lower to this key support level and, if it breaks, opens up a run for the lows around 1.2900.
- NZD crosses are perking up, reinforcing the analysis that perhaps we’ve seen a trough on NZD/CHF, NZD/JPY, NZD/USD (and a peak on EUR/ZD).
- Most Asian stock markets are trading in the green ahead of the official sign-off of the U.S-China Phase One trade deal that is scheduled to take place in Washington on 15 Jan. Meanwhile, Japan’s Nikkei 225 is closed today for a public holiday
- Interestingly, the USD/CNH (offshore Yuan) has continued to inch lower and in today’s Asian session, it has managed to breach below 6.90 for the first time since Jul 2019 that has added impetus to maintain the on-going positive sentiment seen in Asian equities in general.
- Australian’s ASX 200 has dipped slightly by -0.37% but the Index is still holding at its previous range resistance/all-time high area of 6890/880. Today’s lacklustre performance has been dragged down by healthcare related stocks where the Healthcare sector is downed by-1.23%.
- Other than U.S-China diplomatic trade relations, the other significant focus will be the start of U.S. Q4 2019 earnings session. Overall, the consensus is set for another second consecutive drop in earnings for Q4 at -1.6% y/y. The major banks will kickstart the reporting session where Q4 earnings report cards for Wells Fargo, Citigroup and JP Morgan will be out on Tues, 14 Jan.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.