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FTSE hits 7200, USD softer
The FTSE skyrocketed to the fresh all-time high of 7200p. A softer pound, firmer oil and commodity prices and solid appetite in the stock markets hint at the possibility of a further rise towards fresh historical highs.

Energy (+0.87%), utilities (+1.22%) and financials (+0.77%) lead gains at the 2017 open.

Cable reversed earlier gains and broke below its 200 and 100-hour moving averages (1.2285 and 1.2273 respectively). The softening US dollar suggests limited downside potential and the possibility of a deeper upside correction. Yet the mid-term bias remains negative. The key GBPUSD resistance is seen at 1.2420 (the major 38.2% retracement on Dec 12th to Dec 28th decline), before 1.2500 (optionality).


US has a busy calendar

The US dollar softened across the board. The US dollar index slid 0.13%. The US has a busy economic calendar for the first trading week of 2017.

The Federal Reserve (Fed) December meeting minutes are due on Wednesday and are expected to reveal further details on Fed members’ outlook for the future of the US’ monetary policy. At its December meeting, the Fed raised the Federal funds rate by 25 basis points and predicted three rate hikes in 2017, versus two forecasted earlier. The US sovereign yield curve shifted significantly higher as a result of the hawkish stint in the US’ rate policy. The curve slightly came off last week. The US 10-year yields closed the year below 2.45%, as the Fed hawks realized gains before the year-end holiday seasons.

This week, the US labour market data will be key. The ADP employment report, due on Thursday, is expected to be softer in December. The consensus is 175’000, versus 216’000 released a month earlier. The nonfarm payrolls, due on Friday, are forecasted at 178’000 as last month. Overall, the performance of the US labour market is expected to have softened in December.

Therefore, as the Fed’s tighter policy has been mostly priced in, we could see a further temporary easing in the US dollar and US yields depending on the economic data. However, we note that 2017 is expected to be a profitable year for the greenback lovers.

As it seems today, the Fed’s positive divergence vis-à-vis the rest of the world should remain supportive of the US dollar throughout 2017.


Some colour out of Asia

China made an optimistic start to the year as Caixin’s manufacturing PMI hinted at speeding expansion in December (51.9 vs. 50.9 expected and printed a month earlier). The economic activity in China is expected to expand at a higher pace moving into the Chinese New Year, which is due earlier this year. People’s Bank of China (PBoC) advisor’s estimated the country’s growth at 6-7% for the coming year.

Chinese and Australian stocks lead gains in Asia. ASX 200 rallied 1.19%, as technology stocks (+2.12%), industrials (+1.73%), miners (+1.17%), financials (+1.05%) and energy stocks (+0.92%) all saw solid demand. Hang Seng (+0.71%) and Shanghai’s Composite (+0.83%) gained. Japanese stocks benefited from an extra holiday.

The Aussie (+0.63%) was among the leading gainers against the greenback as the US 10-year yields closed 2016 below 2.45%. Easing US yields could revive the carry appetite and encourage a rise to 0.7245 (minor 23.6% retracement on Dec 14th to Dec 23rd decline), before the critical 0.7299 (major 38.2% retrace).

14-12-2020

GBP jumps on Brexit talks extension
The British pound has jumped in early trading this week after the UK Prime Minister and EU Commission President agreed to extend Brexit talks beyond Sunday. MARKETSThe S&P 500 fell on Friday, wrapping up a losing week, as the outlook for additional fiscal… Read more

10-12-2020

AirBnB IPO today
At its IPO price of $6 per share, Airbnb ABNB, is expected to raise at least $3.5 billion with an initial market capitalization topping $40 billion. MARKETSStocks fell on Wednesday, retreating from the record highs set earlier in the day, as tech shares strug… Read more

9-12-2020

S&P 500 closes over 3,700
MARKETSThe S&P 500 closed above 3,700 for the first time ever on Tuesday as Pfizer started to roll out its coronavirus vaccine in the U.K., lifting hope of the economy recovering in the near future. The Dow Jones gained 0.4% while the Nasdaq Composite clim… Read more

8-12-2020

Global stock market cap reaches $100 trillion for 1st time
The value of all the stocks in the world put together has reached a giant $100 trillion for the first time. MARKETSThe Dow fell 0.69% Monday, led by Intel and broad-based weakness in value stocks as rising Covid-19 restrictions offset optimism over an imminen… Read more

4-12-2020

Pfizer vaccine supply chain problems
MARKETS The S&P 500 fell slightly from record high. Major U.S stocks indices cut gains quickly in the final hour of trading after Dow Jones reported Pfizer now expects to ship half of the doses it had previously planned this year after finding raw materia… Read more

2-12-2020

Dollar Purge Continues
The US dollar dropped to fresh two-and-a-half year lows on Tuesday, with EUR/USD rising above the widely-watched 1.20 handle. MARKETSNews• Stocks in Asia-Pacific were mixed in Wednesday morning trade after major indexes on Wall Street surged to record highs o… Read more

1-12-2020

Bitcoin hits record high
The price of Bitcoin climbed 8.7% on Monday to reach a fresh record high of $19,857.03 - overtaking its previous peak made in 2017. MARKETSNews• Asia stocks rise as the Caixin/Markit manufacturing Purchasing Managers’ Index for November came in at 54.9 — its… Read more

30-11-2020

OPEC meeting starts
Today OPEC+ begin a 2-day meeting to decide whether to begin producing an extra 2 million barrels per day of oil, or delay for another 3-6 months. MARKETSNews• Asia-Pacific markets are mixed this morning while S&P 500 futures are down half a per cent. Ind… Read more