Macro Events & News

FX News Today

European Fixed Income Outlook: Asian stock markets moved mostly higher led by industrial and tech stocks and the Treasury yields climbed as investors nervously eye the risk of a U.S. government shutdown, as the federal spending authority is set to expire today, which weighed on the dollar. The Yen advanced, but the Nikkei still managed a 0.19% gain and the CSI 300 is up 0.50%. FTSE 100 futures are fractionally higher, U.S. futures marginally in the red. Core EGB yields climbed with Treasury yields yesterday, but peripherals outperformed and Eurozone spreads narrowed amid signs that the ECB remains very cautious in its approach to changes in the guidance, even as hawks slowly gain the upper hand. Today’s calendar has U.K. retail sales and Eurozone current account and BoP data after PPI numbers at the start of the session.

FX Update: The dollar has traded softer on U.S. political concerns, though has remained above recent trend lows versus the yen, euro and most other currencies. The narrow trade-weighted USD index (DXY) is down 0.2%, making a low at 90.33 and swinging the 37-month low of Wednesday at 90.14 back into scope. The House of Reps passed the stopgap funding bill yesterday, and the vote now goes to the Senate, which has delayed its vote until later today and where there remains significant opposition to the bill. Republicans have been making amendments to the bill in an attempt to entice Democrat votes, but Democrats signalled that they have enough Senate opposition to stop the bill, which does not give sufficient concessions to them on immigration, government spending and other issues. According to the Washington Post, 39 Democrat and at least two GOP Senate members are known to be in opposition, leaving the bill short of the 60 votes needed to advance. This will be the dominant focus for markets today for market participants. Should the vote fail, government agencies will start shutting down from tomorrow — a scenario that would likely spark heavy dollar selling.

Charts of the Day

Main Macro Events Today        

US Partial Government Shutdown

Swiss Product and Import Prices  –  should fall to a 0.4% in December after November’s 0.6%.

US Retail Sales  – December retail sales expected to show a decline of 0.8% m/m (median -0.6% m/m), which would correct some of the 1.1% m/m gain that was seen in November.

Canadian Manufacturing Sales – manufacturing shipment values expected to rise 1.9% m/m after the 0.4% dip in October.

Prelim UoM Consumer Sentiment – expected to rise to 97.0 after the index slid 0.8 points to 95.9 in December, supported by the bull run in equities and the passage of the tax bill.

FOMC Member Quarles Speech

Support and Resistance Levels