Norges Bank announced daily NOK purchases in January of 1,000m

Danske Research Team Danske Bank A/S

Market movers today

It will be a quiet day today in terms of major economic data releases. Among other important data releases later this week, the December jobs report in the US is due out on Friday.

Selected market news

Over the weekend, PMI manufacturing figures in China for December were released. NBS PMI manufacturing December figures came out at 51.4 (slightly below consensus at 51.5) from 51.7 in November, having increased quite a lot in November. PMI from both the official NBS and the private Caixin index have been strong recently. While we look for some slowing of the Chinese economy in 2017, we expect it to remain strong in the short term, as a strong housing market and infrastructure boost in 2016 have yet to peak. There are early signs that the regional tightening towards housing is starting to work. The timing of the peak of the cycle is uncertain but we expect it to be in Q4/Q1.

On Friday last week, Norges Bank announced daily NOK purchases in January of 1,000m, i.e. an increase from the December pace of NOK900m. The purchases are related to the fiscal rule. The rise in purchases is not a big surprise as the 2017 rise in the fiscal use of petroleum funds together with lower oil revenues require Norges Bank to transfer a larger NOK amount from the petroleum fund and the State's Direct Financial Interest (denominated in FX). While the NOK purchases are not aimed at strengthening the NOK, the larger use of ‘oil money' is NOK positive and is one among several factors suggesting EUR/NOK will end 2017 lower than the current spot.

Download The Full Daily FX Market Commentary

Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.