Here are the latest developments in global markets:
FOREX: The dollar was gaining versus its major counterparts during early European trading hours, posting moderate gains after the US Congress reached a bipartisan deal on a two-year spending bill. The plan promises to increase the debt ceiling and funding on military and domestic programs, though, the markets are concerned that the bill will widen nation’s deficit. The dollar index edged up to 90.33 (+0.12%), while dollar/yen and dollar/swissie changed hands higher at 109.13 (+0.35%) and 93.74 (+0.16%) respectively after deep falls yesterday. Pound/dollar could not sustain Thursday’s rally triggered by hopes that the BOE will raise interest rates faster than expected following hawkish BOE comments. Today’s encouraging British industrial production figures could not support the pair either, with pound/dollar giving up yesterday’s gains and slipping back to 1.3875 (-0.22%). Euro/pound was up at 0.8820 (+0.25%), while euro/dollar pared earlier gains sliding to at 1.2241 (-0.03%). Dollar/loonie extended its uptrend towards a fresh five-week high of 1.2615 (+0.04%). Aussie/dollar was slightly up at 0.7785 (+0.09%) (large option expiries are expected to take place today), while kiwi/dollar was last seen at 0.7222 (+0.08%).
STOCKS: The fresh sell-off in the US and Asian equity markets amid rising bond yields and inflation fears spread to the European stocks once again. The pan-European STOXX 600 which lost over 4.0% this year, was trading 0.40% lower at 1045 GMT driven by losses in financials, utilities, and energy, while the blue-chip Euro STOXX 50 was down by 0.36%. The Spanish IBEX 35 declined by 0.35%, the French CAC 40 fell by 0.19%, and the German DAX 30 inched down by 0.09%. US stock futures were in the red, pointing to a negative open.
COMMODITIES: Oil prices were on track to post the worst weekly performance in ten months as concerns over a rising global supply rose after the Energy Information Administration (EIA) stated on Wednesday that the US crude oil production per day touched a record high. Thursday’s news that OPEC’s member Iran is planning to raise production the next four years added further pressure to the market. WTI crude oil dived by 1.0% on the day to $60.52/barrel, remaining near five-week lows and Brent dropped by 0.62% to $64.41/barrel. In precious metals, gold retreated by 0.32% to $1,314.70/ounce.
Day ahead: Canada’s employment data pending
Looking at the economic calendar, Canada will see the release of employment figures at 1330 GMT. However, forecasts show that analysts remain cautious on the labor market despite recent evidence surpassing their projections. Particularly, they believe that the number of employees will increase by 10,000 in January after a strong rise of 78,600 in December, while regarding the unemployment rate, projections are for the measure to inch up by 0.1 percentage points to 5.8%. Note that the Canadian unemployment rate is currently at the lowest level seen in four decades.
In other data, the US will publish readings on wholesale inventories for the month of December at 1500 GMT, while Baker Hughes will report on the US oil rig counts at 1800 GMT, adding further volatility to oil prices.
Regarding today’s public appearances, Jon Cunliffe, the Bank of England’s Deputy Governor for Financial Stability will be speaking at 1645 GMT.
Corporations continue to release quarterly results as the equity market turmoil persists.
, while dollar/yen and dollar/swissie changed hands higher at 109.13 (+0.35%) and 93.74 (+0.16%) respectively after deep falls yesterday. ){kind=link}