Daily Brief

Daily Brief

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Main focus on Manufacturing PMIs

USD

Once again the USD and US equity markets are moving in opposite directions. DOW Futures are higher this morning, indicating an opening of over 100 points when the US equity markets open later today. Traders are focusing on the trade developments as President Trump announced he will sign the Phase One trade agreement on January 15th. He also mentioned that he will be going to China when the next phase begins. Traders will also be focused on US December PMI coming out later this morning. The forecasted number is 52.5 compared to last month’s release of 52.6. 

EUR

EUR/USD has moved off its overnight highs despite Eurozone PMI coming in better than expected. December PMI came in at 46.3, higher than the expected 45.9. Market analysts believe the move lower in EUR was simply profit-taking and expect the single currency remain better bid.

GBP

GBP/USD also has moved off overnight highs as concerns regarding Brexit are weighing on the pound. We are now less than a month away from the UK moving out of the EU and there is still no formal agreement in place. UK PMI also released this morning, coming in slightly lower than expected at 47.5, lower than the expected 47.6. 

JPY

USD/JPY remains under pressure as traders are beginning to focus on US politics with Iran, North Korea, and impeachment all in focus. Once again, the safe haven aspect of JPY trading has traders seeking refuge in the currency. The currency pair has moved a bit higher.

CAD

The Canadian Dollar is trading close to its highest level since October 2018. Overall USD selling, as well as higher oil prices, has aided the loonie. Brent Crude Oil Futures are higher this morning as traders focus their concern on the latest Middle East tensions. This looks to be an ongoing concern moving forward this week.

CNY

The PBoC has announced that it cut the reserve requirement ratio (RRR) 50 bps to 12.5%. This is the eighth rate cut since early 2018, as the PBoC hops that lower rates will help borrowers. China Caixin PMI dropped to 51.5 in December from 51.8, missing the expected 51.8. Business confidence is expected to improve moving forward as China and the US continue trade negotiations.

USD: USD lower as the new year begins. PMI release today.

USD: USD lower as the new year begins. PMI release today.

EUR: EUR off overnight highs, PMI release better than expected.

EUR: EUR off overnight highs, PMI release better than expected.

GBP: Brexit fears pressure the GBP.

GBP: Brexit fears pressure the GBP.

JPY: Geopolitical concerns push traders towards JPY.

JPY: Geopolitical concerns push traders towards JPY.

CAD: Canadian Dollar at highest level since Oct 2018.

CAD: Canadian Dollar at highest level since Oct 2018.

CNY: RRR rate cut 50 bps, PMI drops to 51.5.

CNY: RRR rate cut 50 bps, PMI drops to 51.5.

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