Stock markets were narrowly mixed across Asia in cautious trade, with Australia and Hong Kong among the markets still closed for the extended holiday weekend. In Europe, the UK is still on holiday and in North America Canada will remain shut today.
- USD (USDIndex 96.20) steady within 96-96.25 area. US stocks sustain gains in contrast to Asia stocks which corrected lower despite further promises of support for the economy from officials in Beijing. Yields also rose; USOil & Gold under refreshed pressure.
- Japan retail sales came in stronger than anticipated – the government last week announced more stimulus measures that also include a direct handout to families, which is boosting the chances of a consumption led recovery, although Omicron could still derail that scenario.
- US Yields 10yr has corrected -1.7 bp to 1.48%, as US Treasuries have found buyers.
- Equities – USA500 settled at 4730 (0.5% above key 4700), NASDAQ at 16344, USA30 at 35950, GER30 future is down -0.3%, Nikkei corrected -0.37%.
- USOil – reversed from $73.58, to 72.34, after airlines called off thousands of flights over the Christmas holidays amid surging COVID-19 cases, though Brent crude gained support from hopes that the Omicron variant will have limited impact on global demand. The contract did not trade on Friday because of the US market holiday.
- Gold – steady above $1,805 as weaker US yields counter firmer Dollar.
- FX markets – Yen struggled,USDJPY lifted to 114.68, EURUSD 1.1317, Cable trades at 1.3400.
Today – The data calendar is pretty empty on both sides of the Atlantic, which will leave investors mulling virus developments and central bank outlooks, with early trading suggesting a cautious backdrop and limited moves.
Biggest FX Mover @ (07:30 GMT) EURAUD (+0.60%) Breached 1.5692, breaking the 20- and 50-hours SMA, which have been bullish. MACD signal line & histogram turned positive. RSI 61.73 and rising.
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Andria Pichidi
Market Analyst
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