18 Jan: Cable soars, commodity bloc currencies in demand after BOC rate hike. Aust. jobs data, China GDP ahead.

By | January 18, 2018

 

Sterling and the commodity bloc currencies took centre stage on Wednesday, with Sterling initially rallying strongly on speculation that Brexit may be scrapped if a second referendum is held, as alluded to earlier this week by former UKIP leader, Nigel Farage, before reversing sharply late in the day. The commodity bloc headed higher after the BOC raised rates but also gave up some ground late in the US session as the US$ found new legs on the back of higher US bond yields. In other currencies, after running stops in Asia, the Euro then turned down and drifted off towards support ahead of the EU CPI, which caused a minor blip higher despite it coming in right on expectations, but had little overall effect. It has since moved sideways with much of the action being driven by Cable through the cross. Late in the day, the dollar has caught a bid tone as US yields headed higher, with US$Jpy heading back above 111.00.

In other markets, US stocks ignored the potential technical weakness seen in the charts yesterday and are closing, once again, at all time highs, led by technology and industrial stocks as well as a recovery in the financial sector. The metals and WTI have been mostly rangebound although the #api figure will be released shortly and will provide WTI with the next directional move..

Thursday will be a big day for the Aud$, with the release due of the following data: New Home Sales, Consumer Inflation Expectation, Unemployment (exp 5.4%, +9K, PR: 65.4%), China Retail Sales (exp 10.1%yy), Industrial Production(exp 6.0%yy), House Price Index(exp ?%yy),  Q4 GDP(exp 1.6% qq, 6.7%yy), Fixed Asset Investment(exp 7.1%yy) and the NBS News Conference. Alongside this, the Japanese Industrial Production and Capacity Utilisation for December are also due. From the EU, speeches from the Buba’s Weidmann and the ECB’s Coeure will be the focus ahead of the US session when the December Housing Starts/Building Permits and the Philadelphia Fed Mfg Survey will provide any directional bias.

CURRENCIES
EURUSD: 1.2212
Res  1.2240  1.2275  1.2300
Sup  1.2195  1.2165  1.2140
USDJPY: 111.14
Res  111.25  111.65  112.00
Sup  110.85  110.60  110.20
GBPUSD: 1.3854
Res  1.3880  1.3920  1.3950
Sup  1.3835  1.3805  1.3775
USDCHF: 0.9628
Res  0.9650  0.9665  0.9705
Sup  0.9600  0.9570  0.9540
AUDUSD: 0.7992
Res  0.8020  0.8055  0.8105
Sup  0.7970  0.7940  0.7900
NZDUSD: 0.7290
Res  0.7310  0.7330  0.7360
Sup  0.7270  0.7250  0.7230
INDICES / COMMODITIES
S&P: 2804
Res  2810  2815  2825
Sup  2795  2785  2775
DJI: 26106
Res  26125  26200  26250
Sup  26060  25980  25910
ASX SPI: 5966
Res  5985  6010  6030
Sup  5955  5935  5900
XAUUSD: 1329
Res  1335  1340  1345
Sup  1325  1320  1315
XAGUSD: 17.02
Res  17.15  17.30  17.45
Sup  17.00  16.90  16.80
WTI: 63.90
Res  64.35  64.90  65.45
Sup  63.30  62.80  62.20