Sentiment soured ahead of the long US weekend, the S&P500 closing down 0.7%, risk-sensitive currencies underperformed, while bond yields fell slightly and US economic data mostly disappointed. Commodities, Brent crude oil fell 2.3% to $55.10, copper fell 1.7%, iron ore rose 0.5% to $171.90, and gold fell 1.0%.
Overnight Currency Ranges
AUD/USD: 0.7682 – 0.7757
EUR/USD: 1.2075– 1.2146
GBP/USD: 1.3572 – 1.3679
USD/JPY: 103.62 – 103.90
USD/CAD: 1.2659 – 1.2765
NZD/USD: 0.7118 – 0.7202
AUD/JPY: 79.68 – 80.51
AUD/NZD: 1.0768 –1.0804 (3 month high)
China’s data dump will kick off the week with 4Q20 GDP in focus. Industrial production, retail sales, and an update on property sector investment for December will all be release later today. Apart from that expectations of a quietish day with the U.S out celebrating Martin Luther King Jnr before a busy week begins which includes central bank meetings in Canada, Japan, Norway, South Africa and the ECB, the monthly employment report from Australia and the inauguration of President-elect Joe Biden.
Concerns were triggered by a delay in the Pfizer’s vaccine distribution in Europe, which revived concerns about economic progress within the pandemic context. Wall Street closed in the red, US Treasury yields edged lower.
On Saturday, Prime Minister Boris Johnson announced additional restrictive travel measures on Friday, to protect “against the risk of as yet unidentified new strains.” The UK will close all travel corridors starting this Monday, and anyone flying into the country will need to provide a negative coronavirus test.
Significant USD demand pushed the AUD/USD to a low of 0.7682 in late Friday before it close at 0.7703. Demand ahead of 0.7640 should slow any dip in the early part of the week while offering interest at 0.7780 and again at 0.7820 is expected to provide meaningful resistance.
Event Risk Data Today
CH – Q4 GDP
CH – December Retail Sales, Industrial Production and Fixed Asset Investment
CA – December Housing Starts
US – Observes a holiday for Martin Luther King Jr. Day.