Equity markets fell (Nasdaq -2.6% while VIX rose +5.22%). Financial and pharmaceutical companies led the slide, U.S. dollar more firmly supported by high Income – the main market driver. US 10-year bonds 1.85%, German 10-year highs to May 2019 as UK and German inflation hit 30-year highs. oil higher again, gold keeps circling. The pressure on the British Prime Minister is growing.
- U.S. DOLLAR (USDIndex 95.65) holds on to profits.
- US returns Up 10 years up – closed at 1.865% & acts at 1.883%.
- shares – US500 -85 (-1.84%) 4577 (GS -6.97%, BAC -3.44%, FB -4.0%, SONY -7.0%, Nikkei -0.27% – USA500 FUTS lower back on 4539.
- US oil – Skipped $87.00 With supplies very tight, Saudi retaliation against Sanaa and NK’s continued missile launches continue to worry sentiment.
- gold – stops $1812 from a test by $1820 & Spike to $1806.
- Bitcoin tested to $42,400, back to 41,200 now.
- Forex Markets – EUR USD back to 1.1336, USDJPY now 114.40 tested yesterday 115.00, cable back to 1.3600, from yesterday’s low of 1.3570.
Over night – UK CPI – 2 ticks higher at 5.4% vs. 5.2% CORE 3 ticks higher at 4.2%, RPI up to 7.5% of 7.1% & new 30 year highs. German CPI snake at 5.3% and HICP at the 5.7%.
European Open – The 10-year Bund yield is up 2.4 basis points to 0.002% in early trade, with strong December CPI readings in Germany and the UK adding to the pressure. Global stock markets are struggling with the sharp rise in yields and increasing expectations of tightening DAX and FTSE 100 futures down -0.8% and -0.6% respectively respectively, the Euro Stoxx 50 is down -0.7% so far and a -0.8% correction in the NASDAQ leads US futures lower. Pretty much the same picture as yesterday, with markets at risk of breaking out on tightening concerns and central banks coming under increasing pressure.
today – Canadian CPI, IEA OMR, US Building Permits, Housing Starts, Germany and US deliveries. merits from Bank of America, MS, United Health. DAVOS continues.
Biggest FX mover @ (07:30 GMT) NZDCAD (+0.35%) Rebounded from 3-day decline 0.8455 to 0.8495 now. MAs aligned higher, MACD signal line and histogram higher and test line 0. RSI 56 & rising, H1 ATR 0.0011 Daily ATR 0.0056.