MARKET WRAP
As of Thu 23 Jan, Singapore Time zone UTC+8
FX MOVES
U.S. Dollar Index, -0.03%, 97.50 (Sentiment: Negative)
USDJPY, -0.13%, $109.74 (Sentiment: Neutral)
EURUSD, +0.11%, $1.1096 (Sentiment: Neutral)
GBPUSD, +0.72%, $1.3146 (Sentiment: Neutral)
USDCAD, +0.52%, $1.3137 (Sentiment: Positive)
AUDUSD, -0.03%, $0.6843 (Sentiment: Neutral)
NZDUSD, -0.02%, $0.6596 (Sentiment: Neutral)
Market Moves
S&P500, +0.03%, 3,321.75 (Sentiment: Positive)
Nasdaq, +0.14%, 9,383.77 (Sentiment: Positive)
Nikkei Futures, -0.26%, 23,797.5 (Sentiment: Positive)
Market Outlook : European Central Bank is unlikely to either do or say much when it meets later today. If there is any change in tone, it might be towards a less dovish one, given the signs of ‘green shoots’ in the data and deescalating political tensions. Even in this case though, any upside reaction in the euro is unlikely to be large. Rather, a much bigger force in determining the euro’s broader direction will be the preliminary PMIs for January, which are due on Friday. This is probably the most important data set for the direction of monetary policy. If they reaffirm that the economy is getting its feet under it, that could help establish a floor under the Euro – otherwise, any more weakness could reignite concerns about a potential recession.
SUMMARY OF NOTABLE EVENTS
CANADIAN MONETARY POLICY
The Bank of Canada maintained its key overnight interest rate at 1.75% as expected on Wednesday but opened the door to a possible cut should a recent slowdown in Canadian economic growth drag on. The central bank slashed its forecast for fourth quarter annualized growth to 0.3% from 1.3% in October. It also pegged annualized growth for the first quarter of 2020 at 1.3%, down from a previous internal forecast of 1.7%. Money markets now see about a 20% chance of a rate cut in March. The Canadian Dollar fell in reaction as the most hawkish central bank is signaling a dovish alley.
APPLE ASKS TAIWAN SEMI TO INCREASE A13 CHIP PRODUCTION TO KEEP UP WITH IPHONE 11 DEMAND
IBM beat earnings estimates and issued upside FY20 EPS guidance, but the resilience in Apple (AAPL 317.70, +1.13, +0.4%) and the semiconductor space should not be overlooked. Bloomberg reported that Apple will begin producing low-cost iPhones next month and asked Taiwan Semi (TSM 58.35, +0.11, +0.2%) to increase its chip supply to meet strong iPhone demand.
CHINA’S WUHAN SHUTS DOWN TRANSPORT AS GLOBAL ALARM MOUNTS OVER VIRUS SPREAD
Deaths from China’s new flu-like virus rose to 17 on Wednesday, with more than 540 cases confirmed, leading the city at the center of the outbreak to close transportation networks and urge citizens not to leave as fears rose of the contagion spreading. Any widespread contagion will weigh on risk assets as businesses will eventually be affected if people choose to stay home.