Markets Slide Amid U.S.-Europe Trade Tensions

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Forex Market 

AUD: Supported Above 0.6700 as USD Softens on Trade Tensions 
Risk sentiment deteriorated overnight despite the U.S. market holiday, driven by escalating trade tensions between the U.S. and Europe. With U.S. cash equities closed for MLK Day, price action flowed through futures and FX, where USD weakness supported risk currencies.
AUD/USD traded within a narrow range before settling higher, extending gains through the Asian and European sessions amid a softer greenback. Buying interest remains evident on dips, while upside progress continues to meet selling interest.
EUR and GBP pushed to fresh highs as European equities sold off on renewed tariff threats. CNH strengthened following mixed-but-resilient Chinese data, keeping the U.S. dollar on the back foot across the majors.

General Market

Wall Street

  • Dow Jones -0.2% (49,359)
  • S&P 500 -0.1% (6,940)
  • Nasdaq -0.1% (23,515)
  • U.S. 10Y yields unchanged at ~4.22%
  • VIX +18.8% (18.84)

Asia-Pacific

  • Nikkei -0.7% (53,584)
  • Hang Seng -1.1%
  • ASX 200 -0.3% (8,875)
  • Shanghai Composite +0.3% (4,114)

Europe

  • Stoxx -1.5%
  • CAC -1.8% (8,112)
  • DAX -1.3% (24,959)
  • FTSE -0.4% (10,195) 

 

Headlines to Watch

United States
  • Jan 20: U.S. markets closed for Martin Luther King Jr. holiday. ADP Employment Change (Dec 27) to give early read on private sector jobs.
  • Philadelphia Fed Non-Manufacturing Activity (Jan) to signal service sector momentum.
United Kingdom
  • ILO Unemployment Rate (3Mths) for Nov expected at 5.1%, steady from October.
Germany / Eurozone
  • ZEW Survey Expectations (Jan) forecast to improve to 50.0 (prev. 45.8).
  • ZEW Survey Current Situation (Jan) expected to rise slightly to -76.0 (prev. -81.0).
China
  • 1-Year and 5-Year Loan Prime Rates (Jan) closely watched for potential monetary guidance.
Canada
  • Upcoming CPI and BoC Overall Business Outlook Survey to provide clues on inflation trends and policy expectations.
Global / Geopolitical
  • Continued market attention on U.S.–Europe trade tensions, including President Trump’s comments on European tariffs and Greenland developments.
Currency PairMid-market Rate
AUD/USD0.6711
AUD/NZD1.1584
AUD/JPY106.16
AUD/CNY4.6724
AUD/EUR0.5765
AUD/GBP0.5000
AUD/HKD5.2322

 

 

 

 

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