Market Roundup

•    Trump: Tells manufacturers he will cut regulations, taxes.

•    Euro zone consumer confidence rises less than expected in January; -4.9 vs -4.8% forecast, -5.10 previous.

•    ECB’s Coeure: Rising EZ inflation due to raw-material price surge; price surge not having secondary impacts- DJ.

•    German inflation rate could reach 2 percent in January — Bundesbank.

•    Effect of ECB bond-buying on euro was small — Bundesbank.

•    Italian yields hit 6-wk high, Bund yields fall on Trump, French yields touch 1-yr high after first green bond launch.

•    USD sinks to 7-wk low traders cautious after Trump’s first weekend as president.

•    GBP/USD hits 5-wk high 1.2495 ahead of Supreme Court decision on parliamentary approval for Brexit.

•    China urges Trump administration to grasp the importance of ‘one China’.

Looking Ahead — Economic Data (GMT)

•    00:30 Japan Nikkei Mfg PMI Jan 52.4-previos

Looking Ahead — Events, Other Releases (GMT)

•    No Significant Events

Currency Summaries

EUR/USD is likely to find support at 1.0661 levels and currently trading at 1.0745 levels. The pair has made session high at 1.0750 and hit lows at 1.0704 levels. Euro rose against the dollar on Monday as the dollar was weighed down after Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal and told U.S. manufacturing executives he would impose a hefty border tax on firms that import products after moving American factories overseas. The U.S. dollar fell to a seven-week low against a basket of key world currencies and global stock markets declined amid investor concerns over Trump’s protectionist rhetoric. Earlier in the day, Trump met with a dozen prominent American manufacturers at the White House and said he would slash regulations and cut corporate taxes to boost the economy. In late trading, the dollar index, which measures the greenback against six major rivals, fell 0.6 percent to 100.16 led by 1.4 percent drop versus the yen to 113.01. The euro was up 0.4 percent at $1.0747, on course for its seventh daily rise in the last nine.

GBP/USD is supported in the range of 1.2415 levels and currently trading at 1.2504 levels. It reached session high at 1.2506 and dropped to session low at 1.2436 levels. Sterling surged against dollar on Monday as investors priced in a defeat for the government in its appeal against a ruling that forces it to consult parliament before formally triggering EU exit talks in March. British Prime Minister Theresa May will learn at 0930 GMT on Tuesday whether judges have upheld a High Court decision in November that her government must get parliamentary approval before triggering Article 50 of the Lisbon Treaty, the formal means of exiting the bloc. May has said she will trigger Article 50 by the end of March, and last week detailed her vision for a clean break with the EU by quitting its single market. Though that effectively meant Britain would undergo the «hard Brexit» many investors have feared, May’s relatively conciliatory tone and the fact that she had removed a layer of uncertainty was interpreted as a positive by markets. Sterling soared by 3 percent on the day of the speech against the dollar

USD/CAD is supported at 1.3205 levels and is trading at 1.3249 levels. It has made session high at 1.3334 and lows at 1.3241 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday as the greenback lost ground against a basket of major currencies as early moves by President Donald Trump highlighting a protectionist stance on trade gave investors cause to rethink the post-election rally. Prices of oil, one of Canada’s major exports, fell as signs of a strong recovery in U.S. drilling activity outweighed news that Organization of the Petroleum Exporting Countries and non-OPEC producers were on track to meet output reduction goals set in December. On the data front, the pace of Canadian wholesale trade cooled more than expected in November amid declines in the motor vehicle and parts sector, data from Statistics Canada showed. The 0.2 percent gain missed economists’ forecasts for an increase of 0.5 percent, while volumes were down 0.1 percent. The soft figures came after strong October growth, which was revised up to 1.3 percent from the previously reported 1.1 percent.

AUD/USD is supported around 0.7514 levels and currently trading at 0.7574 levels. It hit session high at 0.7586 and made session lows at 0.7551 levels. The Australian dollar stayed near a 2-1/2-month peak against the greenback on Monday while the U.S. dollar was on the back foot after U.S. President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies as China’s influence in the region rises. Fulfilling a campaign pledge to end American involvement in the 2015 pact, Trump signed an executive order in the Oval Office pulling the United States from the 12-nation TPP. The Australian dollar stood at $0.7572, within kissing distance of last week’s high of $0.7589, a level not seen since Nov.11.The Aussie posted its fourth straight weekly gain last week and is up more than 5 percent so far in January, making it one of the best-performing major currencies this year.That is a marked turnaround from late December when it hit a seven-month trough of $0.7160 as the U.S. dollar rode high on wagers that Trump’s policies would stoke U.S. inflation.Meanwhile ,domestic investors will be waiting for fourth quarter inflation data on Wednesday for further clues.

Equities Recap

European shares fell on Monday, weighed down by banks, oil stocks and a fall in Fingerprint Cards after the firm’s former CEO and a board member was arrested.

UK’s benchmark FTSE 100 closed down by 0.7 percent, the pan-European FTSEurofirst 300 ended the day down by 0.55 percent, Germany’s Dax ended down by 0.7 percent, France’s CAC finished the day down by 0.7 percent.

U.S. stocks edged lower on Monday as early moves by President Donald Trump highlighting a protectionist stance on trade gave investors cause to rethink the post-election rally.

Dow Jones closed down by 0.13 percent, S&P 500 ended down 0.26 percent, Nasdaq finished the day down by 0.03 percent.
Treasuries Recap

U.S. Treasury yields slipped on Monday with benchmark yields posting their biggest one-day drop in more than two weeks as investor jitters over President Donald Trump’s tough stance on trade spurred safe-haven demand for bonds.

The yield on benchmark 10-year Treasury notes was down 6 basis points at 2.403 percent, marking its steepest single-day drop since Jan. 5.

Thirty-year yields declined 6 basis points to 2.985 percent, while two-year yield decreased 5 basis points to 1.147 percent.

Commodities Recap

Oil prices fell 1 percent on Monday as signs of a strong recovery in U.S. drilling largely overshadowed news that OPEC and non-OPEC producers were on track to meet output reduction goals.

Brent crude settled down 26 cents, or 0.5 percent, at $55.23 a barrel. U.S. crude futures closed the session at $52.75 a barrel, down 0.9 percent, or 47 cents.

Gold rose to a two-month high on Monday, as unease over the economic policies of U.S. President Donald Trump pushed investors towards safer assets while the dollar and U.S. bond yields fell.