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China stocks at 13-year high

Daily Candlesticks
Source: GKFX / MT4 (January 12, 2020)

GBP/USD has held the breakout of resistance from the peaks formed in December ’19 and September ’20 after a successful re-test. The implication is a continuation of the breakout. The next ‘Big Fig’ and possible upside target is 1.40. 
 

TAKEAWAYS


•    GBP/USD pops over 1% back toward December high
•    10-year Treasury yield nears 10-month high, banks lead stock gainers
•    Shanghai Composite jumps 2% over 3,600 to highest since Dec 2015
•    Biden will announce a multi-trillion stimulus package on Thursday
•    House Democrats plan vote to impeach President Donald Trump again today
•    Oil prices hit an 11-month high, Brent over $56 pb after large inventories draw
•    DAY AHEAD: Trump impeachment vote, US CPI, Fed’s Beige book
 

GURU WISDOM


“I owe my success to having listened respectfully to the very best advice, and then going away and doing the exact opposite.” – G.K. Chesterton
 

MARKETS


*Daily closing price
↗ EUR/USD    1.2206        (+0.47%)
↗ GBP/USD    1.3664        (+1.11%)
↘ USD/JPY    103.75        (-0.47%)
↗ S&P 500    3801.19    (+0.04%)
↗ Hang Seng    28,276.75    (+1.32%)
↗ Gold        1855.43    (+0.65%)
↗ Oil (Brent)    56.69        (+1.85%)
↘ Bitcoin    34,445        (-2.91%)
 

NEWS

 

GBP/USD pop


Sterling was a top FX riser on Tuesday as the dollar rally of the last three days came to an end. Markets switched back to assets that stand to gain from the vaccine rollout and a global growth recovery. Negative interest rate fears had seen Sterling drop further than most amid the dollar rally but it snapped back more than most in the recovery.
 

Trump impeachment


Democrats apparently have enough votes for a second impeachment of President Trump on Wednesday. A Senate trial would happen after Trump has left office and there are rumours that some Republican Senators could support the motion, possibly with the approval of Senate leader Mitch McConnell. Two third of Senators would need to support the motion for Trump to be impeached.
 

Shanghai stocks


Stocks in mainland China jumped on Tuesday led by gains in financial stocks. The CSI 300 hit a 13-year high while the Shanghai Composite reached its highest in 5 years. Higher yields are pushing up bank stocks supported by optimism about better bilateral relations with the United States under President Joe Biden.
 

Oil inventories


A surprise 5-million-barrel draw in weekly API oil inventories helped push the price of oil to its highest in 11 months. Goldman Sachs have lifted their end-of-year Brent crude forecast to $65 per barrel on expectations of improved international jet fuel demand.
 

DAY AHEAD 


*Times in GMT
N/A - Trump Impeachment
09:00 - ECB's President Lagarde speech
13:30 – US Consumer Price Index (YoY)(Dec) [1.3% Exp vs. 1.2% Prev]
19:00 - Fed's Beige Book
 

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