Headlines:
- USD/JPY stays perky, closes in on 116.00
- USD/JPY goes with the break in push to five-year highs
- The bond market is arguably the key spot to watch this week
- UK November mortgage approvals 67.0k vs 67.2k prior
- UK December final manufacturing PMI 57.9 vs 57.6 prelim
- Germany December unemployment change -23k vs -15k expected
- China to only lift Xi'an lockdown when 'zero social transmission' is achieved
- France December preliminary HICP +3.4% vs +3.5% y/y expected
- Switzerland December CPI +1.5% vs +1.5% y/y prior
- Germany November retail sales +0.6% vs -0.5% m/m expected
Markets:
- GBP leads, JPY lags on the day
- European equities higher; S&P 500 futures up 0.3%
- US 10-year yields up 3.5 bps to 1.665%
- Gold flat at $1,800.06
- WTI up 0.3% to $76.33
- Bitcoin up 1.2% to $46,531
London traders returned after the long weekend but the market theme remains the same. Bond yields are pushing higher and equities are continuing to keep in a good mood to start the new year.
In turn, that has seen USD/JPY push to fresh five-year highs above 116.00 as the pair is now almost 100 pips up to 116.30.
10-year Treasury yields are on the brink of contesting the topside of its key technical wedge, as pointed out here. So, that will be one to watch in gauging any further potential extension higher in USD/JPY.
Elsewhere, the dollar is keeping steady against the rest of the major currencies bloc with little change for the most part. EUR/USD is slightly lower as it falls deeper into its pre-Christmas range in between 1.1230 to 1.1340.
Stocks are not letting up as European indices are posting solid gains while US futures are also pointing to a slight advance. S&P 500 futures are up 0.2% currently.
Meanwhile, oil is holding a minor gain awaiting the OPEC+ decision in the coming hours. The bloc is expected to stick with the planned 400k bpd output increase in February. WTI crude is up 0.3% to $76.33 at the moment.
It's all about the yen and bonds for the time being, so keep your eyes peeled on that.
