(Bloomberg) — The dollar slipped against all its major peers Friday, as positive news on U.S.-China trade talks this week spurred a risk-on market tone. The euro and pound climbed to the highest in a week against the greenback. Stocks rallied, boosting global benchmarks to fresh records, while U.S. Treasuries and bonds across Europe were steady in holiday-thinned trading. WHAT TO WATCH:
- Canada CFIB Business Barometer
- Mexico Revised Trade Balance
OVERNIGHT TRADING SESSIONS:
- The Bloomberg Dollar Spot Index’s 1.3% loss in December wiped out all of this year’s earlier gains; the gauge added to the previous session’s losses after China reiterated Thursday that it is in close touch with the U.S. on signing a trade deal
- The pound made the biggest advance during European hours among major peers, climbing for a fourth session to its highest Dec. 20 against the dollar
- The Australian and New Zealand dollars rose to five-month highs; the Aussie was on course for a fourth straight weekly advance in the longest such run since January 2018.
- Japan’s currency strengthened as the dollar-yen pair failed to break above a key resistance level
- Spain’s bonds rallied, but overall moves across Europe were in tight ranges
TOP OVERNIGHT NEWS:
- China’s economic performance improved in December for the first time in eight months, according to a group of earliest-available indicators compiled by Bloomberg.
- Gold is heading for its biggest weekly advance in more than four months as it powers toward its best year since 2010. The precious metal is up 18% this year as central banks reduced interest rates, and the to-and-fro between the U.S. and China over trade boosted demand for havens.
- Banks around the world are unveiling the biggest round of job cuts in four years as they slash costs to weather a slowing economy and adapt to digital technology. This year, more than 50 lenders have announced plans to cut a combined 77,780 jobs, the most since 91,448 in 2015.
- Prime Minister Narendra Modi’s government has set itself on a collision course with those protesting against a new religion-based citizenship law, leading to fears of deepening polarization across the country at a time when the economy is sputtering.
- A Turkish criminal court convicted at least seven staffers at the Sozcu newspaper on terrorism-related charges, the latest such ruling targeting journalists critical of President Recep Tayyip Erdogan and his policies.
VIEWS
- “I doubt that the pound will strengthen significantly in the short-term given there is plenty of uncertainty regarding the negotiations with the EU,” said Jens Peter Sorensen, chief analyst at Danske Bank. “We need some fresh information either on the performance of the U.K. economy or negotiations with the EU,”
- Benchmark U.S. yields are poised to climb in the new year as market participants fade their 2019 pessimism about the economic outlook, according to PineBridge Investments