January 21, 2020


Global Commentary

Asian markets were mixed yesterday as sentiment remained positive following the signing of a trade deal between the U.S. and China last week, but some investors chose to take profits after solid gains. In mainland China, the Shanghai Composite gained 0.66% after the People’s Bank of China voted to keep its loan prime rate unchanged, but over in Hong Kong the Hang Seng fell 0.90%. Japan’s Nikkei finished 0.18% higher ahead of the Bank of Japan monetary policy meeting. In Australia, the S&P/ASX 200 climbed 0.22% higher, remaining at record levels. And in South Korea the Kospi outperformed as it advanced 0.54%.

European markets settled lower as investors turned cautious ahead of the annual World Economic Forum conference in Davos, Switzerland. The pan-European Stoxx Europe 600 fell 0.14%, with the CAC 40 in France declining 0.36%, but the DAX in Germany advancing 0.17%. In London the FTSE underperformed, falling 0.30% as investors were cautious ahead of more corporate earnings this week, the Economic Forum in Davos, and upcoming central bank meetings.

In the U.S. markets were closed for a Federal holiday.



Cryptocurrency markets began the day with losses, but by the afternoon in the U.S. they had recovered and were broadly higher. All ten of the top altcoins were higher for the day, although Bitcoin was flat with a gain of less than 0.1%. The best performance was once again from Bitcoin SV, which advanced 19.9%. Bitcoin Cash also made a 4.5% advance, and Stellar, which just moved into the number 10 spot last Friday, was 6.2% higher for the day. Overall 70 of the top 100 cryptocurrencies finished the day with gains.



USD/JPY – The pair gapped lower at the open yesterday as traders were cautious ahead of the Bank of Japan monetary policy meeting. The drop didn’t stick though, and by lunchtime in Tokyo the pair had recovered from the early drop, and was trading back above the 110.00 handle. The 110.25 level is currently acting as resistance for the pair, and there’s another bank of light resistance at the 110.50 level as well. Also of note is an unfilled gap from May. In order to close that gap the pair would need to trade up to the 111.08 level.

GBP/USD – The 1.3000 level continues to act as support for the pair, with yesterday’s action seeing a dip below that level, but an eventual recovery to close at the 1.3010 level. Trading volumes were light as the U.S. was on a holiday, but at this point there’s no economic data due to act as a catalyst for the pair. That could keep it trading in a tight band with the 1.3000 level as support until this Friday, when the U.K. and the U.S. both release PMI data.



Metals – Precious metals moved modestly higher in thin trade as U.S. markets remained closed for a Federal holiday. At the end of the day spot gold was up $3.90, or 0.25%, at $1,560.80 an ounce. Sister metal silver added $0.0555, or 0.31%, to finish at $18.066 an ounce.

Oil – Crude markets fell by the end of the session as traders shrugged off the news of two production facilities in Libya beginning to shut down due to a military blockade. West Texas Intermediate crude finished the session with a $0.515 loss, or 0.87%, ending the day at $58.735 a barrel, while global benchmark Brent crude was down $0.535, or 0.81%, at $65.125 a barrel.



FTSE 100 – London’s benchmark equity index fell 0.30% yesterday as investors turned cautious ahead of the World Economic Forum conference in Davos, more corporate earnings later in the week, and upcoming central bank monetary policy meetings. There was also a lack of direction provided by Wall Street. The Pound was weaker early in the session, but that wasn’t enough to provide support for the market. Tullow Oil was one of the best performers in the index, lifted 0.90% on the back of a rally in crude on news that two Libyan production facilities are shutting down due to a military blockade.

Hang Seng – Hong Kong’s benchmark equity index failed to find support from gains on the Mainland yesterday, ending the day with a 0.90% loss as investors look to take profits ahead of the upcoming Lunar New Year holiday that will keep the market closed all next week. Also weighing on the index was another flare-up of violence in Hong Kong over the weekend, where pro-democracy protestors continue their fight against the Hong Kong government. The biggest loser in the index was insurer AIA group, which fell 2.14%.


Netflix – Shares of the streaming video service have been rising since September, gaining steam in mid-October after the release of better than expected third quarter earnings. The company is now facing its fourth quarter earnings release, due on Tuesday after U.S. markets close. It will be the first quarterly earnings release since the Disney+ and Apple TV+ streaming services came online, so investors will definitely be interested in learning if there’s been a noticeable impact on Netflix from its competitors. It’s also notable that Netflix is up against fairly easy expectations in terms of earnings and subscriber growth. Investors expect the company to report fourth quarter earnings of $0.51 a share, and subscriber growth of 7.6 million new subscribers. Beating those numbers should allow Netflix to continue the upward momentum that’s seen the stock rise over 30% from its September low around $250 a share.

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