Monday Morning Briefing: Asia Quiet, Dollar Rebounds

Your Monday morning briefing: Crude drops, gold gains. 

The Bund Bull stands in Shanghai, China. (Photographer: Qilai Shen/Bloomberg)
The Bund Bull stands in Shanghai, China. (Photographer: Qilai Shen/Bloomberg)

Asian stocks kick-started the trading week on a lackluster note despite strong cues from the U.S. Japanese indices are shut on account of a holiday.

The dollar gained for the second day after snapping a three-day losing streak on Friday. Oil fell for the first time in four days while gold rose.

Brexit Worries

The pound dropped for the second session after British Prime Minister Theresa May defending her government’s plan to leave the European Union. In an interview with Sky News, May indicated that regaining control of immigration and lawmaking were her top priorities, even if it means quitting Europe’s single market.

We will be able to have control of our borders, control of our laws, but we still want the best possible deal for U.K. companies to be able to trade in and within the EU and European companies to operate and trade in the U.K.
Theresa May, Prime Minister, U.K.
Monday Morning Briefing: Asia Quiet, Dollar Rebounds

So Close Yet So Far

U.S. equity markets posted fresh record highs on Friday after strong economic data helped extend the post Trump election rally. The Dow Jones Industrial Average came within one point of scaling the 20,000 mark, hitting an intraday high of 19,999.63, before closing 30 points below the milestone. The S&P 500 Index and the NASDAQ Composite Index gained over 0.5 percent each and registered lifetime highs.

The U.S. economy added more than two million jobs for the sixth straight year. Payrolls increased 156,000 in December following an increase of 204,000 in November, according to data from the U.S. Department of Labor on Friday.

The rate of unemployment remained unchanged at 4.7 percent while wages increased the most since 2009.

Oil Falls, Gold Rises

Oil snapped a three-day rally after a rise in U.S. drilling count offset production cuts initiated by members of OPEC (Organization of Petroleum Exporting Countries) and other major producers. U.S. drillers added rigs for the tenth straight week to the highest level in almost a year, according to data from Baker Hughes Inc.

Saudi Arabia is leading the OPEC nations in reducing supply, the group’s Secretary-General Mohammad Barkindo said in an interview to Kuwait’s official news agency.

West Texas Intermediate crude dropped below the $54 per barrel mark after gaining 3.2 percent in the previous three sessions.

Gold gained 0.2 percent to rise above the $1,175 per ounce mark, after dropping 0.6 percent on Friday.

Quiet Start?

The SGX Nifty Index remained largely unchanged at 8,273 as of 7:05 a.m., indicating a flat start for Indian equities. Benchmark indices gained as much as 0.8 percent in the first trading week of 2017.

Investors will digest government's advance estimates for the country's gross domestic product (GDP). The Central Statistical Organisation on Friday forecast that the GDP will grow 7.1 percent in the current fiscal year despite the demonetisation drive. However, many economists do not buy into the government's estimates, saying that there is further downside in store.

Also Read: Growth Above 7% This Year, Says Government. Unlikely, Say Economists