Busy week ahead as US-Iran tensions escalate

January 6, 2020

A stack of data is scheduled for publication this week, while tensions between two old foes come to the fore.

The EURUSD opened and closed flat on Friday in what was a subdued end to the week. The pair opened the day at $1.11686 and remained flat in early trading before falling to lows of $1.11241 mid-session. Late trading saw the euro lift to a high of $1.11794 before coming back slightly. It is now trading at $1.11597. The GBPUSD continues to lose ground, unwinding the strong gains made a week or so ago. The pair began Friday at $1.31323 and edged up to a high of $1.31598 early in the day.  The pound fell from those highs, bottoming-out at $1.30519 mid-session. It struggled for the rest of the day, staying near those lows to round out the week. It is currently trading at $1.30675.

The Dow had a shaky end to the week, in what can be seen as the index taking a breather from the rallies it went through in the lead up to the new year. The index began Friday at 28,894.76 and ticked up to a high of 28,920.30 early in the session. It plunged from those highs, hitting lows of 28,458.66 mid-session before recovering some of those losses late in the day, closing at 28,636.00. The Dax had a torrid end to the week, giving up all the gains it made the previous day. The German index opened at 13,420.33 and edged up to a high of 13,459.14 early. The Dax tumbled from those highs, crashing to lows of 13,120.35 late in the day. It came off those lows before and closed at 13,179.56.

The week ahead shapes up to be a busy one, with the US Non-Farm payrolls data rounding out the week. Away from data and we have seen a rise in tensions between the US and Iran after the US killed a high-ranking military official. The fallout is yet to be fully quantified, with Iran saying it is ready to retaliate. This has resulted in a spike in oil and gold prices, with more volatility expected this week.

Data published today and the most significant this week includes:

Today – Japan Final Manufacturing PMI, China Caixin Services PMI, German Retail Sales, European, German and French Final Services PMIs, Italian and Spanish Services PMIs, European Sentix Investor Confidence UK Final Services PMI, European PPI

Tuesday – European CPI Flash Estimate

Wednesday – US ISM Non-Manufacturing PMI, Australian Building Approvals

Thursday – US ADP Non-Farm Employment Change, Australian Trade Balance

Friday – US Non-Farm Employment Change, Average Hourly Earnings and Unemployment Rate, Australian Retail Sales, Canadian Employment Change and Unemployment Rate, BoC Governor Stephen Poloz speaks