S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico MarketThe Australian Dollar (AUD) has been the top G10 performer overnight, boosted by a robust December jobs report showing 65.2k positions added and unemployment falling to 4.1%, alongside improved global risk sentiment, MUFG’s FX analyst Lee Hardman reports.
Labor market strength fuels hawkish RBA bets
“The Australian dollar has been the best performing G10 currency overnight extending its outperformance at the start of this year. The Australian’s dollar’s upward momentum has been reinforced by the release of stronger than expected domestic labour market data, and the broader improvement in global investor risk sentiment after President Trump dropped his threat to use military action to take control of Greenland and/or impose tariffs on imports from fellow NATO countries including the Germany, France and the UK. The positive development came after a meeting between President Trump and NATO Secretary General Mark Rutte at the World Economic Forum in Davos.”
“Market participants have expressed initial relief that the threat of US military action or tariffs is off the table at least for now, although will remain wary that they could return if talks don’t progress as President Trump desires in the coming weeks and months. Avoiding a tit for tat trade war is a positive development for the global growth outlook and supports our outlook for stronger growth this year. Commodity currencies such as the Australian dollar and Latam FX have already outperformed at the start of this year in anticipation of stronger global growth and rising commodity prices.”
“At the same time, the Australian dollar has been boosted overnight by the hawkish repricing of RBA policy expectations. The 2-year Australian government bond yield has jumped higher by around 9bps following the release of the latest labour market report from Australia. The report revealed that employment increased strongly by 65.2k in December, which was the strongest monthly increase since April of last year. Stronger employment growth helped to lower the unemployment rate by 0.2 percentage point to 4.1%. After peaking at 4.4% in September, the unemployment has almost fully reversed the move higher in the first nine months of last year. A development that will add to the RBA’s concerns over the risk of more persistent inflation in Australia stemming from the tight labour market.”
