Market Roundup
• Fed sees moderate economic growth next year
• ECB holds first policy meeting with Lagarde as president
• Focus on U.S.-China trade ahead of Dec 15 deadline
• US Nov Core CPI (MoM) 0.2%, 0.2% forecast 0.2% previous
• US Nov Core CPI (YoY) 2.3%, 2.3% forecast 2.3% previous
• US Nov Core CPI Index 265.62, 265.01 previous
• US CPI (MoM) 0.3%,0.2% forecast, 0.4% previous
• US CPI (YoY) 2.1%,2.0%,1.8% previous
• US CPI Index, n.s.a 257.21, 257.22 forecast, 257.35 previous
• US CPI Index, s.a 257.94 , 257.27 previous
• Canada Capacity Utilization Rate (Q3) 81.7%, 82.1% forecast, 83.3% previous
• US Cleveland CPI (MoM) 0.2%,0.2% previous
• US Thomson Reuters IPSOS PCSI 62.22, 61.23 previous
• Brazil Thomson Reuters IPSOS PCSI 48.70, 49.89 previous
Looking Ahead - Economic Data (GMT)
• 20:00 Brazil Interest Rate Decision 5.00% previous
• 21:45 New Zealand Oct External Migration & Visitors 1.40% previous
• 21:45 New Zealand Oct FPI (MoM) -0.3% previous
• 21:45 New Zealand Oct Permanent/Long-Term Migration 3,440 previous
• 21:45 New Zealand Visitor Arrivals (MoM) -0.1% previous
• 23:50 Japan Oct Core Machinery Orders (MoM) 0.9% forecast,-2.9% previous
• 23:50 Japan Oct Core Machinery Orders (YoY) -1.8% forecast 5.1% previous
• 23:50 Japan Foreign Bonds Buying-511.1B previous
• 23:50 Japan Foreign Investments in Japanese Stocks 394.0B previous
• 00:00 Australia MI Inflation Expectations 4.0% previous
• 00:01 UK Nov RICS House Price Balance -5% forecast, -5% previous
• 08:30 Switzerland SNB Interest Rate Decision -0.75% previous
• 12:45 Eurozone ECB Interest Rate Decision 0.00% forecast, 0.00% previous
Looking Ahead - Events, Other Releases (GMT)
• 01:30 Japan BOJ Deputy Governor Amamiya Speaks
• N/A U.K. General Election
• 08:30 Switzerland SNB Monetary Policy Assessment
• 09:00 Switzerland SNB Press Conference
• 13:30 Eurozone ECB Press Conference
• 12:45 Eurozone ECB Monetary Policy Statement
• 17:30 Canada BoC Gov Poloz Speaks
Currency Summaries
EUR/USD: The euro strengthened against the U.S. dollar on Wednesday, after the Federal Reserve held interest rates steady and Fed Chair Jerome Powell said a significant, persistent inflation rise would be needed to hike rates. The Fed left the benchmark overnight lending rate in its 1.50% to 1.75% target range, and the U.S. central bank’s rate-setting committee said after its two-day policy meeting that it expects moderate economic growth and low unemployment through next year’s presidential election. The dollar index, which measures the greenback against six other major currencies, was 0.33% lower at 97.095, its lowest since Aug. 9. Immediate resistance can be seen at 1.1158 (Higher BB), an upside break can trigger rise towards 1.1200 (Psychological level).On the downside, immediate support is seen at 1.1088 (9 DMA), a break below could take the pair towards 1.1000 (Psychological level).
GBP/USD: The pound strengthened against the dollar Wednesday in very thin trading, shrugging off an opinion poll for Britain’s election that showed the ruling Conservative Party might fail to win a majority.The narrowing of the Conservative’s lead just a day before the vote has cast some doubt on the expectations of a definitive outcome that have boosted sterling in recent weeks. The British currency was last up 0.2% at $1.3195, not far from the eight-month high above $1.32 it hit on Tuesday. Immediate resistance can be seen at 1.3225 (Higher BB), an upside break can trigger rise towards 1.3268 (27th March high).On the downside, immediate support is seen at 1.3160 (5 DMA), a break below could take the pair towards 1.3075 (11 DMA).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday, as investors awaited clarity on the status of new U.S. tariffs on Chinese goods. U.S. President Donald Trump has days to decide whether to impose tariffs on nearly $160 billion in Chinese consumer goods just weeks before Christmas, a move that could be unwelcome in both the United States and China.The White House’s top economic and trade advisers are expected to meet in coming days with Trump over the decision, though a final decision has not been made. At (1926 GMT), the Canadian dollar was trading 0.18% lower at 1.3181 to the greenback. Immediate resistance can be seen at 1.3207(50 DMA), an upside break can trigger rise towards 1.3241 (Higher BB).On the downside, immediate support is seen at 1.3161 (Daily low), a break below could take the pair towards 1.3100(Psychological level).
USD/JPY: The dollar declined against the Japanese yen on Wednesday, after the U.S. Federal Reserve held interest rates steady and signaled borrowing costs are likely to remain unchanged indefinitely. The Fed expects moderate economic growth and low unemployment to continue through next year’s presidential election, the U.S. central bank’s rate-setting committee said in its policy statement after the end of a two-day meeting on Wednesday. The decision left the benchmark overnight lending rate in its current target range between 1.50% and 1.75%. At 1915 GMT, the dollar was 0.23 percent lower versus the Japanese yen at 108.90. Strong resistance can be seen at 108.88 (Daily high), an upside break can trigger rise towards 109.51(Higher BB).On the downside, immediate support is seen at 108.45 (11 Dec low), a break below could take the pair towards 108.00(Psychological level).
Equities Recap
European shares rose slightly on Wednesday as investors closely watched a pivotal British election on Thursday to decide the fate of Brexit, while attention also focused on central bank meetings in the United States and the euro zone this week.
The UK's benchmark FTSE 100 closed up by 0.03 percent, Germany's Dax ended up by 0.58 percent, and France’s CAC finished the day up by 0.22 percent.
US stocks gained on Wednesday after the Federal Reserve indicated interest rates would remain on hold for some time - a positive for risk assets.
Dow Jones closed down by 0.11 percent, S&P 500 ended down by 0.29 percent, Nasdaq finished the day down by 0.44 percent.
Treasuries Recap
U.S. Treasury yields drifted lower on Wednesday, weighed down by nagging uncertainty over a UK election that could determine the fate of Britain's exit from the European Union, as well as a looming deadline on Sunday that could see U.S. tariffs on Chinese goods take effect.
U.S. 10-year note yields slipped to 1.826%, from 1.831% late on Tuesday. Yields on 30-year bonds were down at 2.241%, from 2.252% on Tuesday.
Commodities Recap
Gold inched higher on Wednesday as investors sought safety from the threat of new U.S. tariffs on Chinese goods due to come into effect on Dec. 15
Spot gold had gained 0.1% to $1,465.88 per ounce by 1234 GMT. U.S. gold futures rose 0.2% to $1,470.30.
Oil prices dropped almost 1% on Wednesday following a surprise build in U.S. crude inventories, and as investors waited to see if a fresh round of tariffs by Washington on Chinese goods would come into force on Sunday.
Brent futures settled at $63.72 per barrel, down 62 cents. West Texas Intermediate crude fell 48 cents to settle at $58.76 per barrel.
