Market Roundup
• US Nov Personal Consumption Real MM, 0.4%, 0.1% previous, 0.0% revised.
• US Nov Personal Income MM, 0.3%, 0.4% forecast, 0.1% previous, 0.0% revised.
• US Nov Consumption, Adjusted MM, 0.6%, 0.5% forecast, 0.3% previous, 0.2% revised.
• US Nov Core PCE Price Index MM, 0.1%, 0.1% forecast, 0.2% previous.
• US Nov Durable Goods, 1.3%, 2.0% forecast, 0.8% previous, 0.4% revised.
• US Nov Durable Ex-Transport, -0.1%, 0.5% forecast, 0.9% previous, 1.3% revised.
• US Dec U Mich Sentiment Final, 95.9, 97.1 forecast, 96.8 previous.
• US Nov News Home Sales-Unit, 0.733 mln, 0.645 mln forecast, 0.658 mln prev, 0.623 mln revised.
• New York Fed pares U.S. 4tr-qtr GDP view to 3.9 pct.
• Atlanta Fed pares U.S. Q4 GDP view to 2.8 percent.
• CA Oct GDP MM, 0.0%, 0.2% forecast, -0.2% previous, 0.2% revised.
• Bitcoin plunges below $13,000, heads for worst week since 2013.
• Mexico peso hits 9-month low on corruption scandal, U.S. tax plan.
• Spain's crisis re-ignited as Catalan separatists win the vote .
• Russia backs gradual, managed the exit from oil cuts with OPEC.
• Tougher North Korea sanctions could hit home, analysts say ahead of UN vote.
Looking Ahead - Economic Data (GMT)
• Dec 26 05:00 Japan Nov All Household Spending YY, 0.5% forecast, 0.0% previous
• Dec 26 05:00 Japan Nov All Household Spending MM, 1.2% forecast, -2.0% previous
• Dec 26 05:00 Japan Nov CPI, Core Nationwide YY, 0.8% forecast, 0.8% previous
• Dec 26 05:00 Japan Nov CPI, Overall
Nationwide, 0.2% previous
• Dec 26 05:00 Japan Dec CPI, Core Tokyo YY, 0.7% forecast, 0.6% previous
• Dec 26 05:00 Japan Nov Unemployment Rate, 2.8% forecast, 2.8% previous
• Dec 26 05:00 Japan Nov Jobs/Applicants Ratio, 1.56 forecast, 1.55 previous
Looking Ahead - Events, Other Releases (GMT)
• Dec 25 23:50 BoJ issues minutes of monetary policy meetings at its Oct. 30-31 policy meeting in Tokyo
• Dec 26 04:00 BoJ’s Kuroda speaks at an event hosted by the Keidanren business lobby in Tokyo
Currency Summaries
EUR/USD is likely to find support at 1.1808 levels and currently trading at 1.1853 levels. The pair has made session high at 1.1855 and hit lows at 1.1825 levels. Euro declined against the dollar on Friday as euro was weighed down after Catalan separatists won a regional election, prompting worries about the possible break-up of the euro zone's fourth-largest economy. Spain’s government had hoped that the Catalan election would strip pro-independence parties of their control of the regional parliament and end their campaign to force a split. But with 96 percent of ballots counted in a vote to elect Catalonia's regional parliament, separatist parties are seen winning 70 seats out of 135. The euro slid 0.3 percent to $1.1835. Europe's common currency though was still up nearly 13 percent so far this year, on track for its best yearly performance in 14 years. The dollar, meanwhile, was little moved by Friday's mixed batch of economic data. Reports showed U.S. consumer spending accelerated in November and shipments of key capital goods orders increased for the 10th straight month. However, household savings dropped last month to their lowest in more than nine years. Low savings suggest the strong pace of consumer spending is unlikely to be sustained unless there is a significant pickup in wage growth. The dollar index, which measures the U.S. currency against a basket of six major rivals, was up 0.2 percent at 93.400. For the year, however, the index was down 8.5 percent.
GBP/USD is supported in the range of 1.3327 levels and currently trading at 1.3371 levels. It reached session high at 1.3388 and dropped to session low at 1.3353 levels. Sterling was little changed against the dollar on Friday after British economic growth for the third quarter was left unchanged and the year-on-year number was revised higher, with traders avoiding big positions before the holiday period. The prospect of further protracted negotiations to seal Britain's exit from the European Union next year has weighed on the currency in December, although the pound is still up in the last two months after gaining about 4 percent in November. Britain’s Office for National Statistics (ONS) said economic growth for the July to September was 0.4 percent, unchanged from the previous reading and in line with the consensus. Year-on-year economic growth was revised up to 1.7 percent from an earlier 1.5 percent. The pound was flat against the dollar at $1.3367 after it had weakened ahead of the data. It was up 0.2 percent against the euro at 88.46 pence after earlier trading flat versus the single currency. The pound has been stuck in a tight trading range against the dollar in December, and analysts said sterling needed a jolt to move out of the range. Some traders believe the pound will rally in 2018 if Britain agrees a Brexit transition deal and talks with the European Union progress faster than expected.
USD/CAD is supported at 1.2695 levels and is trading at 1.2735 levels. It has made session high at 1.2783 and lows at 1.2696 levels. The Canadian dollar was little changed against its U.S. counterpart on Friday as traders were cautious whether the Bank of Canada will hike rates in January or wait until March or April, and whether it will out-tighten the Fed over time. The loonie was little as trade wound down ahead of the Christmas break, with stalled economic growth data for October challenging inflation, trade and retail sales data from earlier in the week that had made a January hike a 50:50 call. The Canadian central bank raised rates twice in 2017, in July and September, while the U.S. Federal Reserve hiked in March, June, and December. Negotiators for Canada, the United States and Mexico will meet in Montreal from Jan. 23-28 for North American Free Trade Agreement talks on thorny subjects such as autos, dispute settlement and an expiry clause, while the Bank of Canada's next rate decision is due on Jan. 17. The Canadian dollar was trading at C$1.2728 to the greenback, slightly stronger on the day. It traded between C$1.2697 and C$1.2797, and was up more than 1 percent on the week.
AUD/USD is supported around 0.7676 levels and currently trading at 0.7716 levels. It hit session high at 0.7720 and made session lows at 0.7706 levels. The Australian dollar hovered near 1-1/2 month peak on Friday against its US counterpart as the dollar turned lower on Tuesday as markets as Australian dollar was boosted by strong iron ore price. Iron ore prices rose overnight, with the most-traded May contract on the Dalian Commodity Exchange at 538 yuan ($81) a tonne, not far from a recent three-month peak of 555 yuan. The dollar edged up against basket of currencies on Friday though it remained on track for weekly losses, while the euro slumped after Catalan vote results indicated a victory for separatists in a blow to Madrid. Traders brushed off Friday's spate of US data on durable goods orders, personal spending, new home sales and consumer sentiment. Collectively, these latest figures pointed to a solid pace of economic expansion in the fourth quarter even before corporate and individual tax cuts go into effect in 2018. The Aussie, which has strengthened the past four days, was up another 0.2 percent to $0.7714. It was on track for a second weekly rise, being up 0.9 percent so far this week. For the week, it is up 0.9 percent, on track for its second consecutive weekly rise.Trading was generally thin ahead of a long Christmas weekend.
Equities Recap
Spanish stocks fell on Friday after Catalan separatists won a slim majority in a regional election, deepening a political crisis which has hurt the economy and caused a business exodus from the region.
UK's benchmark FTSE 100 closed down by 0.2 percent, FTSEurofirst 300 ended the day down by 0.15 percent, Germany's Dax ended down by 0.26 percent, Spain’s IBEX closed down by 1.13 percent and France’s CAC finished the day down by 0.45 percent.
Wall Street's major indexes dipped on Friday in low trading volume before the holiday weekend as several blue-chip stocks slipped, including Nike.
Dow Jones closed down by 0.10 percent, S&P 500 ended down 0.04 percent, Nasdaq finished the day down by 0.07 percent.
Treasuries Recap
U.S. Treasury yields rose modestly on Friday with benchmark 10-year yields staying below their nine-month peak as investors moved to the sidelines before Christmas and ahead of next week's supply of short-to-medium term government debt.
The 10-year Treasury yield was 2.486 percent, up 0.3 basis point on the day. It reached a nine-month high of 2.504 percent on Thursday.
Two-year yield ended the week near its nine-year high at 1.895 percent, up nearly 2 basis points from Thursday.
The five-year yield touched 2.254 percent, which was the highest since April 2011.
Commodities Recap
Gold prices held steady below a two-week high in thin pre-holiday trade on Friday amid firmer equities and a sturdy dollar, remaining on track to log a second consecutive week of gains.
Spot gold was up 0.55 percent at $1,273.61 an ounce, after rising to $1.275.98, the highest since Dec. 5. Bullion was on track to see its strongest weekly performance since mid-October.
U.S. gold futures settled up 0.7 percent at $1,278.80. The futures market will be closed for the Christmas holiday on Monday.
Oil prices rose in light volumes on Friday, steadying near their highest levels since 2015 on pledges from OPEC leader Saudi Arabia and non-OPEC Russia that any exit from crude output cuts would be gradual.
Brent crude futures, the international benchmark for oil prices, ended the session up 35 cents at $65.25 a barrel, its highest close since June 2015.
U.S. West Texas Intermediate (WTI) crude futures settled 11 cents higher at $58.47 a barrel. WTI has also been touching values not seen since mid-2015 over the past two months.
