Market Roundup
- US December wholesale inventories fall 0.1% vs 0.2% forecast, wholesale sales -0.3 vs -0.4 forecast.
- US JOLTS job openings 5.607 million in December vs 5.4 million forecast.
- Yellen faces tough sell on Fed rate hikes in Congress, may face heat on Fed transparency.
- Former Fed member Kocherlakota: FOMC should take fed funds rate negative.
- DB debt buyback talk (FT) lifts equities, stalls UST bid.
- JPMorgan forecasts ECB to cut deposit rate as low as -0.7 percent this year.
- European shares hit lowest since Sept 2013 as banks extend falls.
- Japan monitoring for speculative factors behind yen's rise - MOF.
- German output drop raises doubts about growth, I/P plunges by biggest rate since Aug '14.
- Gold stays near 7-mos high as stocks remain volatile, Silver, platinum also near multi-month peaks.
Looking Ahead - Economic Data (GMT)
- --:-- China New Yuan Loans* Jan forecast 1800.0b, 597.8b-previous
- --:-- China Outstanding Loan Growth* Jan forecast 14.4%, 14.3%- previous
- 21:45 New Zealand Election Card Retail Sales MM Jan -0.2%- previous
- 21:45 New Zealand Election Card Retail Sales YY*Jan 5.3%- previous
- 23:30 Australia Consumer Sentiment* Feb -3.5%- previous
- 00:00 Australia HIA New Home Sales m/m* Dec -2.7%- previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.1130 levels and currently trading at 1.1293 levels. The pair has made session high at 1.1337 and hit lows at 1.1257 levels. The U.S. dollar fell sharply against euro on Tuesday, as worries over global economic growth pushed investors into safe-haven currencies like the Japanese yen and Swiss franc. Risk appetite waned on Tuesday as a selloff in major equity markets worldwide, along with falling oil prices shook confidence in the greenback. Falling oil prices and uncertainty about Federal Reserve's interest rate hikes this year has made investors lose confidence in the dollar. The U.S. dollar index, which measures the basket of currencies against US dollar, fell to 95.663, its lowest since Oct. 22 on Tuesday. The euro rose more than 1.0 percent against the U.S. dollar on Tuesday to $1.1337, its highest since Oct. 22 and was trading around $1.1292 late Tuesday, up 0.85 percent.
GBP/USD is supported in the range of 1.4380 and currently trading at 1.4464 levels. It reached session high at 1.4513 and hit low at 1.4380 levels. The British pound declined against US dollar on Tuesday as worries over global economic growth triggered selloff in global stocks sending investors to safe heaven assets like Japanese yen and Swiss franc. Fears the global economy could slip into recession and worries about banks battered share markets for the third straight day, helped Yen and Swiss franc more than 5 percent since the start of last week as investors sought a safe haven. On the data front, Britain's trade deficit worsened in the fourth quarter and likely dragged on economic growth, despite improving in the month of December, official data showed on Tuesday. The currency's strongest level of the session was $1.4494, while its weakest level was $1.3380.
USD/CAD is supported at 1.3727 levels and is trading at 1.3879 levels. It has made session high at 1.3959 and lows at 1.3782 levels. The Canadian dollar firmed against against U.S. counterpart on Tuesday as oil prices stabilized, although it extended losses against safe-haven currencies on equities turmoil overseas. Oil prices slipped 7 percent on Tuesday as equity markets remained weak, forecasts called for record high U.S. crude stockpiles to grow more, and the latest global energy demand outlooks did not look strong enough to eliminate the excess glut. The currency's strongest level of the session was C$1.3854, while its weakest level was C$1.3959. Sunday's talks between Saudi Oil Minister and his Venezuelan counterpart came out with no tangible signs of progress on coordinated oil production cuts between OPEC and non-OPEC suppliers. The currency's strongest level of the session was C$1.3786, while its weakest level was C$1.3959.
AUD/USD is supported around 0.6960 levels and currently trading at 0.7066 levels. It hit session high at 0.7096 and made session lows at 0.6971 levels. The Australian dollar lost ground against dollar on Tuesday as a selloff in global stocks sent investors to safe-haven assets such as the yen and Swiss franc. Adding to worries about global growth and sliding commodity prices, investors became concerned about European bank debt. Demand for higher-rated sovereign debt sent Australian government bond futures to multi-month highs, with the three-year bond contract up 12 ticks at 98.270. Heavy buying of the yen dealt a blow to the Aussie which skidded a full yen under 81. A week ago it had been up above 86 yen and was now pulling closer to 79.17, a level last seen mid-2012. The Australian dollar slipped to $0.0.7004, from $0.7098 early, pulling away from a one-month top of $0.7242 touched last week.
Equities Recap
European shares fell for a seventh consecutive session on Tuesday to touch their lowest level in more than two years as worries about the impact on banks of sustained low interest rates kept sentiment fragile.
UK's benchmark FTSE 100 closed down by 0.9 percent, the pan-European FTSEurofirst 300 ended the day down by 1.42 percent, Germany's Dax closed down at 0.83 percent, and France's CAC finished the day down by 1.5 percent.
Wall Street was lower on Tuesday, after bouncing between gains and losses in a choppy session, as the beaten-down energy and financials stocks fell further and a rebound in technology faded.
Dow Jones closed down by 0.05 percent, S&P 500 ended the day down by 0.06 percent, Nasdaq finished the day down by 0.36 percent.
Treasuries Recap
U.S. Treasuries prices rose on Tuesday as investors concerned about slowing global growth continued to shun stocks, adding interest in safe-haven U.S. government debt.
Benchmark 10-year notes were last up 2/32 in price to yield 1.739 percent, from 1.735 percent late on Monday.
The 30-year bond was last up 2/32 in price to yield 2.567 percent, from 2.56 percent on Monday.
Commodities Recap
Gold turned higher on Tuesday but hovered beneath the previous session's 7-1/2-month high of $1,200 an ounce, buoyed by risk aversion as equities remained volatile and the dollar extended losses.
Spot gold was up 0.1 percent at $1,192.30 an ounce at 2:12 p.m. EST (1912 GMT), below the session high of $1,198.90 and Monday's 7-1/2-month peak at $1,200.60 on Monday.
U.S. gold for April delivery settled up 70 cents at $1,198.60 an ounce.
Oil prices declined for fourth consecutive straight session on Tuesday and reached close to 12-1/2-year lows hit last month, after weak demand forecasts from the U.S. government and the western world's energy watchdog, while weak equities also pressured prices.
Brent crude oil settled down $2.56, or 7.8 percent, at $30.32 a barrel. It was the largest drop in a day for Brent since Sept. 1.
U.S. crude lost $1.75, or 5.9 percent, to finish at $27.94. It fell to $26.19 last week, its lowest since May 2003.
