Market Roundup
• Trump balks at government funding bill, raising shutdown fears.
• BoE says Brexit jitters worsen, sees inflation below target.
• Oil prices tumble to lowest in a year as stock markets drop.
• US 15 Dec, w/e Initial Jobless Claims, 214k, 216k forecast, 206k previous.
• US 15 Dec, w/e Jobless Claims 4-Wk Avg, 222.00k, 224.75k previous
• US 8 Dec, w/e Continued Jobless Claims, 1.688 mln, 1.665 mln forecast, 1.661 mln previous.
• US Dec Philly Fed Business Indx, 9.4, 15.0 forecast, 12.9 previous.
• US Nov Leading Index Chg MM, 0.2%, 0.0% forecast, 0.1% previous, -0.3% revised.
• CA Oct Average Weekly Earnings YY, 2.49%, 1.80% previous.
• CA Oct Wholesale Trade MM, 1.0%, 0.4% forecast, -0.5% previous, -0.7% revised.
• Mexico central bank hikes interest rate by 25 basis points.
Looking Ahead - Economic Data (GMT)
• 20 Dec 23:30 Japan Nov CPI, Core
Nationwide YY, 1.0% forecast, 1.0% previous
• 20 Dec 23:30 Japan Nov CPI, Overall Nationwide, 1.4% previous
• 20 Dec 23:30 Japan Nov CPI Ex Fresh Fd and Eng, 0.4% previous
• 20 Dec 23:30 Japan Nov Nationwide Core CPI YY, 0.1% previous
• 20 Dec 23:30 Japan Nov CPI MM NSA, 0.29% previous
• 20 Dec 23:30 Japan Nov Nationwide Core CPI MM, 0.20% previous
• 20 Dec 23:30 Japan Nov CPI NSA, 102.0 previous
• 20 Dec 23:30 Japan Nov CPI Index Ex Fresh Food, 101.6 previous
• 20 Dec 23:30 Japan Nov CPI Less Food and Energy, 101.2 previous
• 21 Dec 02:00 New Zealand Nov Broad Money NZD, 305,435 mln previous
Looking Ahead - Events, Other Releases (GMT)
• 11:00 ECB Vice President Luis de Guindos speaks at book presentation in Madrid
• 13:30 Fed Philadelphia issues Nonmanufacturing Business Outlook Survey for December' in Philadelphia
• 15:00 Bank of Canada to release its business outlook report in Ottawa
Currency Summaries
EUR/USD: The euro strengthened against dollar on Thursday, as weaker dollar and news that Italy had struck a deal with the European Commission over its contested 2019 budget supported euro. Dollar fell on concerns over future possible interest rate hikes by U.S. policymakers amid slowing growth.The euro was up 0.69percent at $1.1458. The dollar fell 0.6 percent against its rivals to 96.32, after earlier dropping to 96.258, its lowest in a month. On a daily basis, it is set for the biggest percentage drop in six weeks. Immediate resistance can be seen at 1.1486 (100 DMA), an upside break can trigger rise towards 1.1524 (23.6% retracement level).On the downside, immediate support is seen at 1.1415 (50% retracement level) , a break below could take the pair towards 1.1359 (9 DMA).
GBP/USD: Sterling firmed against the dollar on Thursday, as buyers stepped in after the Bank of England kept interest rates on hold, but concern about the Brexit uncertainty kept gains in check. As expected, its nine rate-setters vote unanimously to keep rates at 0.75 percent. The minutes from the central bank's meeting this week showed growing unease about chaos surrounding Britain's divorce from the European Union, which is due in March. The pound was last trading up 0.41 percent up at $1.2661, having earlier reached $1.2695. A weaker dollar also supported the British currency. Immediate resistance can be seen at 1.2706 (21 DMA), an upside break can trigger rise towards 1.2759 (23.6% retracement level).On the downside, immediate support is seen at 1.2607 (9DMA), a break below could take the pair towards 1.2524 (Dec 14th Low).
USD/CAD:The Canadian dollar was little changed against the greenback Thursday, as investors were worried that the slumping price of oil could hurt Canada's economy. Oil prices hit their lowest in more than a year on worries about oversupply and the outlook for energy demand, as a Federal Reserve interest rate increase the day before knocked stock markets.The Canadian dollar was last trading nearly unchanged at 1.3487 to the greenback. The currency earlier matched Tuesday's low of 1.3264, which was its weakest in nearly four months. Immediate resistance can be seen at 1.3400 (Psychological Level), an upside break can trigger rise towards 1.3424 (Higher Bollinger Bands).On the downside, immediate support is seen at 1.3401 (9 DMA), a break below could take the pair towards 1.3338 (21 DMA).
USD/JPY: The dollar weakened to hit three-month low against the Japanese yen on Thursday, after the Federal Reserve signaled fewer interest rate hikes over the next two years and expressed caution about the U.S. economic outlook. The dollar fell to 110.80 yen against the dollar, its lowest since early September, declining for a fifth straight session. It was last down 1.4 percent at 111.27 yen. The dollar index, a measure of the greenback's value against six major currencies, dropped to a one-month low. Strong resistance can be seen at 111.46 (61.8% retracement level), an upside break can trigger rise towards 112.46 (Ichimoku Cloud Top).On the downside, immediate support is seen at 110.80 (200 DMA), a break below could take the pair towards 110.39 (23.6% retracement level).
Equities Recap
A disappointing rate outlook from the U.S. Federal Reserve dragged European shares down sharply on Thursday, with several benchmark indexes hitting two-year lows on worries tighter monetary conditions could weigh on sluggish economic growth.
UK's benchmark FTSE 100 closed down by 0.7 percent, the pan-European FTSEurofirst 300 ended the day down by 1.37 percent, Germany's Dax ended down by 1.4 percent, France’s CAC finished the day down by 1.7 percent.
U.S. stocks tumbled on Thursday as the Federal Reserve's plan to continue its balance-sheet reduction and the threat of a partial government shutdown fueled investor anxieties.
Dow Jones closed down by 1.99 percent, S&P 500 ended down 1.657 percent, Nasdaq finished the day down by 1.64 percent.
Treasuries Recap
U.S. Treasury yields fell to more than eight-month lows on Thursday, and the yield curve flattened, as investors evaluated the Federal Reserve's moves to tighten monetary policy.
Benchmark 10-year yields fell as low as 2.748 percent on Thursday, the lowest since April 4. The yields have fallen from a seven-year high of 3.261 percent on Oct. 9.
The yield curve between two- and 10-year notes flattened to 9 basis points, matching the difference in yields reached on Dec. 4, which was the narrowest since 2007.
Commodities Recap
Gold jumped more than 1 percent on Thursday, boosted by a crumbling dollar and as sliding stocks prompted an influx of safe-haven bids after the U.S. Federal Reserve's monetary policy stance augmented concerns about slowing global economic growth.
Spot gold climbed 1.35 percent to $1,259.56 per ounce at (2200 GMT), having reached $1,265.28 earlier in the session, a peak since July 9.U.S. gold futures settled up 0.9 percent, at 1,267.90 per ounce.
Oil prices fell about 5 percent on Thursday, hitting their lowest level in more than a year on worries about oversupply and the outlook for energy demand as a U.S. interest rate rise knocked stock markets.
Brent crude futures fell $2.89, or 5.05 percent, to settle at $54.35 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell $2.29, or 4.75 percent, to settle at $45.88 a barrel.
