Market Roundup
• US Nov Employment Trends, 135.9, 135.6 previous, 136.2 revised.
• US Oct JOLTS Job Openings, 5.996 mln, 6.090 mln forecast, 6.093 mln previous 6.177 mln revised.
• Powell faces early test of policy view as tax cuts near approval.
• New bitcoin futures suggest breakneck price gains to slow.
• WTO losing trade focus, too easy on some developing nations -U.S.
• Explosion rocks New York commuter hub, suspect in custody.
• Tillerson set to meet Trudeau for N. Korea crisis talks, source says.
• EU tells Netanyahu it rejects Trump's Jerusalem move.
• Britain's May hails new optimism in Brexit talks after deal.
• Merkel's conservatives see common ground with Social Democrats on Europe.
• EU-Mercosur talks hit snags, the announcement could be delayed.
Looking Ahead - Economic Data (GMT)
• 11 Dec 23:50 Japan Nov Corp Goods Price MM, 0.2% forecast, 0.3% previous
• 11 Dec 23:50 Japan Nov Corp Goods Price YY, 3.3% forecast, 3.4% previous
• 12 Dec 00:30 Australia Nov NAB Business Conditions, 21 previous
• 12 Dec 00:30 Australia Nov NAB Business Confidence, 8 previous
• 12 Dec 00:30 Australia Q3 Home Price Index, 0.5% forecast, 1.9% previous
Looking Ahead - Events, Other Releases (GMT)
• N/A FOMC starts meeting on interest rates in Washington (Dec 12-13)
• N/A ECB Governing Council meeting in Frankfurt
• 14:00 NY Fed co-hosts conference, "Transforming Communities: Driving and Assessing Investment"
• 19:00 ECB's Draghi speaks in Frankfurt
Currency Summaries
EUR/USD is likely to find support at 1.1760 levels and currently trading at 1.1786 levels. The pair has made session high at 1.1810 and hit lows at 1.1774 levels. The euro edged lower against the greenback on Monday as greenback recovered from its early weakness before the Federal Reserve is expected to hike rates on Wednesday, though concerns about tepid inflation were seen weighing on the greenback. When the U.S. central bank concludes its two-day December policy meeting, investors will be watching for concern about low inflation from Fed officials and any indications that this may make further rate hikes next year less likely. The greenback pared losses as U.S. Treasury yields rose back from morning lows, which were reached on safety buying after an explosion rocked one of New York's busiest commuter hubs. Consumer Price Index (CPI) data on Wednesday will be a key data focus for further clues on price pressures. The dollar index against a basket of six major currencies was last down 0.09 percent at 93.82, after earlier falling as low as 93.666.
GBP/USD is supported in the range of 1.3300 levels and currently trading at 1.3340 levels. It reached session high at 1.3375 and dropped to session low at 1.3340 levels. Sterling declined against the dollar on Monday as investors cautiously added some long bets in a week when Britain and the European Union will sign off on a deal to move to the next stage of Brexit talks. The British currency was choppy in early trading in a potentially big week with a central bank meeting scheduled on Thursday and a raft of top-tier data including retail sales, inflation and jobs data also due this week. Sentiment on sterling has improved slightly and investors have become a tad more hopeful for the short term, though trading has remained choppy since Prime Minister Theresa May managed to break the Brexit deadlock on Friday. Sterling initially recovered some ground against the dollar in the early US session to trade at $1.3360. But gave up most of the ground when cautious investors booked profits after a sharp rally in previous days. Against the euro, sterling weakened by 0.4 percent to 88.31 pence in the last New York trading on Monday.
USD/CAD is supported at 1.2800 levels and is trading at 1.2846 levels. It has made session high at 1.2866 and lows at 1.2837 levels. The Canadian dollar was little changed against its U.S. counterpart on Monday as investors turned attention to both a Federal Reserve interest rate decision and a speech by Bank of Canada Governor Stephen Poloz later in the week. The Canadian currency lost 1.3 percent last week after the central bank struck a more dovish tone than investors had expected as it left its benchmark interest rate steady at 1 percent. Poloz will discuss on Thursday the issues that keep him awake at night. The Fed is widely expected to raise interest rates at a two-day policy meeting that will end on Wednesday, and is seen possibly tightening two or three times in 2018. The price of oil, one of Canada's major exports, edged higher as investors weighed Organization of the Petroleum Exporting Countries-led output cuts and rising U.S. drilling activity. The Canadian dollar was little changed at C$1.2852 to the greenback, or 77.78 U.S. cents. The currency traded in a narrow range of C$1.2832 to C$1.2868. On Friday, it touched its weakest in one week at C$1.2880.
AUD/USD is supported around 0.7499 levels and currently trading at 0.7530 levels. It hit session high at 0.7544 and made session lows at 0.7520 levels. The Australian dollar recovered some ground against its US counterpart on Monday as investors waited anxiously to see what the Federal Reserve would project for future U.S. rate rises at its policy meeting this week. The Aussie was stuck at $0.7515 and just a whisker above last week's six-month trough of $0.7501. A break of that support would open the way to $0.7374, a low from June. The currency has been on the defensive since data showed Australian consumer spending almost ground to a halt last quarter, underlining the case against a rise in domestic interest rates anytime soon. Futures markets 0#YIB: imply no chance at all of the Reserve Bank of Australia (RBA) moving before May, and only a 60 percent probability of a hike by year-end. In contrast, the Federal Reserve is considered certain to raise U.S. rates on Wednesday and likely stick to projections for three more hikes next year. Two increases would take U.S. rates above those in Australia for the first time since 2000.
Equities Recap
Persistent weakness in tech stocks outweighed strong financials on Monday, while a climb in the euro dented eurozone markets, leaving the pan-European STOXX 600 index 0.1 percent lower.
UK's benchmark FTSE 100 closed up by 0.7 percent, FTSEurofirst 300 ended the day down by 0.04 percent, Germany's Dax ended down by 0.3 percent, and France’s CAC finished the day down by 0.2 percent.
Wall Street's main indexes closed higher on Monday, helped by the technology and energy sectors as oil prices rose and investors waited for an expected U.S. Federal Reserve rate hike later in the week.
Dow Jones closed up by 0.23 percent, S&P 500 ended up 0.32 percent, Nasdaq finished the day up by 0.51 percent.
Treasuries Recap
U.S. Treasury debt prices were little changed on Monday after rallying earlier in the session on safe-haven buying following an explosion in midtown Manhattan which New York Mayor Bill de Blasio described as an attempted terrorist attack.
U.S. benchmark 10-year Treasury note yields fell as low as 2.35 percent on safe-haven demand before they retraced back to 2.386 percent by afternoon trading.
U.S. 30-year bond yields were last at 2.773 percent, slightly down from 2.775 percent late on Friday.
Three-year note yields rose to 1.940 percent, up from Friday's 1.915 percent.
Commodities Recap
Gold steadied below $1,250 an ounce on Monday after its biggest weekly drop in more than six months as markets anticipated an interest rate hike from the U.S. Federal Reserve this week.
Spot gold was down 0.2 percent at $1,244.77 per ounce by 1:58 p.m. EST (1858 GMT), while U.S. gold futures for February delivery settled down $1.50, or 0.1 percent, at $1,246.90 per ounce.
Oil prices rose on Monday, overcoming declines early in the session, after a North Sea pipeline shut for repairs and investors focused on commodities following an explosion in New York.
Brent crude futures settled up $1.29, or about 2 percent, at $64.69 a barrel. U.S. West Texas Intermediate (WTI) crude futures settled at $57.99 a barrel, 63 cents or 1 percent above their last settlement.
