Market Roundup
• US Wholesale Inventories (MoM) 1.1%, 0.9% previous
• US Oct JOLTs Job Openings 6.652M, 6.300M forecast,6.436M previous
• US Oct Wholesale Trade Sales (MoM) 1.8%, 0.8% forecast, 0.1% previous
• US Gasoline Inventories 4.222M,2.271M forecast, 3.491M previous
• Canada BoC Interest Rate Decision0.25%, 0.25% forecast, 0.25% previous
• US Crude Oil Inventories15.189M, -1.424M forecast, -0.679M previous
Looking Ahead Economic Data
•23:50 Japan Foreign Investments in Japanese Stocks 457.7B previous
•23:50 Japan BSI Large Manufacturing Conditions (Q4) 0.1 previous
•23:50 Japan Nov PPI (MoM) -0.2% previous
•23:50 Japan Nov PPI (YoY) -2.2% forecast, -2.1% previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD: The euro strengthened on Wednesday as progress in combating the COVID-19 pandemic boosted risk appetite and prospects of more U.S. fiscal stimulus weakened the U.S. currency. The dollar's losses have been most severe versus the euro in recent weeks as economic activity data suggest Europe is outperforming the United States in recent weeks. The dollar weakened 0.2% against the euro to $1.2122 and is heading for an annual loss of 8% against the common currency, its largest since 2017. Immediate resistance can be seen at 1.2123(38.2% fib), an upside break can trigger rise towards 1.2166 (23.6% fib).On the downside, immediate support is seen at 1.2089 (50% fib), a break below could take the pair towards 1.2050 (61.8%fib).
GBP/USD: Sterling rose against dollar on Wednesday after three days of losses as British Prime Minister Boris Johnson headed to Brussels for dinner with the president of the European Commission in a last-ditch attempt to avoid a no-deal Brexit. With only weeks to the end of the Brexit transition period on Dec. 31, traders are hopeful that a face-to-face meeting between Johnson and Commission chief Ursula von der Leyen can break the deadlock. Sterling rose 0.7% against the dollar on Wednesday in volatile trading to $1.3452. Immediate resistance can be seen at 1.3377(38.2% fib), an upside break can trigger rise towards 1.3461(23.6%fib).On the downside, immediate support is seen at 1.3313 50%fib), a break below could take the pair towards 1.3238(61.8%fib).
USD/CAD: The Canadian dollar was little changed against its U.S. counterpart on Wednesday as Wall Street pulled back from record highs and the Bank of Canada gave less attention to recent gains for the currency than some investors expected. Canada’s central bank left its key interest rate unchanged at 0.25%, as expected, and said it would maintain its current policy of quantitative easing, in a regular rate decision statement. The Canadian dollar was trading nearly unchanged at 1.2820 to the greenback, or 78.00 U.S. cents, having traded in a range of 1.2769 to 1.2833. On Tuesday, the loonie touched its strongest intraday level since May 2018 at 1.2763. Immediate resistance can be seen at 1.2835 (38.2%fib), an upside break can trigger rise towards 1.2983(50%fib).On the downside, immediate support is seen at 1.2758 (23.6%fib), a break below could take the pair towards 1.2700 (Psychological level).
USD/JPY: The dollar edged high against the Japanese yen on Wednesday as signs of progress in beating back the COVID-19 pandemic sapped demand for the safest assets. Investors are also tracking negotiations over U.S. coronavirus aid, with the Trump administration proposing a $916 billion package on Tuesday after congressional Democrats rejected a slimmer plan. Investors also looked forward to the U.S. Federal Reserve two-day policy meeting next week for clues on the direction of monetary policy. Strong resistance can be seen at 104.29 (50%fib), an upside break can trigger rise towards 104.63 (61.8%fib).On the downside, immediate support is seen at 103.98 (38.2%fib), a break below could take the pair towards 103.56 (23.6%fib).
Equities Recap
European shares on Wednesday ended off session highs as euphoria over a potential U.S. fiscal stimulus and vaccine optimism subsided, with investors awaiting the outcome of make-or-break Brexit trade talks.
The UK's benchmark FTSE 100 closed up by 0.06 percent, Germany's Dax ended up by 0.47 percent, and France’s CAC finished the day down by 0.25 percent.
U.S. stocks retreated on Wednesday from record levels as investors grew discouraged over the halting progress of economic stimulus talks, while a drop in Facebook shares provided an additional drag.
Dow Jones closed down by 0.34 percent, S&P 500 ended down by 0.79percent, Nasdaq settled down by 1.94 percent.
Treasuries Recap
Longer-term U.S. Treasury yields rose Wednesday on hopes of more domestic fiscal stimulus and that vaccines would spark an economic recovery.
The benchmark 10-year yield was up 1.5 basis points at 0.9278% in afternoon trading, off its high of 0.959% for the day as major equity market indexes eased.
Commodities Recap
Gold slid 1% on Wednesday, falling back from the previous session's two-week peak as optimism over COVID-19 vaccine developments led investors to opt for riskier assets such as equities.
Spot gold was down 0.7% at $1,857.70 per ounce by 1216 GMT, having earlier fallen as low as $1,851.31. On Tuesday it hit its highest since Nov. 23 at $1,875.07.
Oil prices settled little changed on Wednesday as investors weighed an unexpected jump in U.S. crude stockpiles against optimism that a fast rollout of a coronavirus vaccine would fuel a recovery in global oil demand.
Brent crude rose 2 cents to settle at $48.86 a barrel. U.S. West Texas Intermediate (WTI) crude fell 8 cents, or 0.2%, to settle at $45.52 a barrel.
