Market Roundup
- EUR/USD 0.25%, USD/JPY 0.07%, GBP/USD -0.09%, EUR/GBP 0.33%
- DXY -0.15%, DAX -0.09%, FTSE 0.19%, Brent 0.36%, Gold 0.17%
- Germany Ifo Business Climate Dec, 117.2, 117.5 forecast, 117.5 previous
- Germany Ifo Current Conditions Dec, 125.4, 124.7 forecast, 124.4 previous
- Germany Ifo Expectations Dec, 109.5, 110.7 forecast, 111.0 previous
- EZ Labour Costs YY Q3, 1.6%, 1.8% previous
- EZ Wages In Euro Zone Q3, 1.6%, 2.0% previous
- Canadian small business lending slows in October –PayNet
- Swiss government sees economy gathering pace as franc weakens
- Oil rises towards $64 on UK pipeline outage, US supply weighs
- Gold edges higher as dollar wilts ahead of US tax vote
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Department of Commerce is expected to report that housing starts decreased to 1.25 million units in November from 1.29 million units in October.
- (0830 ET/1330 GMT) The U.S. building permits are likely to have decreased to a 1.278 million-unit pace in November from a 1.297 million-unit pace in October.
- (0830 ET/1330 GMT) The U.S. Commerce Department is likely to report that current account deficit narrowed to $117.2 billion in the third quarter from $123.1 billion in the previous quarter.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
- (1645 ET/2145 GMT)The Statistics New Zealand will release visitor arrivals report for the month of November. The indicator posted an annualized gain of 3.9 percent in the prior month.
- (1645 ET/2145 GMT) The Statistics New Zealand releases current account data for the third quarter. The economy recorded a deficit of $0.62 billion in the previous quarter.
- (1645 ET/2145 GMT) The Statistics New Zealand releases its trade balance data for the month of November. The economy posted an annual trade deficit of $2.986 billion in October.
- (1830 ET/2330 GMT) The Melbourne Institute will release Australia's Westpac Leading Index for the month of November. The index edged up 0.1 percent in the previous month.
Key Events Ahead
- (1045 ET/1545 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.63 bn)
- (1310 ET/1810 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari is scheduled to participate in a moderated question-and-answer session before an event hosted by Lambda Alpha International-Minnesota Chapter, in Roseville, Minnesota.
FX Beat
DXY: The dollar index slumped despite optimism over the passage of a long-awaited US tax reform legislation. The greenback against a basket of currencies traded 0.1 percent down at 93.58, having touched a low of 93.28 on Thursday, its lowest since Dec. 6. FxWirePro's Hourly Dollar Strength Index stood at -31.07 (Neutral) by 1100 GMT.
EUR/USD: The euro rose above the 1.1800 handle as the greenback eased amid renewed uncertainty over the progress of a long-awaited US tax-cut legislation. The European currency traded 0.3 percent up at 1.1810, having touched a high of 1.1862 on Thursday, its highest since Dec. 5. FxWirePro's Hourly Euro Strength Index stood at 54.85 (Bullish) by 1100 GMT. The pair is facing strong resistance at 1.1860 (trend line joining 1.19612 and 1.19404) and any convincing break above will take it to next level till 1.1900/19612 (Nov 27th 2017 high). On the lower side, major support is around 1.1700 and any break below will drag it to next level till 1.1660/1.1600.
USD/JPY: The dollar rose as expectations of the Bank of Japan to stand pat at its monetary policy meeting on Thursday undermined the sentiment around the Japanese yen. The major was trading 0.1 percent up at 112.61, having hit a low of 112.03 on Friday, its lowest since Dec. 6. FxWirePro's Hourly Yen Strength Index stood at -55.47 (Bearish) by 1100 GMT. On the lower side, any close below 111 confirms minor weakness, a decline till 110/108.15 likely. Any convincing close above 114 will take the pair to next level till 114.73/115.
GBP/USD: Sterling consolidated within a narrow range as investors remained cautious about risks surrounding Brexit negotiations for the year ahead despite progress in the talks last week. The major traded flat at 1.3378, having hit a low of 1.3301 on Friday; it’s lowest since Nov. 28. FxWirePro's Hourly Sterling Strength Index stood at -95.83 (Highly Bearish) by 1100 GMT. On the lower side, near term support is around 1.3300 and any break below will drag the pair to next level till 1.3225/ 1.3175. The near term resistance is around 1.3382 and any break above will take it to next level till 1.3435/1.3470. Against the euro, the pound was trading 0.3 percent down at 88.29 pence, having hit a low of 88.59 pence on Friday, it’s lowest since Dec. 5.
USD/CHF: The Swiss franc rose, extending previous session gains as the greenback slumped as investors took a cautious view over how much tax reforms, if passed, would boost the U.S. economy. The major trades 0.1 percent down at 0.9843, having touched a low of 0.9839 the day before, it’s lowest since Dec. 5. FxWirePro's Hourly Swiss Franc Strength Index stood at 75.22 (Slightly Bullish) by 1100 GMT. On the higher side, near term resistance is around 0.99220 (trend line joining 0.9977 and 0.99345) and any break above will take the pair to next level till 0.9977 (Dec 8th 2017 high)/1.000. The near term support is around 0.9835 and any violation below that level will drag it to next level till 0.9810 (200 – day EMA)/0.9770/0.9735.
AUD/USD: The Australian dollar held firm below the 0.7700 handle as the minutes from the Reserve Bank of Australia's December meeting reiterated that an appreciating exchange rate would pose a significant risk to expected pickup in inflation and the economy. The Aussie trades 0.3 percent up at 0.7679, having hit a high of 0.7694 on Friday; it’s highest since Nov. 10. FxWirePro's Hourly Aussie Strength Index stood at 132.88 (Highly Bullish) by 1100 GMT. On the lower side, the near term support is around 0.7500 and any convincing break below will drag the pair till 0.7435/0.7380. The near term resistance is around 0.7681 (233- day MA) and any convincing break above targets 0.7730/0.7780.
Equities Recap
European stocks rose to multi-week highs, while the greenback slumped amid renewed uncertainty over the progress of the US tax-cut legislation.
The pan-European STOXX 600 index advanced 0.05 percent to 392.78 points, while the FTSEurofirst 300 index rallied 0.05 percent to 1,546.40 points.
Britain's FTSE 100 trades 0.2 percent higher at 7,554.30 points, while mid-cap FTSE 250 gained 0.5 percent to 20,360.85 points.
Germany's DAX eased 0.1 percent at 13,298.59 points; France's CAC 40 trades 0.1 percent up at 5,413.59 points.
Commodities Recap
Crude oil prices edged up, extending previous session gains, as the Forties pipeline outage in the North Sea and OPEC-led supply cuts supported prices. International benchmark Brent crude was trading 0.3 percent up at $63.62 per barrel by 1055 GMT, having hit a high of $65.80 last week, its highest since Jul. 2015. U.S. West Texas Intermediate was trading 0.3 percent higher at $57.47 a barrel, after rising as high as $58.53 last week, its highest since Dec. 1.
Gold prices nudged higher amid continuous weakness in the dollar, with investors considering the potential impact of comprehensive tax legislation in the United States that Congress appeared all but certain to pass this week. Spot gold was 0.1 percent up at $1,263.37 an ounce as of 1057 GMT, after touching its highest since Dec. 7 at $1,263.85 on Monday. U.S. gold futures rose 0.1 percent to $1,267 an ounce.
Treasuries Recap
The U.S. Treasuries flattened, in a muted trading session that witnessed data of economic significance ahead of the long year-end holidays. The yield on the benchmark 10-year Treasuries remained flat at 2.39 percent, the super-long 30-year bond yields fell 1/2 basis point to 2.74 percent and the yield on the short-term 2-year hovered around 1.83 percent.
The UK gilts traded downside as investors wait to watch Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held on December 20. The yield on the benchmark 10-year gilts, rose nearly 1 basis point to 1.15 percent, the super-long 30-year bond yields also climbed 1 basis point to 1.72 percent and the yield on the short-term 2-year too traded 1 basis point higher at 0.45 percent.
The German bunds traded flat after the country’s Ifo business climate index slightly missed market expectations during the month of December. The German 10-year bond yields, which move inversely to its price, remained flat at 0.31 percent, the yield on 30-year note jumped 2 basis points to 1.13 percent and the yield on short-term 2-year traded 1 basis point higher at -0.69 percent.
The New Zealand government bonds closed mixed as investors wait to watch the country’s GlobalDairyTrade price auction, scheduled to be held later today and the third-quarter gross domestic product (GDP) data, due on December 20 at 21:45GMT for further direction in the debt market. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.73 percent, the yield on 20-year note rose 1-1/2 basis points to 3.28 percent and the yield on short-term 2-year ended 1-1/2 basis points lower at 1.93 percent.
The Japanese government bonds traded nearly as investors remain remained sidelined in any major deal ahead of the last Bank of Japan’s monetary policy meeting of 2017. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.041 percent, the yield on new long-term 40-year remained steady 0.962 percent and the yield on short-term 2-year stood flat at -0.148 percent.
The Australian government bonds slumped following December Reserve Bank of Australia meeting minutes which displayed confidence in unemployment and inflation going forward. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 2.563 percent, the yield on the long-term 30-year note surged 2 basis points to 3.284 percent and the yield on short-term 2-year climbed over 2 basis points to 1.939 percent.
