Market Roundup
- United Kingdom Dec 2018 CBI trends - orders decrease to 8 balance (forecast 6 balance) vs previous 10 balance
- Eurozone Oct 2018 construction output mm decrease to -1.63 % vs previous 2.13 % (revised from 2.04 %)
- United Kingdom Nov 2018 CPI nsa increase to 107 vs previous 106.74
- United Kingdom Nov 2018 PPI core output yy nsa decrease to 2.4 % (forecast 2.3 %) vs previous 2.5 % (revised from 2.4 %)
- United Kingdom Nov 2018 PPI core output mm nsa decrease to 0.1 % (forecast 0.2 %) vs previous 0.4 % (revised from 0.3 %)
- United Kingdom Nov 2018 PPI input prices mm nsa decrease to -2.3 % (forecast -3 %) vs previous 0.8 %
- United Kingdom Nov 2018 RPI index increase to 284.6 vs previous 284.5
- United Kingdom Nov 2018 RPIX yy decrease to 3.1 % vs previous 3.2 %
- United Kingdom Nov 2018 CPI yy decrease to 2.3 % (forecast 2.3 %) vs previous 2.4 %
- United Kingdom Nov 2018 RPI yy decrease to 3.2 % (forecast 3.2 %) vs previous 3.3 %
- United Kingdom Nov 2018 CPI mm increase to 0.2 % (forecast 0.2 %) vs previous 0.1 %
- United Kingdom Nov 2018 Core CPI yy decrease to 1.8 % (forecast 1.8 %) vs previous 1.9 %
- United Kingdom Nov 2018 Core CPI mm increase to 0.3 % (forecast 0.1 %)
- United Kingdom Nov 2018 PPI output prices yy nsa decrease to 3.1 % (forecast 2.9 %) vs previous 3.3 %
- United Kingdom Nov 2018 PPI output prices mm nsa decrease to 0.2 % (forecast -0.1 %) vs previous 0.3 %
- United Kingdom Nov 2018 PPI input prices yy nsa decrease to 5.6 % (forecast 4.6 %) vs previous 10.3 % (revised from 10 %)
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Commerce Department is likely to report that current account deficit widened to $124.3 billion in the third quarter from $101.5 billion in the previous quarter.
- (0830 ET/1330 GMT) The U.S. consumer price index likely decreased 0.2 percent in November after posting a rise of 0.3 percent the previous month, while in the 12 months through November, the CPI is expected to have fallen to 1.9 percent from 2.4 percent in October.
- (0900 ET/1400 GMT) Swiss National Bank releases its Quarterly Bulletin.
- (1000 ET/1500 GMT) National Association of Realtors is likely to report that U.S. existing home sales declined 0.6 percent to 520,000 million units in November from 5.22 million units in October.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending December 14.
Key Events Ahead
- (1400 ET/1900 GMT) The Federal Open Market Committee concludes its two-day meeting on interest rate policy and releases its statement.
- (1430 ET/1930 GMT) Federal Reserve Chairperson Jerome Powell holds a press conference following Federal Open Market Committee meeting.
FX Beat
DXY: The dollar index plunged amid speculation the U.S. Federal Reserve will take a dovish stance towards monetary policy at a meeting later in the day. The greenback against a basket of currencies trades 0.2 percent down at 96.81, having touched a low of 96.70 the day before, its lowest since December 10. FxWirePro's Hourly Dollar Strength Index stood at -77.31 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro rallied to a 9-day peak after an Italian official stated that Italy had struck a deal with the European Union Commission over the 2019 budget. The European currency traded 0.3 percent up at 1.1396, having touched a high of 1.1405 earlier, its highest since Dec. 10. FxWirePro's Hourly Euro Strength Index stood at -3.95 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1442 (December 10 High), a break above targets 1.1472 (November 20 High). On the downside, support is seen at 1.1318 (December 4 Low), a break below could drag it till 1.1267 (November 28 Low).
USD/JPY: The dollar plunged to a near 2-month low as investors cautiously await the Federal Reserve policy meeting decision, where it is expected to raise interest rates by 25bp. However, market speculates the Fed would signal plans to slow its pace of U.S. monetary tightening in 2019. The major was trading 0.2 percent down at 112.35, having hit a low of 112.19 earlier, its lowest since October 29. FxWirePro's Hourly Yen Strength Index stood at 115.86 (Highly Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. existing home sales and Fed interest rate decision. Immediate resistance is located at 113.01 (November 23 High), a break above targets 113.72 (November 30 High. On the downside, support is seen at 111.95 (October 23 Low), a break below could take it lower 111.62 (October 15 Low).
GBP/USD: Sterling held gains near a 1-week peak touched in the previous session, as Prime Minister Theresa May can avoid a no-deal Brexit if she wins the support of a deeply divided parliament for the deal she struck last month with the European Union leaders. The major traded 0.1 percent up at 1.2645, having hit a low of 1.2476 last week; it’s lowest since mid-April 2017. FxWirePro's Hourly Sterling Strength Index stood at 14.78 (Neutral) 1000 GMT. Immediate resistance is located at 1.2705 (December 18 High), a break above could take it near 1.2758 (December 10 High). On the downside, support is seen at 1.2600, a break below targets 1.2560. Against the euro, the pound was trading 0.3 percent down at 90.17 pence, having hit a low of 90.87 last week, it’s lowest since August 29.
USD/CHF: The Swiss franc edged down, retreating from a 1-week peak touched in the previous session, as a surge in the global equity markets boosted investor risk sentiment. The major trades 0.05 percent up at 0.9929, having touched a low of 0.9899 the day before; it’s lowest since December 11. FxWirePro's Hourly Swiss Franc Strength Index stood at -126.22 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9965 (December 12 High) and any break above will take the pair to next level till 1.0008 (December 5 High). The near-term support is around 0.9889 (Dec. 7 Low), and any close below that level will drag it till 0.9847 (Oct. 15 Low).
Equities Recap
European shares advanced, boosted by gains in the banking and the pharmaceutical sectors, while greenback eased amid speculation the Fed will hold off on raising rates any further after its policy meeting later in the day.
The pan-European STOXX 600 index gained 0.1 percent at 340.93 points, while the FTSEurofirst 300 index surged 0.1 percent to 1,345.74 points.
Britain's FTSE 100 trades 0.6 percent up at 6,739.33 points, while mid-cap FTSE 250 gained 0.1 to 17,517.12 points.
Germany's DAX rose 0.2 percent at 10,764.22 points; France's CAC 40 trades 0.3 percent higher at 4,766.43 points.
Commodities Recap
Crude oil prices bounced back by more than 1 percent from multi-month lows, despite persisting oversupply and concern that a slowing global economy would dent demand for fuel. International benchmark Brent crude was trading 1.1 percent up at $56.60 per barrel by 0919 GMT, having hit a low of $55.88 on Tuesday, its lowest since October 2017. U.S. West Texas Intermediate was trading 1.2 percent up at $46.57 a barrel, after falling as low as $45.82 on Tuesday, its lowest since early August 2017.
Gold prices rallied to a more than 5-month peak as investors’ cautiously awaited cues on the rate hike trajectory of the U.S. central bank from its two-day policy meeting. Spot gold was 0.1 percent up at $1,249.91 per ounce by 0926 GMT, having touched a high of $1,251.30 earlier, its highest level since July 11. U.S. gold futures gained 0.1 percent to $1,254.40 per ounce.
Treasuries Recap
The U.S. Treasuries climbed slightly during late afternoon session as investors moved towards safe-haven investments amid a plethora of growing worries over a global economic slowdown ahead of the Fed’s final conclusion on interest rates this year, due late today. The yield on the benchmark 10-year Treasuries slipped nearly 1 basis point to 2.816 percent, the super-long 30-year bond yields also edged nearly 1 basis point higher to 3.070 percent and the yield on the short-term 2-year remained tad lower at 2.650 percent.
The United Kingdom’s gilts rose during the afternoon session, after the country’s consumer price inflation (CPI) fell slightly during the month of November and investors will now keep a close eye on the Bank of England’s (BoE) monetary policy decision, scheduled to be unveiled on December 20 and the third-quarter gross domestic product (GDP) data, due on December 21 by 15:00GMT for further direction in the debt market. The yield on the benchmark 10-year gilts, fell nearly 1-1/2 basis points to 1.269 percent, the super-long 30-year bond yields hovered around 1.789 percent and the yield on the short-term 2-year traded 1-1/2 basis points lower at 0.737 percent
The German bunds remained nearly flat during European session in a muted trading session that witnessed data of little economic significance amid ongoing global economic worries. The German 10-year bond yields, which move inversely to its price, hovered around 0.248 percent, the yield on 30-year note remained tad higher at 0.867 percent and the yield on short-term 2-year remained nearly steady at -0.597 percent.
The Japanese government bonds traded mixed after investors were disappointed by the worse-than-expected trade balance data for the month of November, released early today. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose 3-1/2 basis points to 0.035 percent, the yield on the long-term 30-year note slipped 1 basis point to 0.750 percent and the yield on short-term 2-year plunged nearly 15 basis points to -0.147 percent.
The Australian government bonds were scarred by a fall in investors’ risk appetite as concerns over a slowdown in global economic growth groped market sentiments, pushing participants towards safe-haven buying.The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 3-1/2 basis points to 2.384 percent, the yield on the long-term 30-year bond slumped 3-1/2 basis points to 2.880 percent and the yield on short-term 2-year down nearly 1-1/2 basis points to 1.944 percent.
