Market Roundup
- Germany Dec 2018 IFO expectations new decrease to 97.3 (forecast 98.3 ) vs previous 98.7
- Germany Dec 2018 IFO current conditions new decrease to 104.7 (forecast 104.9 ) vs previous 105.4
- Germany Dec 2018 IFO business climate new decrease to 101 (forecast 101.8 ) vs previous 102
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Department of Commerce is expected to report that housing starts decreased to 1.225 million in November from 1.228 million in October.
- (0830 ET/1330 GMT) The U.S. building permits are likely to have decreased to a 1.259 million-unit pace in November from a 1.265 million-unit pace in the previous month.
- (0830 ET/1330 GMT) Statistics Canada releases manufacturing shipments data for the month of October. Manufacturing sales are likely to have increased 0.3 percent after rising 0.2 percent in September.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (0700 ET/1200 GMT) ECB Governing Council Member Jozef Makuch holds a news conference in Bratislava
- N/A The Federal Open Market Committee commences its two-day meeting on interest rate policy.
FX Beat
DXY: The dollar index plunged to a 1-week low as investor's anxiety grew after U.S. President Donald Trump and his top trade adviser criticized the central bank's monetary tightening, The greenback against a basket of currencies trades 0.4 percent down at 96.75, having touched a low of 96.74 earlier, its lowest since December 10. FxWirePro's Hourly Dollar Strength Index stood at -78.92 (Slightly Bearish) by 1000 GMT.
EUR/USD: The euro rose to a 5-day peak after the European Central Bank Governing Council member Olli Rehn stated that the ECB should review its policy framework that was last time adjusted 15 years ago. The European currency traded 0.3 percent up at 1.1385, having touched a low of 1.1270 on Friday, its lowest since Nov. 28. FxWirePro's Hourly Euro Strength Index stood at 50.45 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1401 (November 29 High), a break above targets 1.1442 (December 10 High). On the downside, support is seen at 1.1267 (November 28 Low), a break below could drag it till 1.1215 (November 12 Low).
USD/JPY: The dollar eased to an 8-day low, ahead of the Federal Reserve's two-day policy meeting starting later in the day, where it is widely expected to raise interest rates, however, markets speculate the central bank to signal a pause to its monetary tightening cycle. The major was trading 0.4 percent down at 112.33, having hit a low of 112.28, its lowest since December 10. FxWirePro's Hourly Yen Strength Index stood at 108.08 (Highly Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. building permits and housing starts. 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 112.24 (December 10 Low), a break below could take it lower 111.95 (October 23 Low).
GBP/USD: Sterling rose, extending previous session gains, on news that Britain Prime Minister Theresa May will seek parliamentary approval for her Brexit deal in mid-January. On Monday, PM May pledged to get assurances from the European Union before mid-January to break a deadlock over Britain's fraught efforts to leave the European Union. The major traded 0.4 percent up at 1.2667, having hit a low of 1.2476 on Wednesday; it’s lowest since mid-April 2017. FxWirePro's Hourly Sterling Strength Index stood at 13.31 (Neutral) 1000 GMT. Immediate resistance is located at 1.2686 (Dec. 13 High), a break above could take it near 1.2754. On the downside, support is seen at 1.2560, a break below targets 1.2515. Against the euro, the pound was trading 0.05 percent down at 89.95 pence, having hit a low of 90.87 last week, it’s lowest since August 29.
USD/CHF: The Swiss franc rallied to a 1-week peak, as fears about a slowing global economy sent investors seeking safety in safe-haven assets. The major trades 0.2 percent down at 0.9909, having touched a low of 0.9906 earlier; it’s lowest since December 10. FxWirePro's Hourly Swiss Franc Strength Index stood at -1.56 (Neutral) 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 tumbled, dragged lower by concerns mounting over slowing economic growth and losses in oil stocks.
The pan-European STOXX 600 index plunged 0.3 percent at 342.39 points, while the FTSEurofirst 300 index declined 0.3 percent to 1,352.16 points.
Britain's FTSE 100 trades 0.5 percent down at 6,741.35 points, while mid-cap FTSE 250 gained 0.4 to 17,486.85 points.
Germany's DAX rose 0.3 percent at 10,803.25 points; France's CAC 40 trades 0.1 percent lower at 4,795.31 points.
Commodities Recap
Crude oil prices slumped, weighed down by reports of increasing inventories and forecasts of record U.S. and Russian output. International benchmark Brent crude was trading 1.3 percent down at $57.91 per barrel by 1025 GMT, having hit a low of $57.17 earlier, its lowest since October 2017. U.S. West Texas Intermediate was trading 1.5 percent down at $48.50 a barrel, after falling as low as $47.92, its lowest since early September 2017.
Gold prices surged to a one-week peak, as the dollar came under pressure ahead of a U.S. Federal Reserve meeting, with investors awaiting clarity on the future course of the central bank's monetary tightening. Spot gold was 0.22 percent up at $1,248.59 per ounce by 1035 GMT, having touched a high of $1,249.69 earlier, its highest level since Dec. 10. U.S. gold futures were flat at $1,252.30 per ounce.
Treasuries Recap
The U.S. Treasuries climbed during late afternoon session as investors sought safe-haven investments amid growing worries over a global economic slowdown as equities turned red towards the end of this year ahead of the Fed’s final conclusion on interest rates this year, due tomorrow. The yield on the benchmark 10-year Treasuries slumped nearly 3 basis points to 2.830 percent, the super-long 30-year bond yields also plunged 3 basis points to 3.086 percent and the yield on the short-term 2-year too remained nearly 3 basis points lower at 2.673 percent.
The United Kingdom’s gilt yields came under pressure during the afternoon session, as investors remained jolted by concerns over a global economic slowdown after equity markets took a hit worldwide ahead of Britain’s consumer price inflation (CPI) data for the month of November, scheduled to be released on December 19 by 09:30GMT. The yield on the benchmark 10-year gilts, plunged 3 basis points to 1.235 percent, the super-long 30-year bond yields plunged nearly 4-1/2 basis points to 1.757 percent and the yield on the short-term 2-year traded nearly 2 basis points lower at 0.720 percent
The German bunds jumped during European session after the country’s Ifo business climate index disappointed market investors, amid a muted trading session that witnessed data of little economic significance. The German 10-year bond yields, which move inversely to its price, slumped nearly 3 basis points to 0.233 percent, the yield on the 30-year note fell nearly 2 basis points to 0.866 percent and the yield on short-term 2-year traded 1-1/2 basis points higher -0.611 percent.
The Japanese government bonds continued to gain on the second trading day of the week as investors wait to watch the country’s trade balance data for the month of November, scheduled to be released today by 23:50GMT. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped 3 basis points to 0.030 percent, the yield on the long-term 30-year note suffered 1-1/2 basis points to 0.761 percent and the yield on short-term 2-year plunged 15 basis points to -0.153 percent.
