Market Roundup
- United Kingdom Nov 2018 retail sales ex-fuel yy increase to 3.8 % (forecast 2.3 %) vs previous 2.8 % (revised from 2.7 %)
- United Kingdom Nov 2018 retail sales yy increase to 3.6 % (forecast 1.9 %) vs previous 2.4 % (revised from 2.2 %)
- United Kingdom Nov 2018 retail sales mm increase to 1.4 % (forecast 0.3 %) vs previous -0.4 % (revised from -0.5 %)
- United Kingdom Nov 2018 retail sales ex-fuel mm increase to 1.2 % (forecast 0.2 %) vs previous -0.4 %
- Eurozone Oct 2018 current account sa, eur increase to 22.993 eur vs previous 17.6 eur (revised from 16.9 eur)
- Italy Nov 2018 producer prices yy decrease to 4.5 % vs previous 5.8 %
- Italy Nov 2018 producer prices mm decrease to -0.7 % vs previous 1.3 %
- Eurozone Oct 2018 current account nsa, eur increase to 26.6 eur vs previous 24.7 eur (revised from 24.1 eur)
- Eurozone Oct 2018 current account sa, eur increase to 23 eur vs previous 16.9 eur
- Switzerland Nov 2018 trade increase to 4737 chf vs previous 3522 chf (revised from 3748 chf)
Economic Data Ahead
- (0700 ET/1200 GMT) Bank of England policymakers will meet to vote on interest rate decision.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 10,000 to a seasonally adjusted 216,000 for the week ended Dec. 14, while continuing claims for the week ended Dec. 7 is expected to increase to 1.665 million from a previous reading of 1.661 million.
- (0830 ET/1330 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity increased to 15.0 in December from 12.9 in November.
- (0830 ET/1330 GMT) Payrolls processor ADP releases Canadian employment report for the month of November. The report showed the economy shed 23,000 jobs in the previous month.
- (0830 ET/1330 GMT) Statistics Canada will release its wholesale trade figures for the month of October. The indicator is likely to have increased by 0.4 percent, after unexpectedly declining 0.5 percent in September.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending December 21.
Key Events Ahead
- (0700 ET/1200 GMT) Bank of England publishes summary and minutes of the Monetary Policy Committee meeting in London
FX Beat
DXY: The dollar index tumbled to a 1-month low as the Federal Reserve's 'dot plots' now signal two rate hikes for next year, instead of three, while investors remain unconvinced and barely price in one increase amid a slowdown in global growth. The greenback against a basket of currencies trades 0.8 percent down at 96.24, having touched a low of 96.20 earlier in the day, its lowest since November 20. FxWirePro's Hourly Dollar Strength Index stood at -101.27 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro rallied to a 1-1/2 month peak after data showed German real wages rose by 1.5 percent in the third quarter, the strongest increase in two years, indicating that household spending continued to support growth. Moreover, news that Italy had struck a deal with the European Commission over its contested 2019 budget supported the bid tone around the major. The European currency traded 0.9 percent up at 1.1474, having touched a high of 1.1485 earlier, its highest since Nov. 7. FxWirePro's Hourly Euro Strength Index stood at 160.45 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.1500 (November 7 High), a break above targets 1.1550 (October 22 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 slumped to a fresh near 2-month low after the Federal Reserve stepped back from a more aggressive policy tightening path amid rising uncertainty about global economic growth. The major was trading 0.6 percent down at 111.76, having hit a low of 111.67 earlier, its lowest since October 26. FxWirePro's Hourly Yen Strength Index stood at 19.51 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims. 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 111.37 (October 26 Low), a break below could take it lower 111.06 (September 11 Low).
GBP/USD: Sterling surged above the 1.2700 handle to hit a 10-day peak after data released earlier showed British retail sales surged by much more than expected in November. However, lingering concerns of a disorderly Brexit in little more than three months' time limited the upside. The major traded 0.6 percent up at 1.2689, having hit a high of 1.2705 earlier; it’s highest since December 10. FxWirePro's Hourly Sterling Strength Index stood at -12.52 (Neutral) 1000 GMT. Immediate resistance is located at 1.2759 (Dec. 10 High), a break above could take it near 1.2839 (December 4 High). On the downside, support is seen at 1.2560, a break below targets 1.2515. Against the euro, the pound was trading 0.2 percent up at 90.39 pence, having hit a low of 90.50 earlier, it’s lowest since Dec. 12.
USD/CHF: The Swiss franc advanced to an over 1-week peak, as the greenback slumped after the U.S. Federal Reserve raised interest rates by 0.25 percent point, but forecast fewer rate increases next year than it had at its September policy meeting. The major trades 0.7 percent down at 0.9869, having touched a low of 0.9866 earlier; it’s lowest since December 11. FxWirePro's Hourly Swiss Franc Strength Index stood at 89.13 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9976 (November 29 High) and any break above will take the pair to next level till 1.0008 (December 5 High). The near-term support is around 0.9847 (Oct. 15 Low), and any close below that level will drag it till 0.9797 (Oct. 1 Low).
Equities Recap
European shares tumbled as the Federal Reserve's disappointing rate outlook stoked worries of tighter monetary conditions that could further weigh on sluggish economic growth.
The pan-European STOXX 600 index plunged 1.2 percent at 337.58 points, while the FTSEurofirst 300 index slumped 1.1 percent to 1,334.30 points.
Britain's FTSE 100 trades 0.5 percent down at 6,730.94 points, while mid-cap FTSE 250 eased 0.8 to 17,457.99 points.
Germany's DAX declined 1.1 percent at 10,645.54 points; France's CAC 40 trades 1.5 percent lower at 4,706.26 points.
Commodities Recap
Crude oil prices slumped by more than 3 percent, hovering towards their lowest levels for more than a year amid increasing worries about oversupply and the outlook for energy demand. International benchmark Brent crude was trading 1.6 percent down at $55.54 per barrel by 1019 GMT, having hit a low of $54.64 earlier, its lowest since October 2017. U.S. West Texas Intermediate was trading 1.7 percent down at $46.55 a barrel, after falling as low as $45.77 on Tuesday, its lowest since early August 2017.
Gold prices surged, boosted by a softer dollar after the U.S. Federal Reserve delivered a less-dovish outlook on monetary tightening than many had anticipated. Spot gold rose 1.1 percent to $1,256.23 per ounce at 1022 GMT, having touched a high of $1,257.52 on Wednesday, its highest level since July 11. U.S. gold futures declined 0.3 percent to $1,252.80 per ounce on Thursday.
Treasuries Recap
The U.S. Treasuries remained mixed during late afternoon session as the dust starts to settle on the Fed’s monetary policy announcements ahead of the country’s initial jobless claims and Philly Fed manufacturing index for the month of December, scheduled to be released today by 13:30GMT respectively. The yield on the benchmark 10-year Treasuries slipped nearly 1-1/2 basis points to 2.764 percent, the super-long 30-year bond yields slumped nearly 5 basis points to 2.965 percent and the yield on the short-term 2-year 1-1/2 basis points lower at 2.658 percent.
The German bunds climbed during European session as investors tracked a dovish statement by the Federal Reserve at its monetary policy meeting held early today, while shrugging-off the rise in the federal funds rate by 25 basis points to 2.25-2.50 percent. The German 10-year bond yields, which move inversely to its price, fell 1-1/2 basis points to 0.229 percent, the yield on 30-year note suffered nearly 2 basis points to 0.846 percent while the yield on short-term 2-year remained nearly steady at -0.595 percent.
The Japanese government bonds continued to trade mixed after the Bank of Japan (BoJ) kept its asset purchase programme unchanged at its monetary policy meeting concluded early today, while the Federal Reserve sounded more dovish than before at its last policy meeting of the year, also unveiled early today. The yield on the benchmark 10-year JGB note, which moves inversely to its price, fell 3 basis points to 0.032 percent, the yield on the long-term 30-year note also plunged nearly 3 basis points to 0.728 percent and the yield on short-term 2-year traded 14-1/2 basis points lower at -0.144 percent.
The Australia 10-year bond yield hits an 18-month low as investors moved to safe-haven buying following surprise rise in November jobless rate. Along with that, U.S. Treasury yields dipped over 8-month low after the Federal Reserve cut interest rate projections for 2019. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 4 basis points to 2.350 percent, the yield on the long-term 30-year bond also dipped 5 basis points to 2.834 percent and the yield on short-term 2-year down 1 basis point to 1.949 percent.
