Market Roundup
- EUR/USD 0.07%, USD/JPY -0.11%, GBP/USD -0.04%, EUR/GBP 0.11%
- DXY -0.04%, DAX -0.05%, FTSE 0.24%, Brent 1.14%, Gold 0.17%
- Europe's Unibail-Rodamco bids USD16 bln for Westfield in global shift
- Germany ZEW Economic Sentiment Dec, 17.4, 18.0 forecast, 18.7 previous
- Germany ZEW Current Conditions Dec, 89.3, 88.5 forecast, 88.8 previous
- Great Britain Core CPI YY Nov, 2.7%, 2.7% forecast, 2.7% previous
- Great Britain CPI YY Nov, 3.1%, 3.0% forecast, 3.0% previous
- Great Britain RPI YY Nov, 3.9%, 4.0% forecast, 4.0% previous
- Great Britain RPIX YY Nov, 4.0%, 4.2% previous
- Great Britain PPI Input Prices YY NSA Nov, 7.3%, 6.8% forecast, 4.6% previous
- Great Britain PPI Output Prices YY NSA Nov, 3.0%, 3.0% forecast, 2.8% previous
- Great Britain Core Output YY NSA Nov, 2.2%, 2.2% forecast, 2.15 previous
- France Non-Farm Payrolls Rev Q3, 0.20%, 0.20% previous
- German negotiated wages rise most since 2014
- Oil tops $65, first time since 2015, on UK pipeline outage
- Gold inches up from near 5-mth low ahead of Fed meeting
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. producer price index is likely to have increased 0.3 percent in November, while in the 12 months through the same period, it is expected to have advanced 2.9 percent. PPI excluding food and energy probably edged up 0.2 percent, compared with an increase of 0.4 percent in the previous month.
- (1400 ET/1900 GMT) The U.S. reports its monthly budget statement for the month of November. The government is likely to show a budget deficit widened to $134 billion from $63 billion in the previous month.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
- (1645 ET/2145 GMT) Statistics New Zealand will release food price index for the month of November. The indicator posted a fall of 1.1 percent in the prior month.
- (1830 ET/2330 GMT) The Faculty of Economics and Commerce Melbourne Institute will release Australia's Westpac consumer confidence for the month of December. The index declined 1.7 percent in November.
- (1850 ET/2350 GMT) Japan's machinery orders are likely to have increased 3.0 percent for the month of October after posting a decline of 8.1 percent in September.
Key Events Ahead
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(0845 ET/1345 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.510 bn
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(0900 ET/1400 GMT) The Federal Reserve Bank of New York co-hosts "Transforming Communities: Driving and Assessing Investment" conference in New York.
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(1200 ET/1700 GMT) The Federal Reserve's Federal Open Market Committee begins its two-day meeting on interest rate policy.
- (1400 ET/1900 GMT) European Central Bank (ECB) President Mario Draghi's Speech.
- (1715 ET/2215 GMT) Reserve Bank of Australia Governor Philip Lowe's Speech.
FX Beat
DXY: the dollar index eased, weighed down by a softer tone surrounding the U.S. Treasury bond yields, while investors anticipated an interest rate hike from Fed on Wednesday. The greenback against a basket of currencies traded 0.1 percent down at 93.84, having touched a high of 94.09 on Friday, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at 46.49 (Neutral) by 1000 GMT.
EUR/USD: The euro continued to consolidate within narrow ranges as the divergence in Federal Reserve and European Central Bank policy supported the dollar. The European currency traded flat at 1.1777, having touched a low of 1.1730 on Friday, its lowest since Nov. 21. FxWirePro's Hourly Euro Strength Index stood at 14.64 (Neutral) by 1000 GMT. The pair has jumped till 200- H EMA yesterday and shown a minor selling and any break above 1.1807 will take it to next level till 1.18290 (233- H MA).
USD/JPY: The dollar declined after rising to a near 1-month high in the previous session, as investors turned cautious ahead of the FOMC meeting at which it is widely expected to hike interest rates for the fifth time since late 2015. The major was trading 0.1 percent down at 113.43, having hit a high of 113.68 the day before, its highest since Nov. 14. FxWirePro's Hourly Yen Strength Index stood at -95.08 (Highly Bearish) by 1000 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 slumped to a 2-week low after data showed UK retail sales rose at a slower pace, as compared to initially expected. However, the downside was supported by stronger than expected inflation figures, which surprisingly rose to its highest level in nearly six years in November. Sterling traded flat at 1.3337, having hit a low of 1.3310 earlier, it’s lowest since Nov. 28. FxWirePro's Hourly Sterling Strength Index stood at -123.29 (Highly Bearish) by 1000 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 1.3550 and any break above will take it to next level till 1.3600/1.3680. Against the euro, the pound was trading 0.1 percent down at 88.29 pence, having hit a high of 86.89 pence on Friday, it’s highest since Jun. 9.
USD/CHF: The Swiss franc rose, extending gains for the third consecutive session, as investors remained cautious ahead of U.S. Federal Reserve two-day policy meeting. The major trades 0.1 percent down at 0.9905, having touched a high of 0.9977 on Friday, it’s highest since Nov. 13. FxWirePro's Hourly Swiss Franc Strength Index stood at 3.58 (Neutral) by 1000 GMT. The near-term support is around 0.9875 (233- H MA) and any break below will drag the pair till 0.9840 (55- day EMA)/0.9805 (200- day EMA). On the higher side, 1.000 will be acting as major resistance and any break above will take it to next level till 1.00380/1.010.
AUD/USD: The Australian dollar rallied to a 6-day high as a softer tone surrounding the U.S. Treasury bond yields undermined the U.S. dollar bulls sentiments. The Aussie trades 0.7 percent up at 0.7574, having hit a low of 0.7501 on Friday; it’s lowest since Jun. 7. FxWirePro's Hourly Aussie Strength Index stood at 142.01 (Highly Bullish) by 1000 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 0.7570 (233- H MA) and any break above targets 0.7645/0.7680/0.7730/0.7780.
Equities Recap
European stocks rallied, strengthened by oil stocks after a pipeline shutdown, while sterling slumped to a 2-week low as investors seemed convinced that Brexit uncertainty would force the BoE to go slow with monetary policy tightening.
The pan-European STOXX 600 index gained 0.2 percent to 389.63 points, while the FTSEurofirst 300 index rose 0.2 percent to 1,534.12 points.
Britain's FTSE 100 trades 0.3 percent higher at 7,475.12 points, while mid-cap FTSE 250 jumped 0.1 percent to 20,038.58 points.
Germany's DAX rallied 0.05 percent at 13,129.66 points; France's CAC 40 trades 0.2 percent up at 5,395.72 points.
Commodities Recap
Crude oil prices rose above $65 a barrel for the first time since mid-2015 as a shutdown of the Forties North Sea oil pipeline supported tightening of the market. International benchmark Brent crude was trading 0.8 percent up at $65.19 per barrel by 1027 GMT, having hit a high of $65.67 earlier, its highest since Jun. 2016. U.S. West Texas Intermediate was trading 0.4 percent higher at $58.25 a barrel, after rising as high as $58.53, its highest since Dec. 1.
Gold prices steadied after falling to its lowest in nearly five months in the previous session, ahead of the start of a two-day U.S. Federal Reserve meeting. Spot gold rose 0.1 percent to $1,243.23 an ounce by 1030 GMT, after hitting its lowest since July 20 at $1240.70 on Monday. U.S. gold futures fell 0.1 percent to $1,246.30 an ounce.
Treasuries Recap
The U.S. Treasuries traded flat as investors wait to watch the country’s producer price-led inflation index for the month of November, due later today. The yield on the benchmark 10-year Treasuries hovered around 2.38 percent, the super-long 30-year bond yields flat at 2.77 percent and the yield on the short-term 2-year too traded nearly steady at 1.82 percent.
The UK gilts slumped after the country’s consumer price-led inflation index for the month of November topped market expectations. Also, investors remain glued to watch the employment report for the month of October, scheduled for tomorrow, which will provide further direction in the debt market. The yield on the benchmark 10-year gilts, jumped nearly 2 basis points to 1.22 percent, the super-long 30-year bond yields also surged 2 basis points to 1.80 percent and the yield on the short-term 2-year traded 1 basis point higher at 0.47 percent.
The German bunds jumped after the country’s economic sentiment for the month of December, released by Munich-based institute ZEW, missed market expectations, coming in at 17.4, vs consensus estimates of 18.0 and lower than the 18.7 seen in November. The German 10-year bond yields, which move inversely to its price, jumped nearly 2 basis points to 0.30 percent, the yield on 30-year note surged 1-1/2 basis points to 1.13 percent and the yield on short-term 2-year traded a little over 1 basis point higher at -0.72 percent.
The New Zealand government bonds closed flat as investors remained side-lined in any major trading activity amid a silent session that witnessed no data of major economic significance. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained tad higher at 2.86 percent, the yield on 20-year note flat at 3.41 percent and the yield on short-term 2-year ended on a steady note at 1.99 percent.
The Japanese government bonds traded nearly flat as investors awaited the 1.0 trillion yen 20-year JGBs auction scheduled for Thursday along with FOMC last policy decision for this year. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, trade nearly flat at 0.051 percent, the yield on long-term 40-year remained steady at 0.979 percent and the yield on short-term 2-year rose a nearly ½ basis point to -0.143 percent.
The Australian government bonds traded narrowly mixed as investors remain remained sidelined in any major deal ahead of the Reserve Bank of Australia (RBA) Governor Philip Lowe speech. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.554 percent, the yield on the long-term 30-year note traded nearly flat at 3.297 percent and the yield on short-term 2-year surged 1/2 basis point to 1.837 percent.
