Market Roundup
- EUR/USD 0.39%, USD/JPY 0.04%, GBP/USD 0.23%, EUR/GBP 0.19%
- DXY -0.24, DAX 1.48%, FTSE 0.42%, Brent 0.35%, Gold 0.25%
- ZAR volatility through ANC succession vote: awaiting result
- EZ Inflation Final MM Nov, 0.1%, 0.1% forecast, 0.1% previous
- EZ Inflation Final YY Nov, 1.5%, 1.5% forecast, 1.5% previous
- EZ Inflation Ex Food & Energy YY Nov, 1.1%, 0.9% forecast, 1.1% previous
- Great Britain CBI Trends - Orders Dec, 17, 17 previous
- Italy Trade Balance EU Oct, 0.666B, 0.469B previous
- Italy Global Trade Balance Oct, 4.953B, 3.990B previous
- Oil prices rise on ongoing North Sea outage, Nigeria strike
- Gold ticks higher as nerves over US tax bill hit dollar
Economic Data Ahead
- (0830 ET/1330 GMT) The Statistics Canada will report foreign portfolio investment in domestic stocks for the month of October.
- (0830 ET/1330 GMT) The Statistics Canada will release investment in foreign securities figures for the month of October.
- (1000 ET/1500 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index rose to 70 in December, after posting a similar increase in November.
- (1600 ET/2100 GMT) Westpac New Zealand releases consumer confidence survey for the fourth quarter. The indicator rose to 112.40 in the previous qaurter.
Key Events Ahead
- (0645 ET/1145 GMT) FedTrade operation 15-year Fannie Mae / Freddie Mac (max $365 mn)
FX Beat
DXY: The dollar index declined on uncertainty that the bill would indeed be pushed through, and with some doubts raised over the pro-growth effect the tax reforms would have. The greenback against a basket of currencies traded 0.2 percent down at 93.73, hovering towards a low of 93.28 on Thursday, its lowest since Dec. 6. FxWirePro's Hourly Dollar Strength Index stood at -24.06 (Neutral) by 1000 GMT.
EUR/USD: The euro rallied after data showed Eurozone's Consumer Price Index stood at 1.5 percent in November, in line with expectations and previous reading. However, the upside appears fragile as the core inflation figures declined 0.1 percent, missing estimates of 0.2 percent gain. The European currency traded 0.4 percent up at 1.1794, having touched a high of 1.1862 on Thursday, its highest since Dec. 5. FxWirePro's Hourly Euro Strength Index stood at 42.55 (Neutral) by 1000 GMT. The pair is facing strong resistance at 1.1820 (20- day MA) and any convincing break above will take it to next level till 1.18620/1.1900/19612 (Nov 27th 2017 high). On the lower side, major support is around 1.1700 and any break below will drag the pair to next level till 1.1660/1.1600.
USD/JPY: The dollar trimmed gains amid cautiousness ahead of a vote in U.S. Congress on tax reform, after the bill moved another step closer to ratification over the weekend. The major was trading flat 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 126.49 (Highly Bullish) 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 rose after falling nearly one percent to an over 2-week low in the previous session, amid broad-based dollar weakness and on the back of the latest remarks from the UK PM Theresa May, citing that amid all the disturbance, the Brexit deal is being achieved. The major traded 0.3 percent up at 1.3355, having hit a low of 1.3301 on Friday; it’s lowest since Nov. 28. FxWirePro's Hourly Sterling Strength Index stood at -71.77 (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 1.3382 and any break above will take it to next level till 1.3435/1.3470. Against the euro, the pound was trading 0.2 percent down at 88.27 pence, having hit a low of 88.59 pence on Friday, it’s lowest since Dec. 5.
USD/CHF: The Swiss franc rose after easing for two consecutive sessions, as the greenback declined on caution ahead of a vote in U.S. Congress on tax reform. The major trades 0.2 percent down at 0.9882, having touched a low of 0.9840 on Thursday, it’s lowest since Dec. 5. FxWirePro's Hourly Swiss Franc Strength Index stood at -2.11 (Neutral) by 1000 GMT. On the higher side, near term resistance is around 0.99250 (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 0.9865 (20 day MA) 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 rose after the economy's deficit was projected to shrink to A$20.5 billion in 2018/19 and A$2.6 billion the year after, before turning into a A$10.2 billion surplus in 2020/21. The Aussie trades 0.2 percent up at 0.7658, having hit a high of 0.7694 on Friday; it’s highest since Nov. 10. FxWirePro's Hourly Aussie Strength Index stood at 62.03 (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 0.7681 (233- day MA) and any convincing break above targets 0.7730/0.7780.
Equities Recap
European stocks rallied amid merger and acquisition activity focus, while the greenback slumped as investors awaited ratification of U.S. tax bill.
The pan-European STOXX 600 index advanced 0.8 percent to 391.10 points, while the FTSEurofirst 300 index rallied 0.8 percent to 1,540.89 points.
Britain's FTSE 100 trades 0.4 percent higher at 7,519.55 points, while mid-cap FTSE 250 gained 0.8 percent to 20,204.57 points.
Germany's DAX rose 1.3 percent at 13,269.00 points; France's CAC 40 trades 1.2 percent up at 5,414.30 points.
Commodities Recap
Crude oil prices rallied amid an ongoing North Sea pipeline outage and because a strike by Nigerian oil workers threatened its crude exports. International benchmark Brent crude was trading 0.8 percent up at $63.74 per barrel by 0958 GMT, having hit a high of $65.80 on Tuesday, its highest since Jul. 2015. U.S. West Texas Intermediate was trading 0.6 percent higher at $57.67 a barrel, after rising as high as $58.53 on Tuesday, its highest since Dec. 1.
Gold prices rose, extending previous session gains, as the dollar weakened on caution ahead of a vote in U.S. Congress on tax reform. Spot gold was up 0.2 percent at $1,257.89 an ounce by 1037 GMT, after touching its highest since Dec. 7 at $1,261.66 on Friday. U.S. gold futures rose 0.1 percent to $1,259.30 an ounce.
Treasuries Recap
The U.S. Treasuries slumped after top Republicans said on Sunday they expected Congress to pass a tax code overhaul this week, with a Senate vote as early as Tuesday and President Donald Trump aiming to sign the bill by week’s end. The yield on the benchmark 10-year Treasuries climbed nearly 2 basis points to 2.37 percent, the super-long 30-year bond yields rose 1 basis point to 2.70 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 1.85 percent.
The UK gilts traded slightly lower as investors wait to watch the 10-year auction, scheduled to be held later today. The yield on the benchmark 10-year gilts, hovered around 1.15 percent, the super-long 30-year bond yields tad lower at 1.71 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 0.45 percent.
The German bunds traded flat after the eurozone’s consumer price-led inflation index (CPI) met market expectations during the month of November, albeit staying unchanged from that I October. The German
10-year bond yields, which move inversely to its price, remained flat at 0.30 percent, the yield on 30-year note tad up at 1.10 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points higher at -0.70 percent.
The New Zealand government bonds closed tad higher as investors wait to watch the country’s GlobalDairyTrade price auction and the third-quarter gross domestic product (GDP) data due through this week. 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 slid 1/2 basis point to 3.26 percent
while the yield on short-term 2-year ended 1 basis point higher at 1.94 percent
The Japanese government bonds little changed as investors remain side-lined in any major deal ahead of the upcoming Christmas and New Year holidays. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.044 percent, the yield on new long-term 40-year remained steady 0.962 percent and the yield on short-term 3-year stood flat at -0.149 percent.
The Australian bonds slumped ahead of the Reserve Bank of Australia December meeting minutes, which is scheduled to be released on December 19 at 00:30 GMT. The yield on the benchmark 10-year
Treasury note, which moves inversely to its price, rose 3-1/2 basis points to 2.567 percent, the yield on the long-term 30-year note surged 3 basis points to 3.282 percent and the yield on short-term 2-year climbed over 3 basis points to 1.929 percent.
