Menu

Search

  |   Market Roundups

Menu

  |   Market Roundups

Search

Europe Roundup: Sterling rebounds on mixed wage figures, dollar eases amid U.S. political concerns, investors’ eye FOMC policy decision - Wednesday, December 13th, 2017

Market Roundup

  • EUR/USD 0.05%, USD/JPY -0.15%, GBP/USD 0.21%, EUR/GBP -0.17%
     
  • DXY -0.09%, DAX -0.15%, FTSE 0.08%, Brent 1.03%, Gold -0.17%
     
  • With rate hike in the bag, Fed may hint at Trump effect on economy
     
  • Trump to make final tax push as Republican negotiators near deal
     
  • EZ Industrial Production MM Oct, 0.2%, 0.0% forecast, -0.6% previous
     
  • EZ Industrial Production YY Oct, 3.7%, 3.5% forecast, 3.3% previous
     
  • EZ Employment YY Q3, 1.7%, 1.6% previous
     
  • Germany CPI Final YY Nov, 1.8%, 1.8% forecast, 1.8% previous
     
  • Germany HICP Final YY Nov, 1.8%, 1.8% forecast, 1.8% previous
     
  • Germany Wholesale Price index YY Nov, 3.3%, 3.4% forecast, 3.0% previous
     
  • Great Britain Claimant Count Unemployment Change Nov, 5.9k, 3.2k forecast, 1.1k previous
     
  • Great Britain ILO Unemployment Rate Oct, 4.3%, 4.2% forecast, 4.3% previous
     
  • Great Britain Average Week Earnings 3M YY Oct, 2.5%, 2.5% forecast, 2.2% previous
     
  • Great Britain Average Earnings (Ex-Bonus) Oct, 2.3%, 2.2% forecast, 2.2% previous
     
  • Italy Industrial Output MM SA Oct, 0.5%, 0.6% forecast, -1.3% previous
     
  • Italy Industrial Output YY WDA Oct, 3.1%, 3.4% forecast, 2.4% previous
     
  • Oil prices recover on big US crude stock drawdown, pipeline shutdown supports
     
  • Gold holds near 5-month low ahead of Fed meeting outcome

Economic Data Ahead

  • (0830 ET/1330 GMT) The U.S. consumer price index likely increased 0.4 percent in November after edging up 0.1 percent in October, while in the 12 months through November, the CPI is expected to have risen 2.2 percent.  Excluding food and energy, the core CPI probably rose 0.2 percent, matching the gain in the previous month.
     
  • (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending December 8.
     
  • (1400 ET/1900 GMT) The U.S. Federal Reserve concludes its two-day policy meeting and issues a statement on interest rates.
     
  • (1400 ET/1900 GMT) The FOMC releases its statement regarding monetary policy.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending December 8.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending December 8.

Key Events Ahead

  • N/A The U.S. President Donald Trump's speech
     
  • (1430 ET/1930 GMT) Federal Reserve Chair Janet Yellen will address the press conference.
     
  • (1800 ET/2300 GMT) Federal Reserve Board Governor Lael Brainard is scheduled to give opening remarks before a Workforce Development Video Campaign award ceremony co-sponsored by the Federal Reserve Bank of New York in Rochester.
     

FX Beat

DXY: The dollar index slightly eased amid U.S. political concerns, while investors awaited the Fed's decision on rates and Chair Janet Yellen's news conference. The greenback against a basket of currencies traded 0.1 percent down at 94.02, having touched a high of 94.22 on Tuesday, its highest since Nov. 14. FxWirePro's Hourly Dollar Strength Index stood at 27.66 (Neutral) by 1000 GMT.

EUR/USD: The euro steadied after falling to a 3-week low in the previous session as the dollar came under renewed selling pressure on the back of the latest U.S. political headlines, citing that a Trump’s candidate lost the Alabama U.S. Senate race, which could make it difficult for Trump to pass the tax bill. The European currency traded 0.1 percent up at 1.1748, having touched a low of 1.1717 earlier, its lowest since Nov. 21. FxWirePro's Hourly Euro Strength Index stood at 13.00 (Neutral) by 1000 GMT. The pair is facing strong resistance at 1.17970 (55- 4H EMA) and any break above will take it to next level till 1.18765 (61.8% retracement)/1.1900/1.19612 (Nov 27th, 2017 high). On the lower side, major support is around 1.1700 and any break below will drag it to next level till 1.1660/1.1600.

USD/JPY: The dollar slumped after rising to a near 1-month peak in the prior session on news of a Democrat candidate's victory in a US Senate race in Alabama that can have negative implications for the US President Donald Trump's tax reforms. However, the major trimmed losses as investors focused more on the Fed's projection on the pace of its rate hikes next year. The pair was trading 0.1 percent down at 113.40, having hit a high of 113.75 the day before, its highest since Nov. 14. FxWirePro's Hourly Yen Strength Index stood at -30.70 (Neutral) by 1000 GMT. On the lower side, any close below 111 confirms minor weakness, a decline till 110/108.15 likely. The minor support is around 112.90 (55- 4H EMA). Any convincing close above 114 will take the pair to next level till 114.73/115.

GBP/USD: Sterling rebounded from a 2-week low hit in the previous session after data showed UK average earnings, excluding bonuses, rose more-than-expected, while the unemployment rate held steady. The economy's average earnings excluding bonuses grew 2.3 percent over the year in October, beating expectations of 2.2 percent, while earnings growth with bonuses came in line at 2.5 percent over the year. Sterling traded 0.2 percent up at 1.3347, having hit a low of 1.3303 on Tuesday, it’s lowest since Nov. 28. FxWirePro's Hourly Sterling Strength Index stood at -68.62 (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 0.2 percent up at 88.00 pence, having hit a high of 86.89 pence on Friday, it’s highest since Jun. 9.

USD/CHF: The Swiss franc edged down after rising for three consecutive sessions against the dollar, as investors expected the Fed to push through three more hikes next year. The major trades 0.05 percent up at 0.9920, having touched a high of 0.9977 on Friday, it’s highest since Nov. 13. FxWirePro's Hourly Swiss Franc Strength Index stood at 50.02 (Bullish) by 1000 GMT. The near-term support is around 0.9880 (233- H MA) and any break below will drag the pair till 0.9845 (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 rose to a 1-week high amid slight weakness in the greenback across the board. The Aussie trades 0.1 percent up at 0.7563, having hit a high of 0.7580 earlier; it’s highest since Dec. 6. FxWirePro's Hourly Aussie Strength Index stood at 26.59 (Neutral) 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 0.7576 (20- day MA) and any break above targets 0.7645/0.7680/0.7730/0.7780.

Equities Recap

European stocks eased, as investors turned cautious ahead of major central bank policy decisions, while greenback declined after Democrat Doug Jones' victory reduced Republican's Senate majority that could make it harder for Trump to push through tax cut plans and other economic agenda.

The pan-European STOXX 600 index eased 0.1 percent to 391.37 points, while the FTSEurofirst 300 index slumped 0.2 percent to 1,540.63 points.

Britain's FTSE 100 trades 0.1 percent higher at 7,503.17 points, while mid-cap FTSE 250 fell 0.05 percent to 20,071.01 points.

Germany's DAX eased 0.11 percent at 13,169.65 points; France's CAC 40 trades 0.1 percent down at 5,423.83 points.

Commodities Recap

Crude oil prices steadied after easing from multi-month highs in the previous session as industry data showed a larger-than-expected drawdown in U.S. crude stockpiles, while expectations for an extended shutdown of North Sea crude pipeline supported markets. International benchmark Brent crude was trading 0.5 percent up at $64.11 per barrel by 0958 GMT, having hit a high of $65.80 the day before, its highest since Jun. 2016. U.S. West Texas Intermediate was trading 0.3 percent higher at $57.58 a barrel, after rising as high as $58.53 on Tuesday, its highest since Dec. 1.

Gold prices declined, hovering towards its weakest level in almost five months hit in the prior session, amid expectations the Federal Reserve would raise interest rates again at the conclusion of its last policy meeting this year. Spot gold was 0.3 percent down at $1,241.22 an ounce at 1011 GMT, having hit its lowest since July 20 at $1,236.37 the day before. U.S. gold futures were up 0.2 percent at $1,243.90 an ounce.

Treasuries Recap

The U.S. Treasuries slumped Wednesday as investors wait to watch the country’s consumer price-led inflation index for the month of November, due later today. The yield on the benchmark 10-year Treasuries surged 1-1/2 basis points to 2.41 percent, the super-long 30-year bond yields climbed nearly 1 basis point to 2.78 percent and the yield on the short-term 2-year traded nearly 2 basis points higher at 1.84 percent.

The UK gilts rebounded Wednesday after the country’s employment report for the month of October disappointed investors’ sentiments, adding to rise in prices in the debt market. The yield on the benchmark 10-year gilts, rose nearly 1 basis point to 1.23 percent, the super-long 30-year bond yields hovered around 1.80 percent and the yield on the short-term 2-year traded 2 basis points higher at 0.49 percent.

The German bunds remained in neutral mode after the country’s consumer price-led inflation index (CPI) for the month of November remained unchanged. The German 10-year bond yields, which move inversely to its price, rose 1 basis point to 0.32 percent, the yield on 30-year note surged 1-1/2 basis points to 1.15 percent and the yield on short-term 2-year traded nearly flat at -0.73 percent.

The New Zealand government bonds closed tad higher 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 2.84 percent, the yield on 20-year note hovered around 3.39 percent while the yield on short-term 2-year ended 2 basis points lower at 1.97 percent.

The Japanese government bonds edged higher following daily debt buying operation conducted by the Bank of Japan ahead of the FOMC last monetary policy decision later in the day. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1/2 basis point to 0.045 percent, the yield on long-term 40-year declined nearly 1/2 basis point to 0.967 percent and the yield on short-term 3-year declined 1 basis point to -0.141 percent.

The Australian government bonds slumped ahead of the FOMC last policy decision later in the day.  The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 2.553 percent, the yield on the long-term 30-year note climbed 3 basis points to 3.298 percent and the yield on short-term 2-year surged 3 basis points to 1.865 percent.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.