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America’s Roundup; Dollar dips against Japanese yen on fresh Omicron worries after vaccine warning, Wall Street ends lower, Gold retreats, Oil slumps on Omicron fears-December 1st,2021

Market Roundup

•Canada GDP (QoQ) (Q3) 1.3%, -0.3% previous

•Canada GDP (YoY) (Q3) 3.97%,12.72% previous

•Canada GDP Annualized (QoQ) (Q3) 5.4%, 3.0% forecast, -1.1% previous

•Canada Sep GDP (MoM) 0.1%, 0.1% forecast, 0.4% previous

•US Redbook (YoY)  21.9%,15.4% previous

•US Sep S&P/CS HPI Composite - 20 n.s.a. (MoM) 0.8%,  1.5% forecast, 0.9% previous

•US Sep S&P/CS HPI Composite - 20 n.s.a. (YoY) 19.1%,  19.3% forecast, 19.7% previous

•US Sep House Price Index (YoY) 17.7%,18.5% previous

•US Sep House Price Index 354.6, 351.7 previous

•US Nov Chicago PMI 61.8,67.0 forecast, 68.4 previous

•US Nov CB Consumer Confidence  109.5,110.9 forecast, 113.8 previous

•US Nov Texas Services Sector Outlook  22.7,20.7 previous

•US Nov Dallas Fed Services Revenues 25.4, 19.6 previous

Looking Ahead Economic Data (GMT)

•00:30 Australia GDP Final Consumption (Q3) 1.2% previous

•00:30 Australia GDP Chain Price Index (Q3) 3.3% previous

•00:30 Australia GDP (YoY) (Q3) 3.0% forecast,9.6% previous

•00:30 Australia GDP Capital Expenditure (Q3) 3.2% previous

•00:30 Australia GDP (QoQ) (Q3) -2.7% forecast, 0.7% previous

••07:15 China Nov Caixin Manufacturing PMI  50.5 forecast, 50.6 previous

Looking Ahead - Events, Other Releases (GMT)

•07:00 Japan BoJ Board Member Adachi Speaks


EUR/USD: The euro rose against dollar on Tuesday as single currency drew support from a subdued dollar as investors assessed the severity of the Omicron coronavirus variant's impact on the global economy. The World Health Organization warned of a “very high” risk of infection surges from Omicron, and countries around the world have reacted quickly to tighten border controls. The euro rose 0.4% to$1.1335, posting its biggest three-day rising streak since December 2020 .The single currency slumped to a nearly 17-month trough of $1.11864 last week as European Central Bank policy makers stuck to their dovish stance in the face of heated inflation. Immediate resistance can be seen at 1.1366(50%fib), an upside break can trigger rise towards 1.1450(61.8%fib).On the downside, immediate support is seen at 1.1293(38.2 % fib), a break below could take the pair towards 1.1185(23.6%fib).

GBP/USD: Sterling strengthened on Tuesday against weakening dollar on the expectations that the BoE could raise interest rates faster than the European Central Bank. Markets are pricing in around 8 bps of an increase in interest rates by the Bank of England on Dec. 16. That has fallen from more than 12 bps at the start of last week. Investors perceive global central banks would end pandemic-era stimulus and raise interest rates as they looked to combat rising inflation without choking off growth. Sterling rose 0.3% versus the weakening dollar to $1.3360, after touching a December 2020 low of $1.3278 on Friday. Immediate resistance can be seen at 1.3314(5DMA), an upside break can trigger rise towards 1.3365 (38.2%fib).On the downside, immediate support is seen at 1.3289 (23.6%fib), a break below could take the pair towards 1.3197 (Daily low)

USD/CAD: The Canadian dollar weakened to its lowest level in 10 weeks against its U.S. counterpart on Tuesday as hawkish comments from Federal Reserve Chair Jerome Powell offset data showing stronger than expected growth in the domestic economy. Canada's economy grew 5.4% in the third quarter on an annualized basis, beating analyst expectations, and growth most likely accelerated in October on a manufacturing rebound, Statistics Canada data showed. U.S. crude oil futures settled down 5.4% at $66.18 a barrel, while the Canadian dollar was trading 0.4% lower at 1.2787 to the greenback .  Immediate resistance can be seen at 1.2794 (23.6%fib), an upside break can trigger rise towards 1.2835 (30th Nov high).On the downside, immediate support is seen at 1.2731 (38.2%fib), a break below could take the pair towards 1.2686(50%fib).

USD/JPY: The dollar declined against the Japanese yen on Tuesday as investors grew nervous about a suddenly hawkish Federal Reserve that could deliver aggressive rate hikes and derail a nascent economic recovery. Worries about the new Omicron coronavirus variant also kept a bid in these safe-haven currencies. The dollar index fell 0.3% to 95.90. It rallied earlier, while U.S. stocks fell, after Powell's hawkish remarks. In late trading, the dollar fell 0.4% against the yen to 113.17 yen . Strong resistance can be seen at 113.84 (23.6% fib), an upside break can trigger rise towards 114.00(Psychological level).On the downside, immediate support is seen at 113.15(38.2%fib), a break below could take the pair towards 112.65(50%fib).

Equities Recap

European stocks fell on Tuesday after U.S. Federal Reserve chair Jerome Powell warned U.S. inflation may not be transitory and as worries about the efficacy of existing vaccines against the Omicron COVID-19 variant weighed on investors.

UK's benchmark FTSE 100 closed down by 0.71 percent, Germany's Dax ended down  by 1.18 percent, France’s CAC finished the day down by 0.81 percent.

Wall Street's main indexes closed lower on Tuesday after Federal Reserve Chair Jerome Powell signaled that the U.S. central bank would consider speeding up its withdrawal of bond purchases as inflation risks increase, piling pressure onto a market already nervous about the latest COVID-19 variant.

Dow Jones closed down by  1.89% percent, S&P 500 closed down by 1.90% percent, Nasdaq settled down by 1.55%  percent.

Treasuries Recap

Testimony by Federal Reserve Chair Jerome Powell on Tuesday struck a hawkish chord in the U.S. Treasury market, pushing up shorter-term yields, which had fallen earlier in the session as part of an across-the-curve rally sparked by concerns over the Omicron coronavirus.

The benchmark 10-year note yield, which fell to its lowest level since Sept. 24 at 1.412%, was last down 8.5 basis points at 1.4443%. The 30-year yield US30YT=RR, which dropped to its lowest level since late January at 1.776%, was last 8.5 basis points lower at 1.7951%. Yields move inversely to prices.

Commodities Recap

Gold beat a hasty retreat on Tuesday as investors latched on to seemingly hawkish remarks from the U.S. Federal Reserve chair, erasing gains from an over 1% rally fuelled by concerns over the Omicron coronavirus variant.

Spot gold fell 0.7% to $1,773.21 per ounce by 02:14 p.m. ET (1914 GMT). U.S. gold futures settled down 0.5% at $1,776.5.

Oil prices tumbled on Tuesday after Moderna's chief cast doubt on the efficacy of COVID-19 vaccines against the Omicron coronavirus variant, spooking financial markets and heightening worries about oil demand.

Brent crude futures fell $2.87, or 3.9%, to settle at $70.57 a barrel, after hitting an intraday low of $70.22, lowest since August.


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