Market Roundup
• US Q3 growth revised +3.2% v 3% forecast 2.9% previous, Q3 GDP sales beat as well 2.7% V 2.5% forecast.
• Core/Headline PCE prices (Prelim) held steady, missing forecast slightly.
• US consumer confidence beat 107.1 v forecast 101.2 100.8 previous.
• Nine Fed banks call for 25bp discount rate hike, rate held steady-minutes.
• Fed’s Powell: Case for hike 'clearly strengthened' this month, economy not far from inflation/employment goals.
• ECB ready to buy more Italian bonds if referendum rocks market, Rome would need to formally ask for longer-term support.
• German HICP unchanged at 0.7% in Nov, before crucial ECB meet; ECB expected to extend asset purchases.
• USD back on upward track against yen, euro; weak oil & Italy referendum lift USD.
• Chance of Italy leaving Euro Zone hits 4-yr high of 19.3% (Sentix).
• Iran, Iraq at loggerheads with Saudis ahead of OPEC meeting on Wednesday, oil dips 3.75%.
Looking Ahead - Economic Data (GMT)
• 21:45 New Zealand Building Consents Oct 0.2%-previous
• 23:50 Japan Industrial output prelim mm Oct forecast -0.10%, 0.6%- previous
• 23:50 Japan IP Forecast 1 Mth Ahead* Oct 1.1%- previous
• 23:50 Japan IP Forecast 2 Mth Ahead* Oct 2.1%- previous
• 00:00 Australia HIA New Home Sales m/m Nov 3.8%- previous
• 00:00 New Zealand NBNZ Business Outlook Nov 24.5%- previous
• 00:00 New Zealand NBNZ Own Activity Nov 38.4%- previous
• 00:30 Australia Building Approvals* Oct forecast 1.50%, -8.7%- previous
• 00:30 Australia Private Sector Credit* Oct forecast 0.40%, 0.4%- previous
• 00:30 Australia Housing Credit* Oct 0.5%- previous
• 05:00 Japan Construction Orders YY* Oct 16.3%- previous
• 05:00 Japan Housing Starts YY* Oct Forecast 11.20%, 10%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Event
Currency Summaries
EUR/USD is likely to find support at 1.0580 levels and currently trading at 1.0647 levels. The pair has made session high at 1.0655 and hit lows at 1.0569 levels. Euro rose against dollar on Tuesday as dollar declined across the board on profit taking. The greenback initially strengthened across the board following the release of stronger-than-expected U.S. third-quarter gross domestic product numbers but reversed course in quick succession. Gross domestic product increased at a 3.2 percent annual rate instead of the previously reported 2.9 percent pace, the Commerce Department said in its second estimate for the quarter. Growth was the strongest since the third quarter of 2014 and followed the second quarter's anemic 1.4 percent pace. Political risks is set to keep the euro in check as worries about Italy's banking system have been mounting ahead of a Dec. 4 referendum on constitutional reform, which could unseat the government of Prime Minister Matteo Renzi. The dollar was last up 0.8 percent against the yen at 112.82 yen .The euro was last trading against the dollar at $1.0647.
GBP/USD is supported in the range of 1.2410 levels and currently trading at 1.2491 levels. It reached session high at 1.2524 and dropped to session low at 1.2455 levels. Sterling rose against the dollar on Tuesday as investors bought pound as concerns over how Britain will leave the European Union eased. The pound also got a small boost on Tuesday after data showed lending to Britons expanded last month at the fastest annual pace in 11 years, while mortgage approvals were stronger than expected, bolstering the picture of resilient consumer demand after June's Brexit vote. The British government denied on Tuesday that a document photographed in the hands of an official from the ruling Conservative party which said the strategy for Brexit talks was to "have cake and eat it" accurately reflected its plans for forthcoming EU divorce negotiations. Against the dollar, sterling climbed 0.7 percent to $1.2499, having topped $1.25 in afternoon trade.
USD/CAD is supported at 1.3375 levels and is trading at 1.3436 levels. It has made session high at 1.3474 and lows at 1.3408 levels. The Canadian dollar strengthened against its U.S. counterpart on Tuesday as uncertainty over U.S. President-elect Donald Trump's policies, as well as Italy's referendum on constitutional reform on Sunday and the outcome of Wednesday's meeting of the Organization of the Petroleum Exporting Countries supported Canadian dollar. On the data front, Canada's current account deficit narrowed to C$18.3 billion in the third quarter from a revised C$19.02 billion in the second quarter as exports picked up, Statistics Canada said. Bank of Canada's Poloz said on Monday that many of the uncertainties surrounding the economic outlook that the Bank of Canada faced at its last policy decision still remain. The central bank considered an interest rate cut last month before holding its policy rate steady at 0.50 percent. It last cut rates in July 2015.The Canadian dollar was last trading at C$1.3431 to the greenback, or 74.30 U.S. cents, stronger than Monday's close of C$1.3481, or 74.51 U.S. cents.
AUD/USD is supported around 0.7430 levels and currently trading at 0.7481 levels. It hit session high at 0.7491 and made session lows at 0.7437levels. The Australian dollar strengthened against the dollar on Tuesday as soaring commodity prices propelled Aussie bulls. The Australian dollar held steady at $0.7487, following three consecutive sessions of gains. However, the Aussie is still down 1.5 percent so far this month, set to post its second straight monthly loss. Over the past week, however, it has held its own against the U.S. dollar aided by a sharp rebound in the price of iron ore and coal Australia's two largest exports. The dollar index, which tracks the greenback against a basket of six major rivals, scaled to a nearly 14-year peak of 102.050 on Thursday before profit-taking and oil price jitters brought it back down to earth.
Equities Recap
European shares rose slightly on Tuesday, helped by a strong rebound in Italian banks, while reports of a improved takeover offer sent Swiss biotech Actelion rallying to a fresh all-time high.
UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day up by 0.19 percent, Germany's Dax ended up by 0.3 percent, France’s CAC finished the day up by 0.9 percent.
U.S. stocks edged higher on Tuesday as an upbeat outlook from UnitedHealth lifted health insurers, but a sharp drop in oil prices weighed on energy shares and limited the advance.
Dow Jones closed up by 0.13 percent, S&P 500 ended d up 0.13 percent, Nasdaq finished the day up by 0.21 percent.
Treasuries Recap
U.S. Treasury yields inched higher on Tuesday after stronger-than-expected U.S. gross domestic product data supported expectations for a faster pace of Federal Reserve rate increases next year, while month-end buying and uncertainty ahead of key events limited the rise.
Benchmark 10-year U.S. Treasury notes were last down 4/32 in price, with yields rising to 2.3358 percent from 2.320 percent late Monday.
Two-year notes, which are most sensitive to interest rate increases, were last roughly flat to yield 1.1149 percent, compared with 1.111 percent late Monday.
Commodities Recap
Gold prices fell on Tuesday due to expectations of rising U.S. interest rates and improving sentiment for global economic growth, which means investors are likely to favor risk assets such as equities.
Spot gold was down 0.4 percent at $1,188.30 an ounce by 2:22 p.m. EST (1922 GMT), from a session low at $1,180.85. U.S. gold futures settled down 0.2 percent at $1,187.90.
Oil slumped 4 percent on Tuesday as OPEC's leading oil exporters struggled to agree on a deal to cut production to reduce global oversupply and boost prices, with Iran and Iraq at loggerheads with Saudi Arabia a day ahead of meeting.
Brent futures fell $1.86, or 3.9 percent, to settle at $46.38 a barrel, while U.S. crude lost $1.85, or 3.9 percent, to $45.23. That was the biggest daily percentage decline for Brent since September.
