Market Roundup
• US pending home sales drop puts focus on surging rates.
• Pending home sales -2.5% in Nov vs forecast for +0.5%.
• Pending home sales index lowest since January.
• China's central bank denies yuan broke 7.0000/dollar on Dec. 28: microblog.
• U.S. senator says Russia can expect sanctions after cyber attacks.
• Chile central bank board member wanted Dec rate cut-minutes.
• Brazil's Temer to veto bill easing states' debt -official.
• Chilean leftist presidential hopeful snatches lead in key poll.
Looking Ahead - Economic Data (GMT)
• No significant data
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.0328 levels and currently trading at 1.0411 levels. The pair has made session high at 1.0419 and hit lows at 1.0371 levels. Euro declined against the dollar on Wednesday as concerns about the strength of a rescue plan for Italian banks and normal year-end caution pushed investors to the safety of government debt. The German finance ministry expressed concern on Wednesday about Italian plans to rescue the country's third biggest lender Monte dei Paschi di Siena, saying Rome must stick to European rules. On Monday, the European Central Bank told the ailing Italian lender that its capital shortfall had risen to 8.8 billion euros ($9.2 billion) from the 5 billion euros indicated previously. This raised questions about whether the 20 billion euros earmarked by the Italian government would be enough to cover the funding requirements of all the country's banks. The euro fell as much as 0.8 percent against the dollar to an eight-day low of $1.0372.
GBP/USD is supported in the range of 1.2195 levels and currently trading at 1.2221 levels. It reached session high at 1.2241 and dropped to session low at 1.2199 levels. Sterling declined on concerns over next year's Brexit negotiations, while expectations of higher U.S. economic growth boosted the greenback. Sterling fell as much as 0.5 percent to a session low of $1.2201, its weakest since Oct. 31. Britain faces uncertainty next year over Brexit negotiations. In October, Prime Minister Theresa May said she would trigger the process to leave the European Union by the end of March. Expectations that U.S. President-elect Donald Trump's incoming administration would boost U.S. growth through fiscal stimulus also continued to bolster the dollar. The Federal Reserve's projections, released on Dec. 14, of three rate hikes for 2017 from the two foreseen in September have also contributed to the dollar's recent gains. The dollar index was last up 0.28 percent at 103.310 after hitting a session high of 103.630 and flirting with a 14-year peak of 103.650 struck on Dec. 20.
USD/CAD is supported at 1.3500 levels and is trading at 1.3554 levels. It has made session high at 1.3599 and lows at 1.3539 levels. The Canadian dollar strengthened against its U.S. counterpart on Wednesday as Canadian dollar firmed slightly on Wednesday against its U.S. counterpart as the price of oil, a key Canadian export, held near highs not seen since 2015. Oil prices edged up for a fourth consecutive session on Wednesday, close to their peaks since mid-2015, with the market awaiting evidence of OPEC supply reductions in the new year. Earlier in the session, the currency was modestly weaker against the U.S. dollar, which rose after data showed U.S. consumer confidence shot to its highest in more than 15 years in December bolstered by expectations the economy will further improve under President-elect Donald Trump. The Canadian dollar was last trading at C$1.3549 to the greenback, or 73.68 U.S. cents, marginally firmer than Tuesday's close of C$1.3577.
AUD/USD is supported around 0.7158 levels and currently trading at 0.7180 levels. It hit session high at 0.7188 and made session lows at 0.7162 levels. The Australian dollar was pinned near multi-month lows on Wednesday after upbeat U.S. economic data supported the U.S. currency and underscored the risk of more tightening by the Federal Reserve. The Australian dollar held at $0.7177, slightly away from a seven-month trough of $0.7160 touched last week. The U.S. currency has been on a roll since Donald Trump won the U.S. Presidential election, sending Treasury yields soaring on expectations of stronger U.S. growth and inflation. Since then, the Aussie has shed around six cents.The Aussie is set to end the year down 1.3 percent, its fourth straight year of losses.
Equities Recap
European shares inched up in quiet festive trade on Wednesday, with stronger mining stocks underpinning the broader market and helping Britain's FTSE 100 to a record closing level.
UK's benchmark FTSE 100 closed up by 0.5 percent, the pan-European FTSEurofirst 300 provisionally closes up by 0.27 percent, Germany's Dax ended flat, France’s CAC finished the day down by 0.1 percent.
Wall Street slipped for the first time in three days on Wednesday due to losses across sectors, hindering the Dow's march towards 20,000, a level it has never breached.
Dow Jones closed down by 0.56 percent, S&P 500 ended up by 0.84 percent, Nasdaq finished the day down by 0.89 percent.
Treasuries Recap
Benchmark U.S. Treasury yields fell to their lowest levels in two weeks on Wednesday after a well-bid 5-year note auction that primed an appetite for U.S. government debt.
Treasury yields fell precipitously after the auction, with benchmark 10-year Treasury note yields hitting their lowest since Dec. 14 and 30-year bond yields touching their lowest since Dec. 8.
The 10-year note was last up 14/32 in price to yield 2.51 percent. The 30-year yield was up 30/32 in price to yield 3.09 percent.
Commodities Recap
Crude oil prices edged up for a fourth consecutive session on Wednesday, close to their highest levels since mid-2015, ahead of U.S. oil inventory figures and as the market awaits evidence of OPEC supply reductions in the New Year.
U.S. benchmark West Texas Intermediate (WTI) crude oil futures settled 16cents higher at $54.06 a barrel, not far from the year's high of $54.51 reached on Dec. 12.
Brent crude futures ended up 13 cents at $56.22 a barrel. The international benchmark hit $57.89 on Dec. 12, its highest since July 2015.
Gold prices edged higher on Wednesday as subdued cash demand and investor short-covering helped offset a stronger U.S. dollar.
Spot gold was up 0.27 percent at $1,141.92 per ounce by 2:18 p.m. EST (1918 GMT), after hitting $1,148.98 on Tuesday, the strongest since Dec. 14.
The most-active U.S. gold futures for February delivery settled up $2.1, or 0.18 percent, at $1,140.90 per ounce.
