Market Roundup
• U.S. consumer confidence hits 15-year high in December.
• Conference Board consumer confidence index 113.7 vs 109.0 consensus.
• US Oct home prices +0.6 pct S/A vs forecast +0.5- S&P/Case-Shiller.
• Oil jumps 1.7 pct, adds to year's gains ahead of OPEC cuts.
• Meeting of OPEC, non-OPEC monitoring committee proposed for Jan. 13 in Abu Dhabi-sources.
• Brazil posts larger than forecast 39.1 bln reais primary budget deficit in November.
• Brazil central bank sees public sector overall budget deficit at 8.6% GDP in 2017.
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Industrial output prelim mm Nov 1.60% forecast 0.00% -previous
• 23:50 Japan Retail Sales YY Nov -0.10% - previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.0405 levels and currently trading at 1.0455 levels. The pair has made session high at 1.0463 and hit lows at 1.0442 levels. Euro slightly inched against the dollar on Tuesday as trading resumed after the Christmas break. Trading volume across markets is expected to remain thin as it usually is in the week between Christmas and New Year. The market produced a limited reaction to U.S. consumer confidence data that rose to its highest level in 15 years this month as expectations for strength in job growth, business conditions and the stock market continued to build following the U.S. presidential election. U.S. consumer confidence shot to its highest in more than 15 years in December as expectations for strength in job growth, business conditions and the stock market continued to build following the U.S. presidential election, a survey said on Tuesday. The Conference Board said its Consumer Confidence Index rose to 113.7 this month from an upwardly revised 109.4 in November. The euro was slightly up against the greenback at $1.0457.
GBP/USD is supported in the range of 1.2200 levels and currently trading at 1.2279 levels. It reached session high at 1.2282 and dropped to session low at 1.2243 levels. Sterling declined against the dollar on Tuesday as sterling came under selling pressure as concerns over next year's Brexit negotiations continued to weigh on the cable. Also, continued weakness against the dollar kept the pound near a one-month low against the greenback in quiet trading ahead New Year. The U.S. currency soared to 14-year highs against a basket of currencies last week after the Federal Reserve hinted that rates could rise three times over the course of next year up from a forecast of two hikes at the Fed's September meeting. Sterling already weak because of Brexit concerns skidded along with other currencies, hitting a low of $1.2243 in the US session. Sterling was last down 0.34 percent against the dollar at $1.2255, with analysts attributing the drop to concerns over next year's Brexit negotiations.
USD/CAD is supported at 1.3475 levels and is trading at 1.3566 levels. It has made session high at 1.3568 and lows at 1.3530 levels. The Canadian dollar declined against its U.S. counterpart on Tuesday as loonie was pressured by the recent fall in Canada's bond yields below U.S. yields as investors braced for divergence in monetary policy between the Federal Reserve and the Bank of Canada. Losses for the loonie came despite higher oil prices. U.S. crude was up 90 cents, or 1.7 percent, to $53.92 a barrel. Brent crude rose 94 cents, or 1.7 percent, to $56.10 a barrel as of 1153 a.m. ET (1653 GMT). The global benchmark hit $57.89 on Dec. 12, highest since July 2015.The members of an OPEC and non-OPEC committee formed to monitor the market may meet on Jan. 13, two sources said. Oil rallied further after news of the meeting, which may give an early indication of compliance with the deal. Major OPEC members such as Saudi Arabia and Iraq have informed customers of lower supplies. But Libya and Nigeria which are exempt from reductions because conflict has curbed their output have been increasing production. The Canadian dollar was last trading at C$1.3575 to the greenback, weaker than Friday's close of C$1.3538.
USD/JPY is supported around 116.90 levels and currently trading at 117.45 levels. It peaked to hit session high at 117.61 and made session lows at 117.28 levels. The U.S. dollar rose against the yen on Tuesday as the greenback strengthened against Japanese yen after strong US economic data reinforced the view that U.S. economy is strengthening at a faster pace. The S&P CoreLogic Case-Shiller composite index of home prices in 20 metropolitan areas rose 0.6 percent in October from a revised 0.5 percent in September on a seasonally adjusted basis. The data helped underscore expectations that the Fed would raise interest rates at a faster pace next year, a view that gained traction after the Fed on Dec. 14 projected three rate hikes next year, up from the two foreseen in September. The dollar extended its gains to a fresh session high against the yen of 117.60 yen putting it up about 0.4 percent against the Japanese currency on the day. The dollar remained below a 10-month high of 118.66 yen touched Dec. 15 and a 14-year high against a basket of major currencies touched Dec. 20. The dollar index, which measures the greenback against a basket of six major rivals, was last up just 0.06 percent at 103.070, below the 14-year peak of 103.650.
Equities Recap
European shares steadied on Tuesday as trading in some markets resumed after the Christmas break, with Parmalat soaring after its French owner announced a buyout of the Italian dairy group.
The pan-European STOXX 600 index was up 0.1 percent, Germany's Dax ended up by 0.2 percent, France’s CAC finished the day up by 0.2 percent. While the UK market was closed for a public holiday.
U.S. stocks rose on Tuesday, supported by upbeat consumer and housing data, in one of the lowest-volume sessions of the year.
Dow Jones closed up by 0.06 percent, S&P 500 ended up 0.22 percent, Nasdaq finished the day up by 0.44 percent.
Treasuries Recap
U.S. Treasury yields rose on Tuesday to their highest levels in nearly a week after strong data reinforced the theme of a strengthening U.S. economy and rising inflation.
Benchmark 10-year Treasury notes fell 9/32 in price to yield 2.571 percent, while yields on the 30-year bond rose to 3.151 percent, the highest since Dec. 21.
Shorter-dated U.S. 2-year and 3-year note yields rose to their highest since Dec. 20 and Dec. 21, respectively, after light bidding for the government's auction of $26 billion in 2-year notes, which sold at a yield of 1.28 percent.
Commodities Recap
Gold prices rose on Tuesday to a near two-week high on weak Japanese inflation data, but trading was thin with traders in the United States returning after the long Christmas weekend and London markets still closed.
Spot gold was up 0.5 percent at $1,139.42 an ounce by 2:48 p.m. EST (1948 GMT) after hitting its highest since Dec. 14 at $1,148.98 an ounce.
U.S. gold futures ended the session 0.45 percent higher at $1,138.80 per ounce.
Oil gained 1.5 percent Tuesday, continuing its year-end rally with support from expectations of tighter supply once the first output cut deal between OPEC and non-OPEC producers in 15 years takes effect on Sunday.
U.S. crude settled up 88 cents, or 1.7 percent, to $53.90 a barrel. Brent crude settled up 93 cents, or 1.7 percent, to $56.09 a barrel. The global benchmark hit $57.89 on Dec. 12, highest since July 201
