Market Roundup
• US existing home sales rise to near 10-year high; 5.61m v 5.5m forecast, 5.57m previous.
• US median home price for existing homes 234.9k +6.8% from Nov 15.
• Euro rebounds against dollar from lowest since 2003, GBP stuck near 1-month lows against USD.
• Euro zone consumer sentiment rises to -5.1 in Dec from -6.1 in Nov.
• Investors shun Italian bank Monte Paschi's share offer, The Italian govt is expected to to bail it out.
• Door closing on ultra-long EZ govt borrowing; Trump and ECB taper spark sharp yield rise.
• Gold edges higher as dollar retreats from 14-year peak.
• Brazil rate futures drop as inflation eases more than expected
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 1.0348levels and currently trading at 1.0422 levels. The pair has made session high at 1.0651 and hit lows at 1.0590 levels. Euro inched slightly against the dollar on Wednesday as the dollar eased from 14-year highs on Wednesday, giving back some of the gains chalked up since Donald Trump's U.S. election victory as investors took profits on the recent dollar rally. The greenback has chalked up all its 4.5 percent gains for the year since the Nov. 8 U.S. election, as traders have bet that President-elect Donald Trump and a Republican-controlled Congress will embark on steep tax cuts and fiscal spending to stimulate the economy. The dollar index which measures the greenback against euro, yen and four other currencies was 0.26 percent lower at 102.02. It reached 103.65 on Tuesday, which was its highest since December 2002. The euro was up 0.4 percent at $1.0428 rebounding from $1.0352 on Tuesday, the lowest since January 2003.
GBP/USD is supported in the range of 1.2309 levels and currently trading at 1.2349 levels. It reached session high at 1.2389 and dropped to session low at 1.2632 levels. Sterling declined against the dollar on Wednesday as sterling was weighted down by uncertainty over how Britain's departure from the European Union will pan out. Data showed Britain's public finances was a slightly bigger-than-expected deficit in November, but on track to meet new, less ambitious deficit reduction goals, had little impact on the pound. Sterling has for the past six months been less sensitive than usual to economic data, driven more by concerns over Britain's EU exit. Any signs that a hard Brexit, in which Britain loses access to the single market, may be on the cards have tended to drive down the currency, with indications to the contrary giving it a boost. Sterling was last trading down on the day at $1.2365, close to Tuesday's one-month low of $1.2313.
USD/CAD is supported at 1.3355 levels and is trading at 1.3401 levels. It has made session high at 1.3148 and lows at 1.3425 levels. The Canadian dollar weakened against its U.S. counterpart on Wednesday as oil prices declined and the greenback retreated from a 14-year high. The U.S. dollar weakened against a basket of major currencies, giving back some of the gains chalked up since U.S. President-elect Donald Trump's victory last month. Oil, one of Canada's major exports, fell after U.S. crude inventories data. U.S. crude stocks rose by 2.3 million barrels in the week to Dec. 16 as refineries hiked output, while gasoline stocks and distillate inventories fell, the U.S. Energy Information Administration said. The Canadian dollar was last trading at C$1.3410 to the greenback, or 74.78 U.S. cents, slightly weaker than Tuesday's close of C$1.3367, or 74.81 U.S. cents.
AUD/USD is supported around 0.7220 levels and currently trading at 0.7247 levels. It hit session high at 0.7280 and made session lows at 0.7239 levels. The Australian dollar declined against the dollar on Wednesday after Australian dollar was weighed down after oil prices fell and traders anticipated multiple United States interest rate hikes in 2017 after this year's single move. The Australian dollar stood at $0.7249, from a trough of $0.7223 touched on Tuesday. The Aussie is now down 0.3 percent for the year, a far cry from gains of more than 6.5 percent in early November. An extended fall in Chinese steel and iron ore futures over the past five days also added pressure on the Aussie. Iron ore and coal are Australia's two biggest exports. The Aussie has been on a downward trend since Donald Trump won the November U.S. presidential election, as his policies are widely seen as inflationary. The outlook for the Aussie appears gloomy, with the next stop seen at $0.7150. Key resistance lies at 73 U.S. cents, a breach of which could set a small rally.
Equities Recap
Europe retreated from an 11-month high on Monday with falls in shares such as Swedish biometric technology firm Fingerprint and Swiss drugmaker Lonza outweighing a rally in oil stocks which reached near 17-month highs.
UK's benchmark FTSE 100 closed down by 1.1 percent, the pan-European FTSEurofirst 300 ended the day down by 0.45 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day down by 0.1 percent.
U.S. stocks fell on Wednesday, with healthcare and real estate shares losing ground a day after the Nasdaq Composite and the Dow Jones Industrial Average hit record highs.
Dow Jones closed down by 0.15 percent, S&P 500 ended down 0.24 percent, Nasdaq finished the day down by 0.22 percent.
Treasuries Recap
U.S. Treasury debt prices gained slightly in light trading volumes before the Christmas holiday with no major economic data on Wednesday, as investors evaluated how many times the Federal Reserve is likely to raise interest rates next year.
U.S. benchmark 10-year notes rose 7/32 in price to yield 2.54 percent, down from 2.57 percent late on Tuesday.
Commodities Recap
Gold was little changed but held above last week's 10-1/2-month low on Wednesday as a retreat in the dollar from the previous session's 14-year peak prompted some buyers to hunt bargains after the metal's sharp slide from its November high.
Spot gold was down 0.06 percent at $1,131.11 an ounce by 2:30 p.m. ET (1930 GMT), after trading as high as $1,137.12. U.S. gold futures for February delivery settled down 0.04 percent at $1,133.20 per ounce.
Oil futures fell on Wednesday after Libya said it expects to boost production over the next few months and a report showing a surprise build in U.S. crude inventories last week.
Brent futures for February delivery fell 89 cents, or 1.6 percent, to settle at $54.46 a barrel, while U.S. West Texas Intermediate crude for February lost 81 cents, or 1.5 percent, to $52.49 per barrel.
Even though WTI futures for February were down, the U.S. front-month gained about 0.5 percent due to the contract roll from lower-priced January to the higher-priced February on Tuesday and closed at its highest level in over a week.
