Market Roundup
- Fed Minutes most policymakers anticipated US econ conditions & outlook could well warrant hike at Dec meeting, saw downside risks to global economy & financial developments diminished.
- Fed's Dudley doesn't expect market chaos after most well-advertised rate rise in history.
- Fed's Lacker still leans to rate rise as he did in Sept, Oct; doesn't see any bubbles now.
- Fed's Lockhart expects inflation to rise gradually as oil, USD stabilize.
- Fed's Kaplan Economy needs accommodative policy for some time to come, accommodative policy need not mean ZIRP.
- BOE's Broadbent: market rate bets can mislead, Investors shouldn't "focus obsessively" on BoE forecasts, Growth is best guide to likely BoE action.
- Fed rate hike likely to trigger next leg of commodity losses.
- Base metals hit multi-year lows on dollar, China jitters.
- DoubleLine's Baha fears market 'accident' from Fed rate hike.
- Brazil Congress upholds veto on retiree benefits, USD/BRL moves lower.
Looking Ahead - Economic Data (GMT)
- 21:45 New Zealand Producer Prices- Inputs QQ Q3 -0.3%-previous
- 21:45 New Zealand PPI Output* Q3 -0.2%-previous
- 23:50 Japan Foreign Bond Investment w/e 1034.7b- previous
- 23:50 Japan Foreign Invest JP Stock w/e 170.4b- previous
- 23:50 Japan Exports YY*Oct forecast -2.1%, 0.6%- previous
- 23:50 Japan Imports YY* Oct forecast -8.6%, -11.1%- previous
- 23:50 Japan Trade Balance Total Yen*Oct forecast -292.0b, -114.5b- previous
Looking Ahead - Events, Other Releases (GMT)
- 02:00 Japan Bank of Japan announces rate decision
- 06:30 Japan BOJ Governor Kuroda Press Conference Post Policy Meeting
Currency Summaries
EUR/USD is likely to find support at 1.0600 levels and currently trading at 1.0652 levels. The pair has made session high at 1.0672 and hit lows at 1.0616 levels. The dollar inched to 7-month high against a euro on Wednesday in choppy trading after minutes of the last Federal Reserve policy meeting suggested renewed optimism for rate hike in December given the improvement in the U.S. economy. The minutes showed several Fed officials wanted to push for a possible December hike at the central bank's last meeting in October. It was an unusually direct reference to the December increase, with only few members expressing concerns revising interest rate. The single currency rose 0.2 percent to $1.0671 after FOMC meeting release, having dropped to a seven-month low of $1.0629 earlier in the US session . The euro has been losing ground on expectations the European Central Bank will ease further in December, with many predicting it will reach. To the upside, immediate resistance can be seen at 1.00689. To the downside, immediate support level is located at 1.0627 levels.
GBP/USD is supported in the range of 1.5150 and currently trading at 1.5235 levels. It reached session high at 1.5244 and hit low at 1.5185 levels. Sterling rose against the dollar on Wednesday, as the investors waiting for UK retail sales data Thursday to know further for direction . Earlier, the pound jumped to $1.5244 after Bank of England Deputy Governor Ben Broadbent said at a event that investors should not put too much faith in market bets on when the bank will raise interest rates. Those bets now indicate the first increase won't come for more than a year. But sterling eased back when U.S. traders got to their desks, turning flat on the day at $1.5215. It was also steady against the euro at 70.02 pence, close to a 3 1/2-month high of 69.85 pence touched on Tuesday and an eight-year peak of 69.35 pence hit in's economy has grown more quickly than almost any other in the developed world over the past two years but inflation remains below zero and wage growth, while rising, is weaker than before the financial crisis. To the upside, immediate resistance can be seen at 1.5247. To the downside, immediate support level is located at 1.5180 levels.
USD/JPY is supported around 123.00 levels and currently trading at 123.53 levels. It hit session high at 123.74 and made session lows at 123.36 levels. The dollar rose against Japanese yen on Wednesday on expectations that Federal Reserve will increase interest rate in December. The pair inched towards 123.81 in the late US session, having slipped towards 123.12 on Tuesday. Traders expect pair to break the psychological level of 124.00 and reach further higher in the coming days. Meanwhile, U.S. housing starts in October fell to a seven-month low, weighed down by a steep decline in the construction of multi-family homes, but a surge in building permits suggested the housing market remained on solid ground. The Commerce Department said, Housing starts dropped to 11 percent against the forecast of -3.9%. To the upside, immediate resistance can be seen at 123.60. To the downside, immediate support level is located at 123.17 levels.
USD/CAD is supported at 1.3294 levels and is trading at 1.3322 levels. It has made session high at 1.3368 and lows at 1.3300 levels. The Canadian dollar edged lower against the U.S. dollar on Wednesday despite weaker than expected U.S. housing starts and firmer crude oil prices, as attention turned to the Federal Open Market Committee (FOMC) minutes this afternoon. Data showing U.S. housing starts in October fell to a seven-month low hardly made a dent on the dollar. The upshot was that building permits rose, suggesting a generally solid housing market. Meanwhile, Fed officials rallied behind a possible December rate hike at the central bank's last policy meeting, but central bankers also debated evidence the U.S. economy's long-term potential may have permanently shifted lower. Prior to release of the minutes, couple Fed officials gave vote of confidence that December likely time for interest rates to rise.The currency's strongest level of the session was C$1.3299, while its weakest level was C$1.3367. To the upside, immediate resistance can be seen at 1.3330. To the downside, immediate support level is located at 1.3300 levels.
Equities Recap
European stocks ended mixed on Wednesday as the security officials launched a man hunt for another possible terror suspect that dented the investors confidence.
UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day down by 0.1 percent, Germany's Dax ended down by 0.1 percent, France's CAC finished the day down by 0.6 percent.
U.S. stocks inched higher on Wednesday after minutes from Octobers Federal Reserve policy meeting showed most of the central bankers backed a possible rate hike in December.
Dow Jones closed up by 0.03 percent, S&P 500 ended down by 0.12 percent, Nasdaq finished the day up by 0.02 percent.
Treasuries Recap
Longer-dated U.S. Treasuries fared better than shorter-dated issues on Wednesday after the release of the minutes of the Federal Reserve's policy meeting in October signaled optimism for a rate hike in December.
The 30-year yield was down 1 basis point at 3.033 percent, while the five-year's rose 2.5 basis points to 1.679 percent.
Benchmark 10-year Treasuries were down 2/32 in price for a yield of 2.268 percent, up nearly 1 basis point.
Commodities Recap
Gold prices inched higher after tapping a nearly six-year low on Wednesday as the market reacted to the minutes of a recent U.S. Federal Reserve meeting that gave mixed signals about a possible rate hike in December.
Spot gold was up 0.1 percent at $1,070.70 an ounce at 2:44 p.m. EST (1944 GMT), after falling to $1,064.95 earlier, the lowest since February 2010. U.S. gold futures for December delivery settled up 10 cents at $1,068.70 an ounce.
Oil fell to near three-month lows and U.S. crude futures slipped to below $40 a barrel before settling higher on Wednesday as short-covering lifted a market initially suppressed by worries about a global supply glut.
U.S. crude's West Texas Intermediate (WTI) futures settled up 8 cents at $40.75 a barrel, after hitting a session low at $39.91. The last time WTI traded below $40 was on .
Brent settled up 57 cents, or 1.3 percent, at $44.14, helped by a relatively better outlook for the global crude benchmark versus WTI.
