Market Roundup
- Singapore Nov All Items CPI -0.8 pct Y/Y (Reuters Poll -0.7 pct)
- Singapore Nov Core CPI +0.2 Pct Y/Y (Reuters Poll +0.4 pct)
- Malaysia's November CPI +2.6 pct on YR, Exceeds Reuters Poll Forecast 2.3 Pct
- U.S. Personal Consumption in Nov. Rose to $12.43trln from a Revised $12.39trln in Oct.: BEA
- BEA: Release of U.S. Nov Personal Consumption Expenditure Data was Inadvertent
- PBOC Sets Yuan Mid-Point at 6.4731 / Dlr Vs Last Close 6.4788
- New Zealand Nov Month Trade Deficit Nzd779mln (Reuters Poll Nzd-809.5mln)
- New Zealand Nov Annual Trade Deficit bln (Reuters Poll Nzd-3.76bln)
- New Zealand Nov Month Imports bln (Reuters Poll bln)
- New Zealand Nov Month Exports bln (Reuters Poll bln)
- S&P-Mexico 'BBB+/A-2' Foreign Currency and 'A/A-1' Local Currency Sovereign Credit Ratings Affirmed; Outlook Remains Stable
- S&P - Ratings on Mexico reflect its Cautious Fiscal and Monetary Policies, which has contributed to Limited Government Deficits and Low Inflation
- S&P-Mexico's Outlook on Long-Term Rating Remains Stable Based on Expectation of Continuity in Economic Policies in the coming Three Years
- S&P-Project that Mexico's General Government Debt will rise by 2%-3% of GDP on Average in the Next Three Years
Economic Data Ahead
- (0245 ET/0745 GMT) France Consumer Spending
- (0245 ET/0745 GMT) France GDP
- (0300 ET/0800 GMT) Switzerland KOF Indicator
- (0400 ET/0900 GMT) Italy Industrial Sales
- (0400 ET/0900 GMT) Norway Labour Force Survey
- (0400 ET/0900 GMT) Italy Industrial Orders
- (0430 ET/0930 GMT) Great Britain Business invest
- (0430 ET/0930 GMT) Great Britain GDP
- (0430 ET/0930 GMT) Great Britain Current Account
- (0500 ET/1000 GMT) Italy Retail Sales
Key Events Ahead
No Major Events Scheduled
FX Beat
USD: The dollar steadied in Asian trade on Wednesday after overnight data posted a mixed picture of the U.S. economy, with major currency pairs trading in narrow ranges as traders wound down in a holiday-heavy week. The dollar index edged up to 98.276 after marking three losing sessions, but was still below a 2- week high of 99.294 set on Thursday last week.
EUR/USD: The euro edged down in early session, giving back some of the gains it made on shortcovering this week despite the indecisive outcome of the weekend elections in Spain, casting a cloud over the future of economic reforms. The pair has been on the recovery from post Fed hike. Mixed US data and poor US existing home sales at 4.76m vs 5.35m exp, further supporting the pair. Currently the pair trades at 1.0940 levels, 0.14% down, after making a low of 1.0932 levels. Immediate support is seen at 1.0920 (10- DMA), while on the upside, resistance is loacted at 1.0984 (Previous day high).
USD/JPY: The dollar was down about 0.1 percent at 121.01 yen, well below its Friday high of 123.55 and not far from a 1-week low of 120.72 touched on Tuesday. Volume was expected to be relatively thin, with Tokyo markets closed for the Japanese emperor's birthday and many investors away for the Christmas holiday later this week. The pair trades between the range of 121.13 - 120.95 on the day. Immediate support is seen at 120.84 (Dec 21- Low), while on the upside, resistance is located at 121.35 (Dec 14 High).
AUD/USD: The Australian dollar has edged down to $0.7233, after going as high as 0.7243, from a low of $0.7181 on Tuesday. The Aussie is down more than 11 percent for the year, largely due to a diverging interest rate outlooks between the United States and Australia. The pair currently trades between the range of 0.723 - 0.7226. Support is seen at 0.7207 (10- DMA), while resistance is located at 0.7249 (Previous day high) and break above can take the pair at 0.7269 (Dec -14 High). Against its Canadian counterpart, the Aussie held its own at $1.0008. It broke key resistance on Tuesday when it gained up to C$1.0108, the highest level in over a year.
NZD/USD: The New Zealand dollars pulled ahead on Wednesday as investors sought their relatively higher yields, with market liquidity further drained by a Tokyo holiday in thin trading. The kiwi is trading at $0.6816, hovering close to a 2-month peak of $0.6835 touched on Tuesday. It has been on the rise ever since the Reserve Bank of New Zealand indicated it was unlikely to cut rates further from 2.5 percent, easily the highest among developed nations. Immediate resistance is located at 0.6835 levels and break above can take the pair 0.6845 (Oct- 20 High). On the downside, support is seen at 0.6759 (5 - DMA). The kiwi made headway against a battered pound which skidded 1 percent on Tuesday to touch a six-month trough of NZ$2.1700.
Equities Recap
Asia shares edged higher on Wednesday following a modest bounce on Wall Street, while the dollar drifted lower and oil found some relief from recent relentless selling.
MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.4 percent to the highest in almost two weeks, while Tokyo markets closed for Japanese emperor's birthday.
Australia's S&P/ASX 200 Index closed up 0.55 pct at 5,144.80 points, while Taiwan Stocks edged up 0.3 pct at 8,315.70 points with Seoul Shares up 0.27 pct.
Commodities Recap
Gold eased on Tuesday after a 2-day rally, shrugging off the weak dollar and rebound in oil prices as dealers squared their books ahead of year-end amid typically light trade leading up to the Christmas holiday. The metal is up 2.5 percent from last week's trough, which was near the lowest level since early 2010, reached after the Federal Reserve announced its first rate rise in nearly a decade, raising uncertainty over the pace of further increases. Spot gold was down 0.5 percent at $1,072.20 an ounce at 2017 GMT.
U.S. crude prices rose to a premium over internationally traded Brent on Wednesday following a report of a surprise dip in U.S. inventories and the potential for more exports in an oil market which still suffers from ballooning oversupply. Brent edged back to $36.44 by 0340 GMT, briefly flipping WTI from a long-standing discount into a slight premium over the international benchmark for the first time since a short period in November 2014.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 2.2375 percent down by 0.002. Yields on 10-year and 30-year Treasury paper both rose around 4 basis points.
Australian government bond futures retreated from multi-week peaks, with the 3-year bond contract down 1 tick at 97.940. The 10-year contract lost 3.5 ticks to 97.1650, while the 20-year contract shed 3 ticks to 96.6800.
New Zealand government bonds eased, sending yields 2.5 basis points higher across the curve.
Canadian government bond prices were lower across the maturity curve, with the benchmark 10-year dropping 30 Canadian cents to yield 1.414 percent and the 2-year price down 6.5 Canadian cents to yield 0.521 percent. The Canada-U.S. 10-year spread widened an additional basis point to -82.4 basis points, extending recent out performance for Canadian government bonds and trading at a record wide gap.
