Market Roundup
- Australian consumers will spend tax windfall in time - RBA
- Oil prices slip on demand concerns
- Gold steady ahead of Fed meet
Economic Data Ahead
- (0400 ET/0900 GMT) Italy Industrial Output
- (0430 ET/0930 GMT) UK Trade Balance
- (0430 ET/0930 GMT) UK industrial production
- (0430 ET/0930 GMT) UK manufacturing production
- (0430 ET/0930 GMT) UK Goods Balance
- (0430 ET/0930 GMT) UK gross domestic production
- (0500 ET/1000 GMT) EZ ZEW Survey- Economic Sentiment
- (0500 ET/1000 GMT) German ZEW Survey- Economic Sentiment
Key Events Ahead
- No significant event scheduled
FX Beat
DXY: The dollar index edged lower ahead of the U.S. Federal Reserve meeting ending Dec. 11. The Fed is widely expected to keep interest rates on hold, but investors will scrutinize the Fed’s statement and its economic forecasts for clues about future policy decisions. The greenback against a basket of currencies traded flat at 97.63, having touched a low of 97.36 on Friday, its lowest since November 4.
EUR/USD: The euro rose, extending previous session gains, as risk sentiment revived after data showed investor morale in the euro zone improved for the second month in a row. The European currency traded 0.05 percent up at 1.1069, having touched a low of 1.1039 on Friday, its lowest since December 2. Investors’ attention will remain on a series of data from the euro zone economies and EZ ZEW survey- economic sentiment, ahead of the U.S. unit labour cost data. Immediate resistance is located at 1.1084, a break above targets 1.1097. On the downside, support is seen at 1.1044 (21-DMA), a break below could drag it below 1.1025.
USD/JPY: The dollar surged, halting a 3-day rally after China stated that it hoped to make a trade deal with the United States as soon as possible. Investors now await the U.S. Federal Reserve, which is expected to hold rates steady on Wednesday. The major was trading 0.1 percent up at 108.63, having hit a low of 108.42 on Monday, its lowest since Nov 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unit labour cost data. Immediate resistance is located at 108.85 (21-DMA), a break above targets 108.99 (10-DMA). On the downside, support is seen at 108.34, a break below could take it near at 108.18.
GBP/USD: Sterling steadied near an 8-month peak hit in the previous session, supported by opinion polls that point to the ruling Conservative Party winning Britain’s general election on Thursday. The major traded 0.1 percent up at 1.3150, having hit a high of 1.3181 on Monday, it’s highest since May 6. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3196, a break above could take it near 1.3246. On the downside, support is seen at 1.3100, a break below targets 1.3067. Against the euro, the pound was trading up at 84.14 pence, having hit a high of 83.92 on Monday, it’s highest since May 2017.
AUD/USD: The Australian dollar rebounded from a 1-week low after Reserve Bank of Australia Governor Philip Lowe stated that recent figures on third-quarter gross domestic product had been in line with the bank’s forecasts. The Aussie trades 0.05 percent up at 0.6824, having hit a low of 0.6818 earlier, it’s lowest since December 4. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6803, a break below targets 0.6782. On the upside, resistance is located at 0.6865, a break above could take it near 0.6882.
NZD/USD: The New Zealand dollar gained, hovering towards multi-month peak after President Donald Trump said that the United States is doing well with China in securing a trade deal. The Kiwi trades 0.2 percent up at 0.6558, having touched a high of 0.6576 on Friday, its highest level since August 6. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6592, a break above could take it near 0.6619. On the downside, support is seen at 0.6519, a break below could drag it below 0.6503
Equities Recap
Asian shares nudged lower as investors fretted over a December 15 deadline for the next round of U.S. tariffs on Chinese imports to take effect.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.05 percent.
Tokyo's Nikkei eased 0.05 percent to 23,419.48 points, Australia's S&P/ASX 200 index declined 0.3 percent to 6,706.90 points and South Korea's KOSPI gained 0.3 percent to 2,094.88 points.
Shanghai composite index rose 0.05 percent to 2,915.68 points, while CSI 300 index traded 0.05 percent up at 3,897.14 points.
Hong Kong’s Hang Seng traded 0.05 percent lower at 26,490.62 points. Taiwan shares shed 0.3 percent to 11,627.84 points.
Commodities Recap
Crude oil prices steadied, supported by OPEC’s agreement with associated producers at the end of last week to deepen crude output cuts in early 2020. International benchmark Brent crude was trading 0.1 percent up at $64.13 per barrel by 0418 GMT, having hit a high of $64.86 on Friday, its highest since September 23. U.S. West Texas Intermediate was trading 0.1 percent up at $58.91 a barrel, after rising as high as $59.81 on Friday, its highest since September 17.
Gold prices consolidated within narrow ranges ahead of a policy meeting by the U.S. central bank, while investors awaited clarity on whether a next round of U.S. tariffs on Chinese imports will take effect this weekend. Spot gold was trading flat at $1,460.56 per ounce by 0420 GMT, having touched a low of $1458.57 on Monday, its lowest since Dec. 2. U.S. gold futures were flat at $1,465.40.
Treasuries Recap
The U.S. two-year yield was at 1.6151 percent, down from its close of 1.627 percent on Monday, while the 10-year Treasury yield was at 1.8225 percent from a U.S. close of 1.831 percent on Monday.
