Market Roundup
•China Exports (Nov) 5.80M forecast, 11.20M previous
•China Imports (Nov) -4.70M forecast, -3.70M previous
•China Trade Balance (Nov) 692.80B, 682.00B forecast, 679.10B previous
•China Exports (YoY) (Nov) 6.7%, 8.5% forecast, 12.7% previous
•China Imports (YoY) (Nov) -3.9%, 0.3% forecast, -2.3% previous
•China Trade Balance (USD) (Nov) 97.44B, 94.00B forecast, 95.27B previous
•Australia RBA Interest Rate Decision (Dec) 4.35%, 4.35% forecast, 4.35% previous
Looking Ahead Economic Data (GMT)
•09:00 Italian Industrial Production (MoM) (Oct) -0.1% forecast, -0.4% forecast
09:00 Italian Industrial Production (YoY) (Oct) -4.0% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro traded in a tight range against the dollar on Tuesday as investors took a cautious approach ahead of key economic events later in the week, including U.S. inflation data on Wednesday and a European Central Bank (ECB) policy meeting on Thursday. The ECB is widely expected to cut rates again as inflation continues to ease, with financial markets closely watching for signs that the slowing economy may prompt faster action in the future.Traders are anticipating a 25 basis point rate cut, which would mark the fourth reduction this year, reinforcing the idea of consecutive rate cuts. A sharp slowdown in November's business activity has fueled speculation of a larger move in December, and ECB official François Villeroy de Galhau indicated that the bank should keep its options open for a bigger cut if necessary. Immediate resistance can be seen at 1.0605(38.2%fib), an upside break can trigger rise towards 1.0637(30SMA).On the downside, immediate support is seen at 1.0458(23.6%fib), a break below could take the pair towards 1.0417(Lower BB).
GBP/USD: The British pound edged higher on Tuesday as traders looked ahead to a reading of U.S. inflation due the following day for further clues on the path of Federal Reserve policy.While markets have priced in a quarter-point Fed rate cut on Dec. 18 as a near certainty, the consumer price index due on Wednesday could shine some light on how much room policymakers have for easing next year.Data on Friday showed U.S. job growth surged in November, but a rise in the unemployment rate to 4.2% pointed to an easing labor market that should allow the Fed to cut interest rates again this month. Immediate resistance can be seen at 1.2866(Higher BB), an upside break can trigger rise towards 1.2789 (SMA 30).On the downside, immediate support is seen at 1.2629(38.2%fib), a break below could take the pair towards 1.2507(23.6%fib).
AUD/USD:The Australian dollar weakened on Tuesday after the Reserve Bank of Australia (RBA) softened its tone on the policy outlook, fueling expectations of an earlier interest rate cut. The RBA kept interest rates unchanged, as widely anticipated, but signaled that the board had gained "some confidence" that inflation was moving back towards its target.However, the statement omitted a previous remark that the RBA was "not ruling anything in or out," as well as the emphasis on the need for policy to remain restrictive. Speaking after the policy meeting, RBA Governor Michele Bullock left the door open to a potential rate cut as soon as February, adding further uncertainty to the market's expectations. Immediate resistance can be seen at 0.6483(38.2%fib), an upside break can trigger rise towards 0.6491(Daily high).On the downside, immediate support is seen at 0.6406(23.6%fib), a break below could take the pair towards 0.63826(Lower BB).
USD/JPY: The dollar was little changed against the yen on Tuesday as investors awaited crucial U.S. CPI data on Wednesday, which is expected to strengthen expectations of a rate cut by the Federal Reserve at its meeting later this month. Beyond U.S. CPI, the main events of interest for investors this week are the European Central Bank meeting on Thursday, where a quarter-point cut is baked in, and China's closed-door Central Economic Work Conference, which sets key targets and policy intentions for next year.Elsewhere, the Bank of Canada and the Swiss National Bank decide policy on Wednesday and Thursday, respectively, with deep rate cuts expected from both. Immediate resistance can be seen at 150.97 (38.2%fib) an upside break can trigger rise towards 153.62 (23.6%fib). On the downside, immediate support is seen at 148.82(50%fib) a break below could take the pair towards 147.50(Lower BB).
Equities Recap
Asian equities gained on Tuesday after China promised additional policy stimulus to support economic growth and further ease monetary policy.
Japan's tech-heavy Nikkei N225 up 0.55% , and South Korea's KOSPI was up by 2.43%. China’s A50 gained by 1.02%.
Commodities Recap
Gold prices continued to rise on Tuesday, supported by China's commitment to increase policy stimulus to boost economic growth. Investors also focused on the upcoming U.S. inflation data, looking for further clues on the Federal Reserve's interest rate trajectory.
Spot gold was up 0.5% at $2,671.03 per ounce, as of 0547 GMT. U.S. gold futures rose 0.3% to $2,693.50
Oil prices edged lower on Tuesday as concerns over the potential fallout from Syrian President Bashar al-Assad's overthrow eased.
Brent crude futures were down 32 cents, or about 0.4%, at $71.82 per barrel. U.S. West Texas Intermediate crude futures were down 37 cents, 0.5% lower, at $68 at 0458 GMT. Both benchmarks climbed more than 1% on Monday.
