Market Roundup
- Japan Chief Cab Sec Suga – FX policy is top Abe priority.
- Foreigners nab growth stocks in Tokyo, value investors sell – Nikkei.
- Japan’s current account surplus undergoing seismic shift – Nikkei.
- Japan November nationwide core CPI -0.4% y/y, Dec Tokyo core -0.6%, -0.3% and -0.4% eyed, weak, Tokyo Dec core drop largest since Feb ’13, Nov core-core +0.1% y/y, rebound in prices eyed in ’17, energy/commodities up.
- Japan November household spending -0.6% m/m, -1.5% y/y, +0.4% and +0.2% eyed.
- Japan November unemployment 3.1%, 3.0% eyed, Oct 3.0%, jobs applicants ratio better however, as eyed at 1.41 against Oct 1.40.
- Japan November crude imports -4.4% y/y, LNG +12.7%, thermal coal +2.2%.
- China growth reassuring for weak and vulnerable global economy – Xinhua.
- China November industrial profits +14.5% y/y, Jan-Nov +9.4%, low ’15 base, rebound in raw materials cited.
- China central government debt slightly up in Q3 to CNY11.7 trln, +CNY530 bln from Q2, includes CNY120 bln of foreign debt, ODI up to @CNY1.12 trln this year, FDI stable at at CNY785 bln - Xinhua.
- China tourism revenue seen reaching US$1 trln in 2020 – Xinhua.
- Ex-BoE Gov King – Britain staying in EU single market makes no sense, EU facing two major problems and has answers to neither.
- Sources - ECB tells Monte Paschi to raise E8.8 bln.
Economic Data Ahead
- (0900 ET/1400 GMT) US October CaseShiller HPI 20, +0.5% m/m, +5.0% y/y eyed; last +0.4%, +5.1%.
- (1000 ET/1500 GMT) US December Richmond Fed mfg shipments, comp, services indices.
- (1000 ET/1500 GMT) US December CB consumer confidence index, 108.5 eyed; last 107.1.
- (1000 ET/1500 GMT) US December Dallas Fed mfg business index; last 10.2.
Key Events Ahead
- Australia-New Zealand, Hong Kong, UK closed for Boxing Day.
- (0615 ET/1115 GMT) ECB 7-day refinance at zero%, E35 bln allotment eyed, E32.9 bln maturing.
- (0850 ET/1350 GMT) France BTF treasury note auctions possible.
FX Recap
USD: The dollar index added 0.1 percent to 103.100, clawing back towards a 14-year high of 103.650 marked a week ago. The dollar inched up against the yen and euro on Tuesday as some investors emerged out of the holiday lull to hunt for bargains as the market entered the last trading stretch of the year.
EUR/USD: The euro slipped 0.2 percent to $1.0435 after climbing overnight to $1.0469. Intraday bias remains neutral till the time pair holds key resistance at 1.05 marks. Immediate resistance was seen at $1.0539 level. A daily close below 1.0448 will drag the parity down towards 1.0382 levels.
USD/JPY: The yen showed little reaction to Japan's inflation data, which saw core consumer prices mark the ninth straight month of annual declines in November. The dollar was up 0.3 percent at 117.420 yen after slipping to a six-day low near 117.000 the previous day in reaction to slightly lower U.S. yields. A sustained close above 118.17 is required to take the parity higher towards 120.00 marks. Alternatively, a daily close below 116.95 will drag the parity down towards 114.81 levels.
GBP/USD: The U.S. currency also rose against the pound, which slipped 0.2 percent to $1.2272, putting it closer to a 1-1/2-month low of $1.2230 set on Friday. Short term bias remains bearish till the time pair holds key resistance at 1.2350 levels. On the other side, current downside movement will take the parity towards key supports around 1.2108 levels.
AUD/USD: The Australian dollar was down 0.3 percent at $0.7175, inching back towards a seven-month low of $0.7160 plumbed late last week on concerns over China's economic growth. Pair made intraday high at 0.7190 and low at 0.7172. A consistent close below 0.7170 will drag the parity towards key supports around 0.7142 and 0.7058 marks respectively. On the top side, key resistances are seen at 0.7260, 0.7312 and 0.7369 marks.
NZD/USD: The New Zealand dollar fell 0.2 percent to $0.6882, paring the gains made the previous day. The kiwi was close to $0.6863, a near seven-month trough plumbed on Friday against the broadly stronger dollar.
Equities Recap
South Korea’s Kospi was trading 0.16 percent higher at 2,041.72 points.
Tokyo's Nikkei was trading 0.08 percent higher at 19,443.26 points.
Shanghai composite index to open down 0.2 pct at 3,117.39 points and China's CSI300 index to open down 0.1 pct at 3,319.21 points.
Taiwan stocks open up 0.1 pct at 9,120.88 points.
India’s NSE Nifty was trading around 0.13 percent higher at 7,918.70 points and BSE Sensex was trading at 0.03 percent lower at 25,815 points.
Commodities Recap
Gold prices rose slightly on Tuesday but trading was thin as investors looked for directions after the long Christmas weekend, even as a firm dollar capped gains. Spot gold was up 0.3 percent at $1,136.80 an ounce by 0310 GMT, after earlier edging down to $1,131.35. U.S. gold futures rose 0.4 percent to $1,138.20 per ounce.
Oil prices were little changed on Tuesday in light pre-New Year holiday trading with markets adopting a wait-and-see stance less than a week before the first output cut deal agreed between OPEC and non-OPEC members in 15 years is scheduled to kick in. London Brent crude for February delivery was down 1 cents at $55.15 a barrel by 0335 GMT after settling up 11 cents on Friday. Oil markets were closed on Monday after Christmas at the weekend. NYMEX crude for February delivery was up 10 cents at $53.12 a barrel, after closing at a 17-month high on Friday.
Treasuries Recap
10-year U.S. treasury yield was at 2.563 percent vs U.S. close of 2.539 percent on Friday.
BOJ offers to lend Y 1.9146 trln of JGBs on spot basis through 12/28 as a secondary source of JGBs.
