Market Roundup
- Dalian iron ore futures jumped as much as 4% on Wed, closed up 2.9%.
- Brent down 1.8%, Light Crude Feb off 2.5%.
- Canadian, Australian dollars dip as oil falls.
- EUR/USD plays a tight 1.0943-1.0919 range.
- USD/JPY continues sideways, holds in 120.35/120.58 range on Wed.
- GBP/USD loss consolidation after fresh 8-month low at 1.4786 Tuesday.
- Yuan hits 4-year low of 6.60/dollar offshore.
- UK Dec Nationwide house prices 0.8% m/m, 4.5% y/y vs previous 0.1%/3.7%. 0.5%/3.8% expected.
- EZ Nov Money-M3 Annual Growth 5.1% vs previous 5.3%. 5.4% expected.
- EZ Nov Loans to Households 1.4% vs previous 1.2%.
- EZ Nov Loans to Non-Fin 0.9% vs previous 0.6%.
- Swiss UBS consumption indicator 1.66 vs previous 1.63 revised.
- Global growth will be disappointing in 2016 says IMF's Lagarde.
- Russian finmin sees oil price at $40 per barrel in 2016.
- Swedish Central Bank Gov Ingves: Ready for FX intervention after SEK strengthening.
Economic Data Ahead
- (1000 ET/1500 GMT) The National Association of Realtors releases U.S. Pending Home Sales data for the month of November, analysts expect home sales likely rose 0.5 pct after gaining 0.2 pct in October.
- (1030 ET/1530 GMT) EIA Crude Oil Stocks Change for the week ending Dec 25 likely to be at -2.500M vs previous -5.877M.
Key Events Ahead
No Major Events Scheduled
FX Beat
USD: The dollar slipped 0.1 percent to 98.166 against a basket of major currencies, it fell more than 2 percent in a month and is on track to end the year with a weaker tone. Against the euro, it fell just under 0.2 percent to $1.0938 and against the yen, it was marginally weaker on the day at 120.445 yen.
EUR/USD: The euro has slightly recovered after making a low of 1.08990. It was trading around 1.09234, major resistance is around 1.1000 and any break above 1.100 will take the pair to 1.1060/1.1090 level. On the downside minor support is around 1.0880 and break below targets 1.0840/1.0800.
USD/JPY: The yen inched up to 120.425 yen per dollar. That left it close to a 2-month high of 120.05 yen hit last week. Short term trend is still weak as long as resistance 121.50 holds. On the higher side it is facing resistance around 120.70 and any break above targets 121/121.50. The pair's major support is at 120 and break below targets 119.25/118.60.
GBP/USD: The Cable has broken 1.4800 level and declined till 1.47850 and was trading around 1.48175. The pair is facing minor resistance around 1.4850 and break above targets 1.4880/1.4920/1.4950. On the lower side major support is around 1.4780 and break below targets 1.4720/1.4650 level. Overall bullish invalidation is only above 1.5100.
USD/CHF: The pair is trading in a narrow range around 0.9950-0.9850. The resistance is at 0.9950 and break above targets 1/1.0030 level. On the lower side support is at 0.9850 and break below will drag the pair down till 0.9820/0.9780 is possible. Overall bullish invalidation is only below 0.9780.
AUD/USD: The Australian dollar was down about 0.1 percent, also suffering from another 2 percent fall in crude oil prices. It has broken minor resistance 0.7285 and jumped till 0.73030. The resistance is around 0.7335 (Dec 9th high) and any break above 0.7335 will take the pair till 0.7380. On the lower side minor support is around 0.7240 and any break below will target 0.7200/0.7170. Short term weakness is only below 0.7150. The Aussie has bounced around three cents this quarter, but was still down 11 percent for the year.
NZD/USD: The New Zealand dollar stood tall buoyed by rallies in commodities and equities, on track for hefty quarterly gains. It was trading at $0.6865, having climbed to a 10-week peak of $0.6881 overnight. Resistance was found at $0.69. It was on track for a 7 percent gain this quarter.
Equities Recap
The plunge in oil prices towards 11-year lows drove the global shares lower, sapping investors' appetite for risky assets and hurting the shares of mining and energy companies.
The pan-European FTSEurofirst 300 index dropped 0.5 percent, while the Euro STOXX 50 index fell 0.6 percent, having both gained in the previous session. France's CAC inched lower 0.2 pct, UK's FTSE and Germany's DAX both dipped 0.1 pct in early deals.
Japan's Nikkei closed up 0.3 pct. MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.1 pct, on track for a flat monthly performance and down 12 percent for the year.
China's blue-chip CSI300 index plunged 0.2 pct, while the Shanghai Composite Index remained steady, ahead of December manufacturing activity surveys which are expected to show the economy remains sluggish.
Commodities Recap
Brent slipped back to 11-year lows as signals of slowing global energy demand rose against record high inventories. Front-month WTI futures were down 95 cents, trading at $36.92 per barrel. Brent dipped 80 cents at $36.99 a barrel, a decline of roughly 2 pct.
Gold slipped on Wednesday, as the combination of a strong dollar and weak oil prices left the metal on track for its third consecutive annual loss. Spot gold was down 0.2 percent at $1,067.01 an ounce by 1044 GMT. Trading volumes were muted in the holiday-shortened week.
Treasuries Recap
Yield on U.S. 10-year Treasury notes stood at 2.292 pct compared to U.S. close of 2.307 pct on previous day.
10-year German Bund yields were flat at 0.63 percent and up nearly 10 basis points on the year.
UK Gilts started 16 touches lower than the settlement of 117.18, as expected, as the core markets reacted to a strong hand over from Wall Street.
New Zealand government bonds were mixed, with the yields dropping by 0.5 bps at the short end and rising 1.5 bps at the long end. Australian government bond futures reversed from 2-month highs, with the 3-year bond contract declining 3 ticks at 97.980. The 10-year contract shed 5.5 ticks to 97.1900. The 20-year contract remained flat at 96.6900.
