Market Roundup
•German CPI (MoM) (Nov) -0.2%, -0.2% forecast, 0.4% previous
•German HICP (MoM) (Nov) -0.7%, -0.7% forecast, 0.4% previous
•German HICP (YoY) (Nov) 2.4%, 2.4% forecast, 2.4% previous
•Italian Industrial Production (MoM) (Oct) 0.0%, -0.1% forecast, -0.3% previous
Looking Ahead Economic Data (GMT)
•12:30 US Nonfarm Productivity (QoQ) (Q3) 2.2% forecast, 2.5% previous
•12:30 US Unit Labor Costs (QoQ) (Q3) 1.9% forecast, 0.4% previous
•13:55 US Redbook (YoY) 7.4% previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro slipped against the dollar on Tuesday as investors adopted a cautious stance 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 implement another rate cut as inflation continues to ease, with markets closely monitoring for signs that a slowing economy might lead to more aggressive actions in the future. Traders are pricing in a 25 basis point rate cut, which would be the fourth reduction this year, reinforcing expectations of consecutive cuts. The euro dropped 0.26% to $1.0526. 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. That U.S. price data is the most important piece of global economic data this week. It is the last scheduled event that could possibly disrupt market expectations that the Federal Reserve will cut rates at its meeting next week.Core inflation is expected to hold at 3.3% for November, and an in-line reading should be no impediment to an easing. 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. While the RBA kept interest rates unchanged, as widely anticipated, it signaled that the board had gained "some confidence" that inflation was moving back toward its target. However, the statement omitted a previous comment 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 meeting, RBA Governor Michele Bullock left the door open to a potential rate cut as early as February, adding further uncertainty to market expectations.. Immediate resistance can be seen at 0.6444(Daily high), an upside break can trigger rise towards 0.6483(38.2%fib).On the downside, immediate support is seen at 0.6380(23.6%fib), a break below could take the pair towards 0.6373 (Lower BB).
USD/JPY: The dollar strengthened against the yen on Tuesday as investors focused on key U.S. inflation data later this week for further clues on the Federal Reserve's policy direction. The Consumer Price Index (CPI) due on Wednesday could provide insights into how much room policymakers have for potential easing next year. Money markets are pricing an 86% chance of a 25 bps rate cut by the U.S. FedThe U.S. dollar rose 0.2% to 151.55 yen, after earlier climbing to 151.71 yen for the first time since Nov. 28.eral Reserve next week, but some analysts warned that Fed hawks could have more weight in the upcoming decisions.Immediate resistance can be seen at 151.97 (38.2%fib) an upside break can trigger rise towards 153.62 (23.6%fib). On the downside, immediate support is seen at 150.94(50%fib) a break below could take the pair towards 149.82(61.8%fib).
Equities Recap
European shares drifted on Tuesday, failing to build on the previous day's gains driven by China stimulus hopes, which only generated limited traction in Asia, while the Australian dollar slid as the central bank hinted rate cuts were finally near.
At GMT 13:11,UK's benchmark FTSE 100 was last down by 0.49 percent, Germany's Dax was last up by 0.34 percent, France’s CAC was last down by 0.60 percent.
Commodities Recap
Gold prices surged to a two-week high on Tuesday, driven by escalating tensions in the Middle East and growing expectations of a U.S. rate cut this month. Investors are also focused on key U.S. inflation data later this week for further clues on the Federal Reserve's policy direction.
Spot gold climbed 0.7% to $2,678.21 per ounce, as of 1226 GMT. U.S. gold futures rose 0.6% to $2,700.80.
Oil prices fell on Tuesday as concerns about the consequences from the ouster of Syria's president lessened, despite backing from China's promise to ratchet up policy stimulus, which could boost demand from the world's largest oil customer.
.Brent crude futures fell 39 cents, or 0.5%, to $71.75 per barrel at 1233 GMT. U.S. West Texas Intermediate was down 40 cents, 0.6%, at $67.97. Both benchmarks had risen more than 1% on Monday.
