Market Roundup
- Swiss sight deposits of domestic banks at 463.63 bln Sfr in week ending December 23 versus 457.309 bln Sfr a week earlier
- Swiss total sight deposits at 528.351 bln Sfr in week ending December 23 versus 527.893 bln sfr a week earlier
- Russia, Turkey foreign ministers discuss Syria on phone – Ria
- China Nov services trade deficit $25.4 bln - Fx regulator
- China Jan-Nov services trade deficit $234.0 bln - Fx regulator
- Finnish Dec industry confidence 1 pts –EK
- Finnish Dec consumer confidence +19.5 pts - Statistics Finland
- Turkish deputy PM Simsek: working on forex borrowing limitations for companies
- Japan Nov construction orders yy decrease to -6 % vs prev 15.2 %
- Japan Nov housing starts yy* decrease to 6.7 % (fcast 10.2 %) vs prev 13.1 % (revised from 13.7 %)
- BOJ's consumer price index stripping away effect of energy, fresh food costs rises 0.2 pct yr/yr in Nov
- China statistics bureau says relatively rapid industrial profit growth due to low base last year, price rebound in raw materials
Economic Data Ahead
- (0855 ET/1355 GMT) US Redbook Index Y/Y, M/M (Dec 23)
- (0900 ET/1400 GMT) Standard & Poor's releases the S&P/Case-Shiller Home Price Indices Y/Y for the month of October.
- (1000 ET/1500 GMT) The conference board releases the US consumer confidence index for the month of December, which captures the level of confidence that individuals have in economic activity. The index stood at 107.1 in November.
- (1000 ET/1500 GMT) The Federal Reserve Bank of Richmond is set to release manufacturing index for December. The index stood at 4 in the previous month.
- (1000 ET/1530 GMT) The Federal Reserve Bank of Dallas is set to report the performance of manufacturing business index for December. The index stood at 10.2 in the previous month.
- (1130 ET/1630 GMT) The U.S. Department of Treasury auctions 4-week, 3-month, 6-month bills and 2-year notes.
FX Beat
DXY: DXY hovers around 103 levels. The index has taken support near 10-day EMA. Resistance seen around 103.60 and any break above targets 105. On the lower side, any break below 102.65 (10- day MA) will drag the index down till 101.78 (21- day MA)/100.60. Short term bullish invalidation only below 98.
EUR/USD: EUR/USD is trading in narrow range between 1.03522 and1.04992 for the past five trading session. The pair closed at 1.04514 on Monday and is currently trading around 1.04525. Upside is capped by daily Tenken-Sen and any break above that level will take the pair to next level till 1.0560 (21 day MA)/1.0613 (daily Kijun-Sen)/1.0670. Short term bullishness only above 1.06700 level. On the lower side EUR/USD is facing strong support at 1.03400 (127.2% retracement of 1.03665 and 1.04720) and any violation below will drag the pair till 1.02835 (161.8% retracement of 1.05047 and 1.08700).
USD/JPY: Downbeat Japanese CPI data released earlier on the day continues to exert bearish pressure on the yen. USD/JPY posted a session high just below 117.50, but lost upside momentum and has managed to hold above 117.00 handle. The pair is facing strong support at 10- day EMA and slight weakness can be seen only below that level. It is currently trading around 117.32. The pair’s major resistance is around 119 and break above targets 120. On the lower side minor support is around 116.85 (10-day MA) and any break below targets 116.54 (Dec 19th 2016 low)/115.45 (21- day MA).
EUR/JPY: EUR/JPY trades a narrow range on the day as market lacks momentum amid a lack of fundamental drivers and holiday-thinned trades. The pair has broken major channel base support on Friday's trade, but has held above 20-DMA support at 122.21. Strength in RSI seen at 61 levels with scope to run further. But Stochs and MACD are biased lower. A break below 20-DMA could see some downside, test of 121 levels then likely. Short-term bearish reversal only below 200-DMA at 118.26.
NZD/USD: NZD/USD holds above strong trendline support. The pair currently struggles at 5-DMA, break above needed for further upside. Technically, the dollar could be a little stretched and in overbought territory. On the other side, the NZ economy is strong and dairy prices have risen, which could mean short-term support for the kiwi. Break above 5-DMA could see some upside. Trend is definitely lower, break below trendline support at 0.6855 could see drag till 0.68 levels.
Equities Recap
European and Asian share prices inched higher on Tuesday as markets resumed after a Christmas break. Germany's DAX and France's CAC 40 gained around 0.1 percent while Spain's IBEX fell by 0.1 percent. British markets were closed for a holiday, along with those in Australia, New Zealand and Hong Kong.
MSCI's broadest index of Asia-Pacific shares outside Japan was marginally higher while Japan's Nikkei closed little changed.
China's CSI 300 index was down 0.1 percent and the Shanghai Composite slipped almost 0.2 percent, despite the upbeat industrial data.
Commodities Recap
Oil steadied above $55 a barrel on Tuesday, drawing support from expectations of tighter supply once the first output cut deal between OPEC and non-OPEC producers in 15 years takes effect on Sunday.
Brent crude was unchanged at $55.16 a barrel at 1128 GMT. The global benchmark reached $57.89 on Dec. 12, the highest since July 2015. U.S. crude gained 15 cents to $53.17.
Treasuries Recap
U.S. Treasuries were pushed lower across much of the curve in quiet Tuesday session after long Christmas holidays. The yield on the benchmark 10-year Treasury note rose 2 basis points to 2.55 percent, the super-long 30-year bond yield also climbed 2 basis points to 3.13 percent and the yield on short-term 2-year note bounced nearly 1 basis point to 1.21 percent.
German bunds traded narrowly mixed in thin trading activity during a relatively quiet session that witnessed data of little significance. We foresee that the bund prices will keep drifting between small gains and losses in quiet trading due to a long global Christmas holidays. The yield on the benchmark 10-year bond fell ½ basis point to 0.22 percent, the long-term 30-year bond yield climbed 1/2 basis point to 0.92 percent and the yield on short-term 2-year bond slid 1/2 basis point to -0.79 percent.
Indian government bonds slumped ahead of the State and Central government’s bond auction worth INR319.47 billion scheduled this week. The yield on the benchmark 10-year bonds rose nearly 1 basis point to 6.56 percent, the long-term 30-year bond yields also climbed nearly 1 basis point to 7.10 percent and the yield on short-term 2-year note bounced 1 basis point to 6.39 percent.
Chinese sovereign bonds rallied as investors poured into safe-haven instruments amid rising concerns that the country may witness subdued GDP growth with the country unwilling to raise more debt to boost its economy. The yield on the benchmark 10-year bonds fell nearly 2 basis points to 3.19 percent, the long-term 30-year bond yield dipped 3 basis points to 3.76 percent and the yield on the short-term 2-year bonds slid 7 basis points to 2.99 percent.
Japanese government bonds traded nearly flat as investors remain sidelined in any big deal as many major global markets are closed for a holiday. The benchmark 10-year bond yields hovered around 0.05 percent, the long-term 30-year bond yields stood flat at 0.69 percent and the yield on short-term 2-year note remained steady at -0.17 percent.
