Market Roundup
- USD/JPY 0.0%, GBP/USD 0.0%, EUR/USD +0.05%
- DXY -0.06%, DAX -0.3%, Bent -1.06%, Iron -4.8%, Gold +0.3%
- Switzerland Nov Producer Prices -0.6% y/y vs -0.2%
- UK Oct ILO Jobless rate 4.8% vs 4.8% previous, 48% expected
- UK Oct Average Earnings -2.5% 3m y/y vs revised 2.4% previous, 2.3% expected
- Switzerland Dec ZEW Investor Sentiment 12.9 vs 8.9 previous
- EZ Oct Industrial Production 0.6% y/y vs revised 1.3% previous, 0.8% expected
- Toyota on track to sell over 10 mln cars for the fourth year – Nikkei
- China PBOC advisor Fan Gang – No cause for CNY to slide – CSJ
- BoJ official – BoJ bought more JGBs in wake of sharp yield rises
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that retail sales rose 0.3 percent in November, after increasing 0.8 percent in October. While excluding autos, retail sales are likely to have gained 0.4 percent, after surging 0.8 percent in October.
- (0830 ET/1330 GMT) The U.S. producer price index is likely to have edged up 0.1 percent in November after staying flat in October, while in the 12 months through November, it is expected to have advanced 0.9 percent. PPI excluding food and energy probably rose 0.2 percent after declining 0.2 percent in the prior month.
- (0915 ET/1415 GMT) The Federal Reserve is likely to report that industrial production fell 0.2 percent in November after staying flat in the previous month.
- (0915 ET/1415 GMT) The Federal Reserve Board is expected to report that capacity utilization edged down to 75.1 percent in November from 75.3 percent in October
- (1000 ET/1500 GMT) The U.S. Commerce Department is expected to report that business inventories slipped 0.1 percent in October, after rising 0.1 percent in September.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending December 9.
- (1630 ET/2130 GMT) New Zealand will release its Business PMI index for the month of December. The index stood at 55.2 in the previous month.
- (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending December 9.
- (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending December 9.
Key Events Ahead
- (0715 ET/1215 GMT) Bank of England Governor Mark Carney's speech.
- (1400 ET/1900 GMT) The Federal Open Market Committee concludes its two-day meeting on interest rate policy and releases its statement.
- (1430 ET/1930 GMT) The Federal Reserve Chair Janet Yellen holds a press conference following Federal Open Market Committee meeting.
FX Beat
DXY: The dollar eased across the board on profit taking, while investors nervously await the U.S. Federal Reserve policy announcement, where it expect to hike interest rate and signal acceleration in the pace of future rate hikes. The greenback against a basket of currencies traded 0.1 percent down at 100.95, having hit a 6-day low of 100.75 earlier in the session. FxWirePro's Hourly Dollar Strength Index stood at -177.25 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro edged up, regaining most of its previous session losses, as the U.S. dollar retreated across the board amid a fresh bout of profit-taking. Investors seem to have ignored downbeat Eurozone's industrial production data, which came in at -0.1 percent in the month of October, against estimates of 0.2 percent rise, while on an annualized basis it rose 0.6 percent, but missing projections of 0.8 and previous 1.3 percent. The European currency trades 0.1 percent up at 1.0634, having touched an intra-day high of 1.0664. FxWirePro's Hourly Euro Strength Index stood at 12.59 (Neutral) by 1000 GMT. Immediate resistance is around 1.06855 and any break above will take the pair till 1.07580/1.0800. On the lower side, major intraday support is around 1.05800 and an indicative break below 1.0580 will drag it down till 1.0550/1.0500 level.
USD/JPY: The dollar consolidated within a thin range, as investors refrained from placing big bets ahead of highly influential FOMC policy decision. The Fed is widely expected to raise its interest rate target range by 25 bps points, hHowever, investors will look for fresh insights over the central bank's monetary policy outlook for 2017. The major trades flat at 115.19, hovering just below a 10-month high of 116.12 hit on Monday. FxWirePro's Hourly Yen Strength Index stood at -124.09 (Highly Bearish) by 1000 GMT. The major resistance is around 116.15 and break above targets 118/120. On the lower side minor support is around 114.25 (10- day MA) and any break below targets 112.65/112.
GBP/USD: Sterling edged down after data showed Britain’s labor market slowing after the Brexit vote. The number of people in work fell by 6,000 in the three months to October, its first decline since the second quarter of last year. However, the unemployment rate remained unchanged at 4.8 percent, in line with estimates, while earnings including bonuses rose by an annual 2.5 percent. Sterling was trading lower at 1.2651, after rising to an intra-day high of 1.2684. FxWirePro's Hourly Sterling Strength Index stood at 47.83 (Neutral) by 1000 GMT. The upside remains capped by trend line resistance 1.2720 and any violation above will take the pair to next level till 1.2775 (Dec 6 High). Any break above the temporary top will take the cable till 1.2830/1.2900 in the short term. On the lower side, 1.2630 (10- day MA) will be acting as minor support and any break below will drag it down till 1.2590 (55- day EMA)/ 1.2540. Against the euro, the pound trades 0.1 percent lower at 84.04 pence, hovering away from a 1-week high of 83.42 pence hit the day before.
USD/CHF: The Swiss franc advanced, extending gains for the third consecutive session after ZEW Survey showed Switzerland's investor expectations rose 12.9 percent in December from 8.9 in the previous month. The major trades 0.1 percent down at 1.0105, having hit a 6-day low of 1.0099 earlier in the session. FxWirePro's Hourly Swiss Franc Strength Index stood at -20.80 (Neutral) by 1000 GMT. On the lower side, 21- day MA is acting as major support and any close below 1.0100 will drag the pair till 1.0055 (23.6% retracement of 0.9549 and 1.02135)/1.00180 (Dec 8 Low). The downside is expected to be limited to 1.0020. The minor immediate resistance is around 1.0150 and any violation above will take it to next level till 1.02150. The pair should close above 1.02135 for further jump till 1.03027.
AUD/USD: The Australian dollar inched higher, but traded within a narrow band as investors remained on sidelines ahead of the Federal Reserve monetary policy announcement. Moreover, weak domestic data and prevalent risk-off sentiment around equity markets capped the upside in the major. The Aussie trades 0.1 percent up at 0.7506, hovering closer to a high of 0.7523 hit the prior day, it’s highest since Nov. 16. FxWirePro's Hourly Aussie Strength Index stood at 89.18 (Slightly Bullish) by 1000 GMT. On the higher side, major resistance is around 0.7530 (200- day MA) and any break above will take the pair till 0.7580/0.7635. The major support is around 0.7380 and break below will drag it till 0.73500/ 0.7300.
NZD/USD: The New Zealand dollar extended gains above the 0.7200 handle, however, failed to take out previous session’s multi-week highs as investors remained cautious ahead of the Fed's interest-rate decision due later in the day. The Kiwi trades 0.3 percent up at 0.7226, drifting towards a high of 0.7232 hit in the previous session, its highest since Nov 10. FxWirePro's Hourly Kiwi Strength Index was at 124.34 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 0.7250, a break above could take it over 0.7289/ 0.7310. On the downside, support is seen at 0.7177 (7-EMA), a break below could drag it till 0.7146.
Equities Recap
European shares declined, retreating from an 11-month high as investors remained cautious ahead of the Federal Reserve’s monetary policy decision.
The pan-European STOXX 600 index decreased 0.2 percent at 356.79 points, while the FTSEurofirst 300 index added 0.17 percent at 1,410.89 points.
Britain's FTSE 100 trades 0.21 percent down at 6,953.64 points, while mid-cap FTSE 250 tumbled 0.4 percent at 17,647.40 points.
Germany's DAX declined 0.20 percent at 11,262.86 points; France's CAC 40 trades 0.40 percent lower at 4,784.58 points.
Tokyo's Nikkei rallied 0.02 percent to 19,253.61 points, Australia's S&P/ASX 200 index gained 0.77 percent to 5,587.70 points and South Korea's KOSPI rose 0.04 percent at 2,036.87 points.
Shanghai composite index fell 0.5 percent at 3,140.53 points, while CSI300 index slumped 0.8 percent at 3,378.95 points. Hong Kong’s Hang Seng ended flat at 22,456.62 points.
Commodities Recap
Crude oil prices declined, extending previous session losses as a rise in U.S. crude inventories and a projection that OPEC may have produced more crude in November than previously expected, undermined the planned output cut. Global benchmark Brent crude was 0.36 percent lower at $55.06 per barrel by 0934 GMT, putting further distance between a 17-month high of $57.50 hit on Monday. U.S. West Texas Intermediate crude dropped 0.3 percent at $52.30 a barrel, after rising as high as $54.48 earlier in the week, its highest since July 2015.
Gold prices nudged higher, but still within the sight of a 10-month low hit on Monday as the dollar eased ahead of the outcome of the U.S. Federal Reserve's policy meeting later in the day. Spot gold was up 0.3 percent at $1,161.04 an ounce by 0939 GMT, having touched a low of $1,151.24 an ounce on Monday, its lowest since Feb. 5. U.S. gold futures were 0.4-percent higher at $1,163.70.
Treasuries Recap
The U.S. Treasuries were pushed higher as investors remained cautious ahead of the Federal Reserve’s last monetary policy decision for 2016. The yield on the benchmark 10-year Treasury note fell nearly 4 basis points to 2.44 percent, the yield on long-term 30-year Treasury also dipped 4-1/2 basis points to 3.10 percent and the yield on short-term 3-year note slid 1 basis point to 1.45 percent.
The UK gilts strengthened as investors sought refuge in safe-haven assets amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year gilts fell 4 basis points to 1.40 percent, the super-long 40-year bond yield also dipped 4 basis points to 1.86 percent and the yield on short-term 3-year slid 2 basis points to 0.12 percent.
The German bunds gained as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year bond fell 2 basis points to 0.33 percent, the long-term 30-year bond yield dipped 5 basis points to 1.09 percent and the yield on short-term 3-year bond slid 1 basis point to -0.75 percent.
The Japanese government bonds strengthened after the Bank of Japan (BoJ) in its daily bond buying operations purchased more of super-long bonds to keep yields curve towards the central bank’s target range. Also, investors poured into safe-having assets after energy oil prices fell following a rise in U.S. crude inventories. The benchmark 10-year bond yield fell 3 basis points to 0.05 percent, the long-term 30-year bond yield dipped 5 basis points to 0.75 percent and the yield on short-term 2-year note slid 1-1/2 basis points to -0.19 percent.
The New Zealand government bonds closed higher after energy oil prices fell following a rise in U.S. crude inventories. The yield on the benchmark 10-year bond closed 1-1/2 basis points lower at 3.29 percent, the yield on 7-year note ended down 2 basis points to 2.85 percent and the yield on short-term 2-year note slid 2 basis points to 2.18 percent.
The Australian government bonds rallied as crude oil prices fell more than a percent after U.S. stockpiles rose. Also, investors poured into safe-haven instruments on expectations that the country might lose its AAA sovereign credit rating by the end of December 2016. The yield on the benchmark 10-year Treasury note fell 2 basis points to 2.81 percent, the yield on 15-year note dipped 4 basis points to 3.25 percent and the yield on short-term 2-year slid 2 basis points to 1.85 percent.
