Market Roundup
- Bank of England Dec regional agents' survey shows firms intentions point to only small increases in investment over the coming twelve months
- Bank of England Dec regional agents' survey shows business activity growth edges up, but businesses remain cautious about prospects
- Swedish central bank - further purchases of government bonds for SEK 30 billion, repo rate unchanged at -0.50 per cent
- Swedish central bank - repo rate unchanged at -0.50 percent
- United Kingdom Nov PSNB, mm GBP increase to 12.210 bln GBP (forecast 11.300 bln GBP) vs previous 4.324 bln GBP (revised from 4.301 bln GBP)
- United Kingdom Nov PSNB Ex Banks GBP increase to 12.647 bln GBP (forecast 12.100 bln GBP) vs previous 4.761 bln GBP (revised from 4.796 bln GBP)
- United Kingdom Nov PSNCR, mm GBP increase to 13.525 bln GBP vs previous -3.413 bln GBP
- Italy Nov wage inflation yy decrease to 0.5 % vs previous 0.6 %
- Italy Nov wage inflation mm stays flat at 0.1 % vs previous 0.10 %
- France Nov producer prices mm stays flat at 0.8 % vs previous 0.8 %
- Greek October tourism receipts rise to 1.026 bln euro from 0.899 bln euro in same month last year- Central Bank
- Greek October current account balance -0.198 bln euro from +0.265 bln euro in same month last year- Central Bank
- UK Royal Institution of Chartered Surveyors says expects UK house prices will rise on average by 3 pct in 2017
- UK short-run public inflation expectations broadly steady at 2.4 percent-Citi/YouGov
- UK long-run public inflation expectations rise to 3.0 percent in December from 2.8 percent in Nov-Citi/YouGov
- Fitch revises Indonesia's outlook to positive; affirms at 'BBB-'
Economic Data Ahead
- (0900 ET/1400 GMT) Swiss National Bank releases its Quarterly Bulletin.
- (1000 ET/1500 GMT) National Association of Realtors is likely to report that U.S. existing home sales declined 1.0 percent to an annual rate of 5.5 million units in November.
- (1000 ET/1500 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of December. The index is expected to slump 6.0 percent after posting a drop of 6.1 in the prior month.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending December 16.
- (1645 ET/2145 GMT) The Statistics New Zealand releases current account data for the third quarter. The economy's deficit is likely to have expanded to $5.015 billion from $0.945 in the previous quarter.
Key Events Ahead
- No Significant Event Scheduled
FX Beat
DXY: The dollar held gains versus its major peers, supported by hawkish Fed forecast and prospects of faster U.S. economic growth under President-elect Donald Trump's administration. The greenback against a basket of currencies traded 0.06 percent down at 103.19, within the sight of a 14-year high of 103.65 hit on Wednesday. FxWirePro's Hourly Dollar Strength Index stood at 36.01 (Neutral) by 1000 GMT
EUR/USD: The euro rose, regaining most of its previous session losses, as the greenback extended its corrective slide. The major tumbled to a 14-year low of 1.0352 in the previous session, as the dollar rallied across the board on the back of growing expectations of multiple United States interest rate hikes in 2017. The European currency trades 0.15 percent higher at 1.0401, attempting to extend gains above the 1.0400 handle. FxWirePro's Hourly Euro Strength Index stood at -25.18 (Neutral) by 0900 GMT. Any break above 1.04350 will take the pair till 1.0492 (7- day MA)/ 1.0536 (10- day MA). The short term bullishness is only above 1.06700 level. On the lower side, support is located at 1.03400 (127.2% retracement of 1.03665 and 1.04720) and any violation below will drag it till 1.02835 (161.8% retracement of 1.05047 and 1.08700).
USD/JPY: The dollar eased against the Japanese yen, as board based greenback retracement confined the major below 118.00 handle. However, the downside appears limited as markets expect President-elect Donald Trump's administration will boost US growth and inflation, which would convince the Federal Reserve to go for tighter monetary policy stance. The major trades 0.2 percent lower at 117.54, pulling away from a high of 118.66 hit last week, its strongest since early Feb. FxWirePro's Hourly Yen Strength Index stood at 110.30 (Highly Bullish) by 0900 GMT. The major resistance is around 119 and break above targets 120. On the lower side minor support is around 116.88 (7-day MA) and any break below targets 116.10 (10- day MA)/115.
GBP/USD: Sterling declined, extending losses for the third consecutive session after data showed Britain's public net borrowing expanded more-than-expected in the month of November. The major failed to benefit from the Citi/YouGov's survey, which showed Britons expected the UK public long-term inflation to reach 3 percent in December, up from a November reading of 2.8 percent, while in the shorter term inflation would rise to 2.43 percent from an earlier forecast of 2.36 percent. Sterling trades 0.3 percent down at 1.2332, having hit a low of 1.2312 in the previous session, its lowest since Nov. 21. FxWirePro's Hourly Sterling Strength Index stood at -132.78 (Highly Bearish) by 0900 GMT. The major support is around 1.2300 and any break below will drag the pair till 1.2240 (61.8% retracement of 1.19048 and 1.27747). On the higher side, 1.2430 will be acting as major resistance and any break above will take it till 1.2500 /1.2535 (21- day MA)/1.2568 (55- day EMA). Against the euro, the pound was trading 0.5 percent lower at 84.32 pence, drifting towards a 10-day low of 84.49 pence hit on Monday.
USD/CHF: The Swiss franc gained, after declining in the previous two sessions, as prevalent risk-off sentiment surrounding global equity markets extended some support to the Swiss currency’s safe-haven appeal. The major trades 0.1 percent lower at 1.0273, hovering towards a low of 1.0221 hit on Monday. FxWirePro's Hourly Swiss Franc Strength Index stood at 77.86 (Bullish) by 0900 GMT. On the lower side, any break below 1.02800 will drag the pair down till 1.0220/1.01828 (61.8% retracement of 1.00834 and 1.03435)/1.0150. The temporary top formed at 1.03435 will be acting as major resistance and any break above will take it till 1.0400 level.
AUD/USD: The Australian dollar fell towards a 6-month low struck on Tuesday, as prevalent risk-off market sentiment weighed on the major amid broad based greenback retracement. Moreover, hawkish Fed projections and prospects of faster U.S. economic growth, under president-elect Donald Trump's administration, continues to undermine the pair. The Aussie trades 0.13 percent lower at 0.7249, having hit a low of 0.7222 in the previous session, its lowest since Jun. 3. FxWirePro's Hourly Aussie Strength Index stood at -45.63 (Neutral) by 1000 GMT. On the higher side, minor resistance is around 0.7315 and any break above will take the pair till 0.7380/0.7435/0.7500. The major support is around 0.7200 and break below will drag it till 0.7145/0.70690.
NZD/USD: The New Zealand dollar declined, extending losses for the sixth consecutive session, dragged down by disappointing domestic trade balance data and Global Dairy Trade price index. The major initially rose to an intra-day high of 0.6947 as the greenback weakened on profit taking, however, persistent risk-off market profile renewed the selling pressure around the Kiwi. The Kiwi trades lower at 0.6913, after declining to a low of 0.6882 the prior day, it’s lowest since early June. FxWirePro's Hourly Kiwi Strength Index was at -76.92 (Bearish) by 1000 GMT. Immediate resistance is located at 0.6951 (5-DMA), a break above could take it near 0.6987 (7-EMA). On the downside, support is seen at 0.6900, a break below could drag it till 0.6882 (Previous Session Low).
Equities Recap
European shares declined as concerns over Italy's Monte dei Paschi di Siena weighed on market sentiment, however, stayed near to more than 11 months highs, supported by merger and acquisition activity.
The pan-European STOXX 600 index decreased 0.04 percent at 361.18 points, while the FTSEurofirst 300 index shed 0.05 percent at 1,428.98 points.
Britain's FTSE 100 trades 0.07 percent up at 7,049.52 points, while mid-cap FTSE 250 advanced 0.15 percent at 17,796.37 points.
Germany's DAX edged up 0.07 percent at 11,472.80 points; France's CAC 40 trades flat at 4,849.62 points.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent.
Tokyo's Nikkei fell 0.26 percent to 19,444.49 points, Australia's S&P/ASX 200 index rose 0.47 percent to 5,617.30 points and South Korea's KOSPI shed 0.19 percent at 2,037.96 points.
Shanghai composite index gained 1.1 percent at 3,137.43 points, while CSI300 index rose 0.9 percent to 3,338.54 points. Hong Kong’s Hang Seng climbed 0.4 percent at 21,809.80 points.
Commodities Recap
Crude oil prices rose, extending gains for the second straight session, as expectations of a U.S. crude inventory draw boosted market sentiment. International benchmark Brent crude was trading 0.6 percent higher at $55.81 per barrel by 0849 GMT, hovering towards a 1-week high of $55.89 hit on Tuesday. U.S. West Texas Intermediate crude rose 0.5 percent at $53.71 a barrel, having hit more than a 1-week high of $53.76 earlier in the session.
Gold edged up, reversing some of its previous session losses, as the U.S. dollar eased from 14-year highs hit the prior day. Spot gold was up 0.1 percent at $1,133.00 an ounce by 0855 GMT, having shed 0.6 percent in the previous session. U.S. gold futures were 0.4 percent higher at $1,138.10 per ounce.
Treasuries Recap
The U.S. Treasuries traded modestly firmer ahead of existing home sales data, durable goods orders and final Q3 GDP releases on Thursday in advance of the long Christmas holiday weekend. The yield on the benchmark 10-year Treasury note fell 1-1/2 basis points to 2.55 percent, the yield on long-term 30-year Treasury dipped 2 basis points to 3.13 percent and the yield on short-term 2-year note slid 1/2 basis point to 1.22 percent.
The UK gilts were drifting between small gains and losses in quiet Wednesday trading session ahead of long global Christmas holidays. The yield on the benchmark 10-year gilts fell 2 basis points to 1.39 percent, the super-long 40-year bond yield dipped 1-1/2 basis points to 1.86 percent and the yield on short-term 2-year bounced 1 basis point to 0.087 percent.
The German bunds rebounded after the European Central Bank’s (ECB) governing council member Latvia's Ilmars said that the central bank’s Quantitative Easing (QE) has failed to push growth in the Eurozone area. The yield on the benchmark 10-year bond fell more than 2 basis points to 0.24 percent, the long-term 30-year bond yield dipped 3 basis points to 0.964 percent and the yield on short-term 2-year bond slid 1/2 basis point to -0.78 percent.
The Japanese government bonds traded nearly flat as investors remain sidelined in any big deal ahead of the Christmas and New Year holidays. The benchmark 10-year bond yield hovered around 0.06 percent, the long-term 30-year bond yield also dipped 1/2 basis point to 0.66 percent and the yield on short-term 2-year note remained steady at -0.18 percent.
The New Zealand government bonds closed lower as markets awaited the delayed third-quarter gross domestic product (GDP), which was postponed because of powerful earthquakes last month. The yield on the benchmark 10-year bond closed 1 basis point higher at 3.46 percent, the yield on 7-year note ended up 2 basis points to 3.04 percent and the yield on short-term 2-year note rose 2-1/2 basis points at 2.32 percent.
The Australian government bonds were drifting between small gains and losses in quiet Wednesday trading session ahead of long global Christmas holidays. The yield on the benchmark 10-year Treasury note fell 2-1/2 basis points to 2.85 percent, the yield on 15-year note dipped 2 basis points to 3.32 percent, while the yield on short-term 2-year bonds bounced 2 basis points to 1.97 percent.
