Market Roundup
- Global stocks extend rally, oil edges off 11-year low, USD higher against major rivals on US data.
- US Nov personal income rises 0.3 percent, US personal income rises in boost to consumer spending.
- U.S. new home sales rise in November; momentum slows (+0.49m v 0.505m forecast).
- University of Mich consumer sentiment index at highest since July (92.6 v 92.0 forecast).
- Canada retail sales up less than expected in Oct (0.1% vs 0.4% forecast).
- US crude stockpiles fall unexpectedly sending crude prices up – EIA.
- Brazil central bank raises 2016 inflation view, rate hike possible.
- Spain’s socialists reject pact with ruling People’s Party.
Looking Ahead – Economic Data (GMT)
- No Significant Data
Looking Ahead – Events, Other Releases (GMT)
- 23:50 Japan – BoJ will publish the minutes of its November policy meeting
- 04:00 Japan – BoJ Governor Haruhiko Kuroda speaks at the Keidanren business lobby in Tokyo
Currency SummariesEUR/USD is likely to find support at 1.0847 levels and currently trading at 1.0905 levels. The pair has made session high at 1.0920 and hit lows at 1.0867 levels. The dollar inched higher against euro on Wednesday, supported by higher U.S. bond yields as data suggested a modest pace of economic expansion into year-end, albeit perhaps not enough for the Federal Reserve to quicken its pace on future rate increases. The latest snapshot on the consumer sector, which accounts for two-thirds of the U.S. economy, offset disappointing data on durable goods orders and new home sales. The dollar index, which tracks the greenback against a basket of six currencies, was fractionally higher at 98.292. It held above its 50-day moving average, signaling its bullish trend remained intact. Meanwhile, the euro slipped 0.35 percent to $1.0915. To the upside, immediate resistance can be seen at 1.0925. To the downside, major support level is located at 1.0885 levels.GBP/USD is supported in the range of 1.4860 levels and currently trading at 1.4893 levels. It reached session high at 1.4924 and hit low at 1.4884 levels. The British pound slipped lower against dollar on Wednesday after Britain’s economic showed signs of slowed down cooling down expectation Bank of England will raise interest rate any time soon. The gross domestic product grew 0.4 percent in the third quarter, matching its lowest rate since late 2012 when Britain was still struggling to recover from the financial crisis. Meanwhile the current account deficit, considered one of the weak points of British economic recovery, was almost stable in the July- September period at 3.7 percent of gross domestic product, despite economists forecast that it would widen. Until a couple of months ago , the Central Bank of England was expected to follow Federal Reserve in raising the interest rate, which last week increased borrow cost for the first time in nearly a decade . The currency’s strongest level of the session was $1.4900, while its weakest level was $1.4853. To the upside, immediate resistance can be seen at 1.4900. To the downside, major support level is located at 1.842levels.USD/CAD is supported at 1.3822 levels and is trading at 1.3855 levels. It has made session high at 1.3870 and lows at 1.3828 levels. The Canadian dollar strengthened against the greenback on Wednesday as a rebound in oil prices shrugged of weak Canadian domestic data. Despite the day’s gain, the loonie is still on track for its worst year since the 2008 financial crisis. After this year’s plunge in oil prices, two interest rate cuts from the Bank of Canada and the start of higher interest rates in the United States, the currency is down about 20 percent. A surprise drop in U.S. crude inventories boosted the price of oil $1.36 to $37.50 a barrel. The Canadian dollar has been closely correlated to the price of oil, which is a major export for Canada. That helped the loonie shrug off a disappointing set of domestic data that showed the economy stalled in October, while retail sales rose less than expected. The currency touched a session low against the greenback immediately following the reports before regaining strength. To the upside, immediate resistance can be seen at 1.3872. To the downside, major support level is located at 1.3824 levels.NZD/USD is supported at 0.6761 levels and is trading at 0.6790 levels. It has made session high at 0.6803 and lows at 0.6771 levels. The New Zealand’s dollar inched higher against US dollar on Wednesday as investors sought their relatively higher yields, with market liquidity further drained by a Tokyo holiday in already thin trading. The New Zealand dollar was a clear outperformer at 0.6803, hovering close to a tow month peak of $ 0.6836 touched on Tuesday.it has been on the rise ever since the Reserve Bank of New Zealand Indicated it was unlikely to cut rates further from 2.5 percent easily the highest among developed nations. Meanwhile, New Zealand’s government bonds eased sending yields 2.5 points higher across the curve. To the upside, immediate resistance can be seen at 0.6800. To the downside, major support level is located at 0.6774 levelsEquities RecapEuropean shares rose on Wednesday, lifted by gains in the hard hit mining sector which rallied on the back of stronger copper prices.UK’s benchmark FTSE 100 closed up by 2.6 percent, the pan-European FTSEurofirst 300 ended the day up by 2. 8 percent, Germany’s Dax ended up by 2.3 percent, France’s CAC finished the day up by 2.4 percent.Wall street rallied for the third consecutive session on Wednesday, propelled by sharp gains in energy stocks as a bound in oil prices boosted sentiment heading into the Christmas holiday.Dow Jones closed up by 1.05 percent, S&P 500 ended up by 1.24 percent, Nasdaq finished the day up by 0.89 percent.Treasuries RecapU.S. Treasury yields rose on Wednesday, with 30-year yields hitting one-week highs after solid U.S. economic data supported views of a swift pace of Federal Reserve rate increases next year and gains in oil prices suggested higher inflation.Benchmark 10-year U.S. Treasury notes were last down 6/32 in price to yield 2.264 percent, from a yield of 2.239 percent late Tuesday and not far from a nearly one-week high of 2.280 percent hit earlier in the session after the U.S. data.U.S. five-year notes were down 2/32 in price to yield 1.723 percent, from a yield of 1.706 percent late Tuesday and hovering near a nearly one-week high of 1.734 percent.U.S. two-year notes were mostly flat in price to yield 0.989 percent, from a yield of 0.977 percent late Tuesday.Commodities RecapGold inched down for the second straight session on Wednesday, hemmed into a narrow range in thin pre-holiday trade as major stock markets posted strong gains and the dollar climbed along with U.S. bond yields.Spot gold was up 1.3 percent at $1,065.30 an ounce at 2:10 p.m. EST (1910 GMT), while U.S. gold futures for February delivery settled up 1.5 percent at $1,065 an ounce.Oil rose more than 3 percent on Wednesday in thin, pre-holiday trading, buoyed by a surprise drop in U.S. crude inventories, but prices stayed near multi-year lows as global supplies remained abundant and OPEC lowered the demand outlook for its exports.West Texas Intermediate futures settled up $1.36 or 3.8 percent at $37.50 a barrel, while Brent crude futures were up $1.25 at $37.36 a barrel.
The material has been provided by InstaForex Company – www.instaforex.com