Market Roundup
- US business spending surges, durable goods orders +3%, mfg weak as USD soars.
- US jobless claims fall more than expected (-12k), continuing claims up.
- US new home sales rebound strongly in October.
- U Mich consumer sentiment index final Nov 91.3 vs preliminary 93.1, no surprise after consumer confidence miss.
- U.S. crude stocks rise, gasoline inventories exceed expectations.
- U.S. seen expanding 1.8 pct in Q4, down from 2.3% on Nov 18 -Atlanta Fed.
- UK’s Osborne: plans to cut UK budget to 36.5% of GDP by 2020, from 40%.
- SNB’s Jordan says no limit on balance sheet size, Franc remains significantly overvalued.
- Argentine president-elect to tap ex-central banker Alfonso Prat-Gay as finance minister.
- Brazil judge says senator may have interfered with Petrobras probe.
- Brazil assets sink as corruption arrests reignite political worries.
Looking Ahead – Economic Data (GMT)
- 21:45 New Zealand Trade – Imports* Oct forecast 5.01b, 4.91b-previous
- 21:45 New Zealand Trade Balance* Oct forecast -937.0m, -1222.0m- previous
- 21:45 New Zealand Trade Balance YY*Oct forecast -3.37b, -3.20b- previous
- 21:45 New Zealand Trade – Exports* Oct forecast -4.02b, 3.69b- previous
- 00:30 Australia Capital Expenditure* Q3 forecast -3%, -4.00%- previous
- 00:30 Australia Building Capex* Q3 forecast -5.5%, -5.60%- previous
- 00:30 Australia Plant/Machinery Capex*Q3 forecast -1%, -1.20%- previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.0550 levels and currently trading at 1.0610 levels. The pair has made session high at 1.0640 and hit lows at 1.0567 levels. The dollar rose against euro on Wednesday, hitting multi-month highs as the number of economic data released from US market continued to support views the Federal Reserve will raise interest rates in December. The single currency fell as low as $1.05785 in early morning trading, hitting a seven-month low against the dollar, after news that the European Central Bank is considering policy options such as staggered charges on banks hoarding cash or buying more debt. The speculation is that the ECB will cut the rate to -0.30 percent from -0.20 percent currently. Policymakers are considering a split-level rate contested step that would impose a higher charge on banks depending on the amount they deposit with the ECB – to soften the impact of any further deposit rate cut on banks. To the upside, immediate resistance can be seen at 1.0648. To the downside, major support level is located at 1.0565 levels.GBP/USD is supported in the range of 1.5050 and currently trading at 1.5129 levels. It reached session high at 1.5132 and hit low at 1.5062 levels. Sterling inched higher against the dollar on Wednesday, boosted by a government budgetary review that kept growth forecasts broadly intact and delivered less austerity than anticipated. In a Statement, British finance minister George Osborne left behind his ideas for big savings cuts to tax credits for low-earning households prompting a sigh of relief amongst sterling bulls who were concerned that more austerity would crimp growth and push out rate hike expectations. Sterling was up 0.7 percent against the euro at 70.07 pence per euro, having hit a low of 71.80 pence its lowest in two weeks earlier in the day. It was 0.2 percent higher against the dollar at $1.5117, having fallen to a two-week low of $1.5053 on Tuesday. To the upside, immediate resistance can be seen at 1.5153. To the downside, major support level is located at 1.5054 levels.USD/JPY is supported around 122.25 levels and currently trading at 122.75 levels. It made session high at 122.95 and hit session lows at 122.55 levels. The dollar rose against Japanese yen on Wednesday after the latest batch of U.S. economic data came fairly positive giving the Federal Reserve much needed confidence to raise interest rates next month. New U.S. single-family home sales surged in October and the inventory of properties for sale was the highest since early 2010, which could allay concerns of a significant slowdown in housing. The Commerce Department said on Wednesday sales increased 10.7 percent to a seasonally adjusted annual rate of 495,000 units. Wednesday’s stronger-than-forecast data on durables goods and jobless claims supported the notion the U.S. economy could handle a rate increase in December, but weaker-than-expected readings on consumer inflation and sentiment gave weight to the idea of a gradual path for rate increases. To the upside, immediate resistance can be seen at 122.93. To the downside, major support level is located at 122.31 levels.USD/CAD is supported at 1.3280 levels and is trading at 1.3290 levels. It has made session high at 1.3336 and lows at 1.3286 levels. The Canadian dollar edged lower against the U.S. dollar on Wednesday, pressured by pullback in crude oil and stronger-than -expected U.S. durable goods data, but pushed to a fresh four-month high against the euro. Crude oil traded lower as the focus shifted back to a deep global supply glut, after having been driven higher on Tuesday by raised geopolitical tensions. U.S. durable goods rose more than anticipated in October and jobless claims fell, but that was offset by tepid consumer spending for October. Meanwhile, Bank of Canada Deputy Governor Lynn Patterson said on Tuesday Canada’s economy is rebounding following a modest contraction in the first half of the year, boosted by non-energy exports and investment, which will help growth reach 2-1/2 percent in 2017. The currency’s strongest level of the session was C$1.3280, while its weakest level was C$1.3338. To the upside, immediate resistance can be seen at 1.3315. To the downside, major support level is located at 1.3260 levels.Equities RecapEuropean edged higher on Wednesday, helped by a lower euro and was further supported speculation that European central bank may extend its stimulus efforts.UK’s benchmark FTSE 100 closed up by 0.94 percent, the pan-European FTSEurofirst 300 ended the day up by 1.45 percent, Germany’s Dax ended up by 2.1 percent, France’s CAC finished the day up by 1.5 percent.U.S. stocks closed mixed on Wednesday in a thin volume trade after a bunch of data releases on Wednesday showed that the U.S. economy was growing modestly.Dow Jones closed up by 0.01 percent, S&P 500 ended flat, Nasdaq finished the day up by 0.27 percent.Treasuries RecapU.S. Treasury debt prices were steady to higher on Wednesday on record low yields for German government bonds and data that supported the view of muted domestic inflation ahead of the U.S. Thanksgiving Day holiday.The benchmark 10-year Treasuries notes were up 3/32 in price, yielding 2.232 percent, down 1 basis point from late on Tuesday.The two-year yield was up marginally at 0.934 percent, which was within striking distance of the 5-1/2-year peak seen on Nov. 6.The 30-year bond was the strongest performing maturity, rising 7/32 in price for a yield of 2.995 percent, down 1 basis point.Commodities RecapGold prices dropped on Wednesday, hovering just above the lowest level in nearly six years on pressure from a rebounding dollar after strong U.S. economic data heightened expectations of an interest rate hike from the Federal Reserve next month.Spot gold fell 0.4 percent to $1,070.46 an ounce at 2:41 p.m. EST (1941 GMT), not too far from a near-six-year low of $1,064.95 hit last week.U.S. gold for December delivery settled down 0.4 percent at $1,070 an ounce as the dollar .Crude futures steadied on Wednesday, recovering from the lows of the day, after a smaller-than-expected supply build in the United States and drop in the number of U.S. rigs actively drilling for oil.Benchmark Brent futures settled up 5cents at $46.17 on Wednesday, after falling more than $1 to a session low of $45.03.US crude West Texas Intermediate (WTI) futures finished the session 17 cents higher at 43.04 a barrel. WTI had also slipped more than $ 1 to an intraday low of $ 41.72.
The material has been provided by InstaForex Company – www.instaforex.com