Market Roundup
- EUR/USD offered from 1.0956 to 1.0914, off low into NY.
- GBP/USD off Tuesday 8 mth 1.4806 low. 1.4822 to 1.4873 range.
- Dollar index +0.6%, plays 98.185 to 98.407.
- UK Q3 GDP final 0.4% q/q, 2.1% y/y vs previous 0.5%/2.3% revised. 0.5%/2.3% expected.
- UK Q3 Business Investment final 2.2% q/q, 5.8% y/y vs previous 2.2%/6.6%.
- UK Q3 Current Account final -17.457bln vs previous -17.48bln revised. -21.50bln expected.
- Swiss Dec KOF Indicator 96.6 vs previous 97.3. 99.1 expected.
- Tory Hague issues Brexit warning – Telegraph.
- Spain’s Ciudadanos calls for pact with PP, Socialists.
- PBoC to extend onshore yuan trading hours in major reform.
Economic Data Ahead
- (0830 ET/1330 GMT) U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, likely rose 0.3 percent in November, after edging up 0.1 percent in October.
- (0830 ET/1330 GMT) Non-defense U.S. capital goods orders, excluding aircraft, a closely watched proxy for business spending plans, likely slipped 0.1 percent in November.
- (0830 ET/1330 GMT) Canada’s economy is expected to have expanded by 0.3 percent in October after a disappointing dip in September. After the economy pulled out of recession in the third quarter, early data has suggested the final quarter of the year got off to a weak start.
- (0830 ET/1330 GMT) Canada’s retail sales are expected to have gained 0.4 percent in October, offsetting a 0.5 percent drop the month before.
- (1000 ET/1500 GMT) U.S. new home sales likely rose 2 percent in November after gaining 10.7 percent in October.
- (1000 ET/1500 GMT) The final December reading of University of Michigan’s consumer sentiment index is expected to rise to 92 from a preliminary reading of 91.8 reported earlier this month.
- (1030 ET/1530 GMT) EIA Crude Oil Stocks Change for the week ending Dec 18 is expected to remain at 1.083M vs previous 4.801M.
Key Events AheadNo Major Events ScheduledFX BeatUSD: The dollar edged up in a thin trading ahead of holidays, with most major currency pairs trading in narrow ranges after a mixed set of US data overnight. The dollar index inched up 0.2 percent to 98.376 after marking three losing sessions. The dollar was down slightly at 121.01 yen, well below its Friday high of 123.49 yen and not far from the 1-week low of 120.72 it touched on Tuesday. EUR/USD: The euro was down 0.4 percent at $1.09185. It has retreated after making a high of 1.09820 and was trading around 1.09251. The major resistance is around 1.1000 and any break above 1.100 will take the pair to 1.1060/1.1090 level. On the downside minor support is around 1.0880 and break below targets 1.0850/1.0800. USD/JPY: The pair has broken minor support at 121 and declined till 120.72. It was trading around 120.96. Intraday trend is still weak as long as resistance 122.25 holds. On the higher side any break above122.25 targets 123/123.65. Minor support is at 120.60 and break below targets 120/119.25.GBP/USD: The Cable has recovered after making low of 1.4805 and was trading around 1.4880. On the lower side major support is around 1.4800 and break below targets 1.4750/1.4700 level. It is facing resistance at 1.4950/1.5010. Overall bullish invalidation only above 1.5100.USD/CHF: The pair has broken minor support at 0.9900 and declined till 0.9850 level. It is facing strong resistance around 1.000 level and break above confirms minor trend reversal a jump till 1.1003/1.0550 is possible. On the lower side support is at 0.9850 and break below will drag the pair down till 0.9820/0.9780 is possible. Overall bullish invalidation is only below 0.9780.AUD/USD: The The Australian dollar inched higher to $0.7237, from a low of $0.7182 on Tuesday. It has gained 0.7 percent this week, due in part to firmer prices for iron ore. The Aussie is facing minor resistance around 0.7250 and any slight bullishness can be seen only above that level. Any break above 0.7250 will take the pair till 0.7280/0.7335. On the lower side major support is around 0.7150 and any break below will target 0.7100/0.7080. Against its Canadian dollar, the Aussie held its own at $1.0008. It broke key resistance on Tuesday when it powered up to C$1.0108, the highest level in over a year. NZD/USD: The New Zealand dollar was a clear outperformer at $0.6809, hovering close to a two-month peak of $0.6836 touched on Tuesday. The kiwi made headway against a battered pound which skidded 1 percent on Tuesday to touch a six-month trough of NZ$2.1700.Equities RecapWorld stocks rose for a third consecutive day as oil inched higher from its 11-year lows and the dollar posted minor gains in thin trade ahead of holidays. MSCI’s all-country world stocks index rose 0.36 pct, though it is down 4.5 pct for the year.European stocks climbed on last trading day before Christmas hooliday, following the Asian shares higher. The pan-European FTSEurofirst 300 index edged higher 1.5 pct, driven by miners which rallied on higher prices of copper. Germany’s DAX rose 1.2 pct, UK’s FTSE climbed 0.7 pct, France’s CAC edged up 1 pct.Tokyo markets were closed for the Emperor’s Birthday holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan went up 0.6 pct to the highest in almost two weeks. In China, the blue-chip CSI 300 index reversed a 4-day winning streak and ended down 0.3 pct while the Shanghai Composite index closed down 0.4 pct and HK’s Hang Seng Index closed up 1.0 pct at 22,040.59 points.Commodities RecapOil prices recovered but struggled to erase the earlier week’s losses. Brent crude traded at $36.50 a barrel, up 39 cents, having touched an 11-year low of $35.98 on Tuesday.Gold rose, taking support from oil prices rebound and a softer USD as the metal drifted in a tight range in thin pre-holiday trade. Spot gold climbed 0.3 pct to $1,074.98 an ounce.Treasuries RecapUS 10 year Treasury yield stood at 2.239 pct, unchanged from Tuesday’s close in New York.Low risk government bond yields were little changed. German 10-year Bund yields stood at 0.61 pct, rising 1 bp on the day.UK Gilts started 14 touches lower than the close as core fixed income markets reacted to a strong open in equity space.New Zealand government bonds lost, pushing yields 2.5 bps higher across the curve. Australian government bond futures reversed from multi-week peaks, with the 3-year bond contract falling 1 tick at 97.940. The 10-year contract shed 3.5 ticks to 97.1650, while the 20-year contract eased 3 ticks to 96.6800.
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