Market Roundup
- WTI oil futures fall to lower price since August; Brent oil prices to lowest since March 2009.
- Dutch Central Bank cuts 2015 growth forecast to 1.9% from 2.0% June forecast; Cuts 2016 forecast to 1.7% from 1.8% June forecast.
- Danish CB Gov Rohde: Not seen any sign that interest rates can’t be lower.
- BoE’s Carney: Stress testing of investment fund sector can be expected in the future.
- Fitch: ECB move adds to challenge for Euro money market funds.
- Russian Econ Minister Ulyukaev: Oil mkt volatility to ease in H2 of 2016, price forecast of $50/bbl realistic; Doesn’t see risks for budget or banking sector from oil prices of $40/bbl.
- Fed’s Bullard: Inaccurate Fed forecasts pulling central bank in different directions a ‘long-standing problem’; f/c overestimating GDP growth & inflation pull policymakers in one direction while underestimate of unemployment decline pulls in the other; Recent months more weight given to slower-than-expected growth, leading policymakers to keep rates lower for longer.
- Fed’s Bullard: If inflation stays low next year once oil & the USD stabilize it would be a blow to the Fed’s economy narrative.Macro Themes in Play
Looking Ahead – Economic Data (GMT)
- 21:45 New Zealand Q3 Manufacturing Sales no forecast, prior -0.2%
- 23:50 Japan Nov Bank Lending y/y, no forecast, prior 2.5%
- 23:50 Japan Q3 GDP q/q, forecast 0.0%, prior -0.2%
- 23:50 Japan Q3 GDP q/q Annualized, forecast 0.1%, prior -0.8%
- 23:50 Japan Q3 GDP Cap Ex, forecast 0.7% prior -1.3%
- 00:30 Australia Nov NAB Bus. Confidence, no forecast, prior
- 2 00:30 Australia Nov NAB Bus. Conditions, no forecast, prior 9
- 02:00 China Nov Trade Balance, forecast $63.3 bln, prior 61.6 bln
- 02:00 China Nov Exports y/y, forecast -5.0%, prior -6.9%
- 02:00 China Nov Imports y/y, forecast -12.6%, prior -18.8%
Looking Ahead – Events, Other Releases (GMT)
- Euro Zone EU Finance Ministers meet in Brussels
Currency SummariesEUR/USD is likely to find support at 1.0750 levels and currently trading at 1.0834 levels. The pair has made session high at 1.0857 and hit lows at 1.0807 levels. The dollar broadly gained against euro on Monday on expectations the U.S. Federal Reserve will raise interest rates next week in the backdrop of Fridays strong payroll data. The greenback climbed for a second straight session day after last Thursday’s stunning 3 percent fall against the euro, after the European Central Bank delivered fewer stimuli than the market expected. The euro was down 0.4 percent at $1.0845, while the dollar edged up about 0.1 percent to 123.23 yen. Meanwhile, the greenback gained a third of a percent against a basket of currencies, it surged 1.5 percent against the New Zealand dollar to $0.6647 ahead of Wednesday’s meeting of the Reserve Bank of New Zealand. Another cut in interest rates there is on the table but, many say, is not priced in by markets. To the upside, immediate resistance can be seen at 1.0872. To the downside, immediate support level is located at 1.0805 levels.GBP/USD is supported in the range of 1.5000 and currently trading at 1.5048 levels. It reached session high at 1.5074 and hit low at 1.5042 levels. Sterling slipped against the dollar on Monday, the dollar was broadly stronger across the board after a strong US jobs report made the first rate hike by the Federal Reserve in almost a decade a near certainty. Investors are on the sideline with caution about the pound before the Bank of England’s monetary policy committee meeting on Thursday, when policymakers are widely expected to vote to keep rates unchanged at record lows. Sterling has been under pressure after a dovish Inflation Report in November flagged risks to growth from external developments. Many saw that as the BoE’s attempt to rein in the currency which was eying 7-year highs on a trade-weighted basis. The BoE is expected to be the second major central bank after the U.S. Federal Reserve to raise rates since the financial crisis. But investors are cautious about the timing and are currently betting that a hike will not happen until late 2016, given inflation has been rather subdued.To the upside, immediate resistance can be seen at 1.5062. To the downside, immediate support level is located at 1.5020 levels.AUD/USD is supported around 0.7240 levels and currently trading at 0.7265 levels. It hit session high at 0.7272 and made session lows at 0.7255 levels. The Australian dollars traded in the lower range against US dollar on Monday with the market reluctant to take large bets ahead of data and a central bank rate review later in the week. The Australian dollar was a touch softer at $0.7223, having touched $0.7386 on Friday, a level not seen since August. It has rebounded more than 4 percent so far this quarter, in part due to carry trades where global investors can borrow at low rates in euros and yen to buy higher-yielding assets such as the Aussie or kiwi dollars. Meanwhile, The Aussie traded near 3-1/2-month highs against the yen, while the euro hovered at A$1.4814, having tumbled 17 cents since August. This week, the focus will be on Australia’s job report, a bevy of Chinese data and the Reserve Bank of New Zealand’s (RBNZ) rate review. To the upside, immediate resistance can be seen at 0.7300. To the downside, immediate support level is located at 0.7245 levels. USD/CAD is supported at 1.3470 levels and is trading at 1.3507 levels. It has made session high at 1.3522 and lows at 1.3502 levels. The Canadian dollar slipped to 11years low on Monday, weighted down by further fall in crude oil prices and the likely start of U.S. Federal Reserve tightening next week. Oil prices edged closer to 2015 lows after the Organization of the Petroleum Exporting Countries ended its policy meeting on Friday with no sign of any agreement to lower production. U.S. crude prices were down 3.35 percent to $38.63 a barrel, while Brent crude lost 2.65 percent to $41.86. During the late US session the Canadian dollar was trading around C$1.3486 to the greenback, or 74.15 U.S. cents, much weaker than the Bank of Canada’s official close on Friday of C$1.3377, or 74.76 U.S. cents. The currency’s strongest level of the session was C$1.3363, while its weakest level was C$1.3522. To the upside, immediate resistance can be seen at 1.3523. To the downside, immediate support level is located at 1.3470 levels.Equities RecapEuropean shares gained on Monday as the price of crude neared 7-year lows, pulling down oil shares, and Electrolux’s share price slumped after its deal to buy General Electric’s appliance business fell through.UK’s benchmark FTSE 100 closed up by 0.04 percent, the pan-European FTSEurofirst 300 ended the day up by 0.35 percent, Germany’s Dax ended up by 1.1 percent, France’s CAC finished the day up by 0.8 percent.U.S. stocks declined on Monday with energy stocks suffering their worst day since August as oil prices fell to their lowest level in nearly seven years and materials stocks also falling sharply.Dow Jones closed down by 0.64 percent, S&P 500 ended down by 0.69 percent, Nasdaq finished the day down by 0.79 percent.Treasuries Recap U.S. long-dated Treasury debt prices rallied on Monday, boosted by the drop in oil prices which suggests inflation in the world’s largest economy would remain benign.In late trading, U.S. benchmark 10-year Treasury notes were up 13/32 to yield 2.227 percent, down from Friday’s 2.273 percent.The 30-year bond rose more than a point to yield 2.953 percent, down from 3.007 percent on Friday.U.S. 2-year Treasury notes, meanwhile, were little changed in price, with a yield of 0.934 percent, down from 0.951 percent on Friday. On Thursday, two-year yields hit 0.994 percent, their highest since May 2010.Commodities RecapGold fell more than 1 percent on Monday from the prior session’s three-week high, after the dollar was lifted by Friday’s upbeat U.S. jobs data that reinforced expectations that the Federal Reserve will raise interest rates next week.Spot gold was down 1.1 percent at $1,074.90 an ounce at 2:01 p.m. EST (1901) GMT.U.S. gold futures for February delivery settled down 0.8 percent at $1,075.20.Crude oil futures slipped as low as 6 percent on Monday, reaching their lowest in almost 7-years, after OPEC failed to address a growing supply glut, while a stronger dollar further added to more decline in oil prices.
WTI, the West Texas Intermediate benchmark for U.S. crude, settled down $2.32 at $37.65 a barrel. That was its lowest settlement since February 2009, and after reaching a session low of $37.50.
Brent, the global crude benchmark, settled down $2.27 at $40.73, after striking a February 2009 low of $40.60.
The material has been provided by InstaForex Company – www.instaforex.com