Market Roundup
- ISM manufacturing activity slumps in November, prices paid/new orders down, employment rises.
- Canada manufacturing growth shrinks for fourth month in Nov, Mfg PMI 48.6 in Nov.
- Atlanta Fed’s GDPNow forecast Q4 GDP at 1.4% down from 1.8% on Nov 25.
- Fed’s Evans: going into Dec meeting w/open mind, Doesn’t think US in Japan-like situation.
- China needs more users for “freely usable” yuan after IMF nod, Investors say Chinese markets still lack depth, liquidity.
- Dairy prices rise 3.6%, volumes drop at auction, avg selling price USD2,419/tonne – Fonterra.
- Dollar drops as data fuels uncertainty on Fed-ECB policy divergence.
- Approaching wave of ECB cash lifts inflation expectations, 5y-5y BE fwd moves above 1.8%.
- Euro gains on manufacturing PMI, German jobs data; ECB caution.
Looking Ahead – Economic Data (GMT)
- 00:30 Australia GDP QQ* Q3 forecast 0.8%, 0.2%-previous
- 00:30 Australia GDP YY* Q3 forecast 2.4%, 2%- previous
- 00:30 Australia GDP Final Consumption* Q3 0.9%- previous
- 00:30 Australia GDP Capital Expenditure*Q3 0.4%- previous
- 00:30 Australia GDP Chain Price Index* Q3-0.5%- previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.0580 levels and currently trading at 1.0636 levels. The pair has made session high at 1.0636 and hit lows at 1.0600 levels. The dollar slipped lower against euro on Tuesday as the negative reading in U.S. manufacturing employment and upbeat European economic data weakened the greenback against euro. Data showing unemployment in Germany at a record low and euro zone manufacturing growth at a 19-month high boosted the euro, which broke solidly through the $1.06 mark. The euro added to its early gains against the dollar after U.S. manufacturing data showed the sector slowing for a fifth straight month and falling to its weakest levels since June 2009. The single currency declined almost 4 percent against the dollar in November on expectations the ECB would add further stimulus to the euro zone at this week’s meeting. In contrast, the U.S. Federal Reserve is expected to raise interest rates later in the month, making it a more attractive currency for investors. To the upside, immediate resistance can be seen at 1.0648. To the downside, immediate support level is located at 1.0615 levels.GBP/USD is supported in the range of 1.5029 and currently trading at 1.5081 levels. It reached session high at 1.5094 and hit low at 1.5047 levels. Sterling was weaker against dollar on Tuesday, broadly hurt by a weaker-than-expected survey of the British manufacturing sector. The PMI survey showed manufacturing growth above lacklustre rates seen earlier in the year as export orders overall picked up, but it slowed last month from the rapid pace recorded in October. Sterling, up almost 0.4 percent at $1.5101 before the data, fell back to as low as $1.5070 in afternoon, flat on the day. The pound was down 0.4 percent against the euro at 70.22 pence per euro, with the single currency helped by better than expected euro zone manufacturing data. To the upside, immediate resistance can be seen at 1.5120. To the downside, immediate support level is located at 1.5048 levels.AUD/USD is supported around 0.7280 levels and currently trading at 0.7322 levels. It hit session high at 0.7336 and made session lows at 0.7313 levels. The Australian dollar jumped to multi-week highs against the U.S. dollar, yen and euro on Tuesday, as the loose monetary policies in Europe and Japan underpinned demand for carry trades. The Australian dollar gained half a cent to $0.7340, its highest since late October, to last trade at $0.7319. Major resistance was found just under 73 cents, the 76.4 percent retracement of the October-November fall. The Aussie was underpinned after upbeat domestic data reinforced the outlook for steady rates and burnished its reputation as a relatively high-yielding asset. This is in contrast to the Reserve Bank of Australia (RBA) which kept the cash rate at 2.0 percent for a seventh month, citing a gradual improvement in conditions in non-mining sectors. While the central bank seemed in no rush to cut again, it noted there was scope for further easing if needed. To the upside, immediate resistance can be seen at 0.7340. To the downside, immediate support level is located at 0.7300 levels.USD/CAD is supported at 1.3315 levels and is trading at 1.3361 levels. It has made session high at 1.3387 and lows at 1.3326 levels. The Canadian dollar slipped lower against the U.S. dollar on Tuesday, reversing earlier gains, after a deep contraction in September gross domestic product provided a weak hand off to the fourth quarter, although impacted by a large one-time factor. Canada pulled out of recession in the third quarter as acceleration in exports revived growth, supporting expectations the Bank of Canada will be content to keep interest rates where they are for some time. Separate data on Tuesday showed the pace of growth in the manufacturing sector contracted in November for the fourth month in a row.Gross domestic product increased at an annualized 2.3 percent rate last quarter, data from Statistics Canada showed on Tuesday. That was a tad shy of expectations for a 2.4 percent pace and slightly below the Bank of Canada’s forecast of 2.5 percent. Canada’s manufacturing sector contracted for the fourth month in a row in November, but at a slower pace, as the industry continued to be hurt by weak commodity prices. The RBC/Markit PMI edged up 48.6 last month from 48.0 in October. To the upside, immediate resistance can be seen at 1.3387. To the downside, immediate support level is located at 1.3315levels.Equities RecapEuropean shares fell on Tuesday, weighed down by a slump in Linde the world’s biggest industrial gases company by sales cut its 2017 profit target.
UK’s benchmark FTSE 100 closed up by 0.7 percent, the pan-European FTSEurofirst 300 ended the day down by 0.38 percent, Germany’s Dax ended down by 1.00 percent, France’s CAC finished the day down by 0.8 percent.US Stocks started December month on stronger note on Tuesday as health and consumer shares bounced back while auto sales suggested upbeat growth in November.Dow Jones closed up by 0.94 percent, S&P 500 ended up by 1.05 percent, Nasdaq finished the day up by 0.92 percent.Treasuries RecapU.S. Treasury prices rose on Tuesday, with benchmark yields touching near one-month lows after data showed that U.S. factory activity fell in November to the lowest level in six years.U.S. benchmark 10-year Treasury notes were last up 16/32 in price to yield 2.161 percent, down sharply from a yield of 2.218 percent on late Monday. The 10-year yield hit a near one-month low of 2.159 percent in the wake of the U.S. manufacturing data, which came in below expectations.The U.S. 30-year bond yield also touched a near one-month low of 2.927 percent. U.S. 30-year Treasury bonds were last up 1-6/32 in price to yield 2.930 percent, down from a yield of 2.990 percent late Monday.Commodities RecapGold rose for a second day on Tuesday, rebounding from last week’s 5-1/2-year low, as a retreat in the dollar prompted investors to cover short positions ahead of a European Central Bank (ECB) meeting and U.S. payrolls data this week.Spot gold was up 0.4 percent at $1,068.20 an ounce at 2:27 p.m. EST (1927 GMT), extending a bounce from its lowest since February 2010 last week at $1,052.46. U.S. gold futures for February delivery settled down 0.2 percent at $1,063.50 an ounce.Brent crude settled down on Tuesday on bets OPEC will not cut output to stem a supply glut when the world’s biggest oil producers meet later this week, while U.S. crude steadied on expectations of a stockpile drop.Brent settled down 17 cents, or 0.4 percent, at $44.44 a barrel.U.S. crude’s West Texas Intermediate futures finished the session up 20 cents at $41.85.
The material has been provided by InstaForex Company – www.instaforex.com