Market Roundup
- U.S. CaseShiller home prices up 5.8% in November rise at fastest rate since July 2014.
- Bond prices rise despite oil recovery ahead of FOMC, USD drags as oil rise lifts loonie, sterling.
- German two-year yields hit new low as March ECB cut priced in.
- Gold at 12-wk high on safe haven buying, gradual Fed hike path stirs short-covering.
- BoE’s Carney says Brexit fears could pose current account deficit risk, Time still not right for hike, could go below 0.5% if necessary.
- BoE’s Forbes predicts “abysmal” Q4 productivity data, warns not to read too much into 1 quarter.
- Investment inflows into Brazil soar, external gap meets forecast; weak CCY & asset prices trigger M&A jump.
- Goldman, Credit Suisse lower 2016 oil price forecasts.
Looking Ahead – Economic Data (GMT)
- 00:30 Australia NAB Business Conditions *Dec 10-previous
- 00:30 Australia NAB Business Confidence* Dec 5- previous
- 00:30 Australia CPI QQ* Q4 forecast 0.3, 0.5- previous
- 00:30 Australia CPI YY* Q4 forecast 1.6, 1.5- previous
- 00:30 Australia RBA Weighted Median CPI QQ*Q4 forecast 0.5, 0.3- previous
- 00:30 Australia RBA Weighted Median CPI YY*Q4 forecast 2.1, 2.2- previous
- 00:30 Australia RBA Trimmed Mean CPI QQ*Q4 forecast 0.5, 0.3- previous
- 00:30 Australia RBA Trimmed Mean CPI YY* Q4 forecast 2.1, 2.1- previous
- 00:30 Australia CPI Index Number* Q4 108- previous
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.0800 levels and currently trading at 1.0854 levels. The pair has made session high at 1.0860 and hit lows at 1.0824 levels. The dollar declined against euro on Tuesday after recovery in oil prices pushed the dollar lower against the euro on Tuesday, it also fell against sterling and the oil-linked Canadian dollar. The dollar index fell 0.15 percent despite positive U.S. economic data which showed surprisingly large boost in consumer confidence and a rise in U.S. home prices. The positive data was shrugged off by markets, as the investors are keenly awaiting the outcome of FOMC meetings on Wednesday. The increase in risk appetite also encouraged investors to take profits on sterling which had fallen as low as $1.4171 in European trading. The dollar gained 0.2 percent against the yen to 118.50 while the euro was last at down 0.2 percent at $1. will be closely watching the U.S central bank’s message on Wednesday to determine trajectory the Federal Reserve will take as plummeting oil prices, Chinese economic slowdown heightened fears in the global economyGBP/USD is supported in the range of 1.4300 and currently trading at 1.4350 levels. It reached session high at 1.4366 and hit low at 1.4240 levels. Sterling rose against the dollar and euro on Tuesday as stock markets and oil prices recovered, providing some relief to investors who were worried by number of external and domestic risks to the British economy. The pound rose half a percent to $1.4324, leaving it around 2-1/2 cents clear of last week’s low of $1.4080. It was also 0.7 percent up against the euro at 75.635 pence. Worries over global growth, the risks of Britain leaving the European Union and the prospect of near-zero UK interest rates until well into 2017 weighed on the pound enough last week to send it to a seven-year low versus the dollar and a one-year trough against the euro. Meanwhile,Bank of England Governor Mark Carney said on Tuesday that the conditions for an interest rate rise were not yet in place, reiterating his comments last week suggesting the central bank was some way off raising interest rates.AUD/USD is supported around 0.6960 levels and currently trading at 0.7006 levels. It hit session high at 0.7018 and made session lows at 0.6992 levels. The Australian dollar rebounded strongly against US dollar on Tuesday, after crude oil prices gained more than 4 percent on Tuesday as investors hoped oil producers would reach a deal to reduce output as the oil market is facing biggest supply gluts in decades. The Australian dollar was trading at $0.7007, in late New York trading. On the data front, CPI, NAB Business Confidence are key data to be released from Australia. The CPI is forecasted to print at 0.3%, if the data prints negative figures Australian dollar is expected to come under bearish pressure as it will lead to calls for the central bank to act as their inflation targets will diminish. The collapse in oil prices and slackening global growth have stoked deflationary pressures across a number of emerging and developed economies and have raised the odds of more monetary easing. USD/CAD is supported at 1.3400 levels and is trading at 1.3110 levels. It has made session high at 1.4120 and lows at 1.4048 levels. The Canadian dollar rallied against its U.S. counterpart on Tuesday, as the oil prices recovered on hopes of a deal to address a global crude supply glut. A 6 percent slump in Chinese shares weighed on market sentiment, but was offset by firmer oil prices. U.S. Federal Reserve policymakers meet on Tuesday and Wednesday for the first time since raising interest rates in December. While no move is expected, investors will closely watch their statement to see how recent events have influenced the central bank’s outlook. The currency’s strongest level of the session was C$1.4056, while its weakest level was C$1. currency rallied 3 percent last week after the Bank of Canada surprised many traders by leaving its policy rate on hold. On Friday, it touched its strongest level since Jan. 11 at 1.4115.Equities RecapEuropean stocks gained on Tuesday after early losses, with commodities stocks rebounding after oil rose towards $31 on hopes of an agreement to deal with supply glut and metals prices gaining ground on speculative buying.UK’s benchmark FTSE 100 closed up by 0.7 percent, the pan-European FTSEurofirst 300 ended the day up by 1 percent, Germany’s Dax ended up by 1 percent, France’s CAC finished the day up by 1.2 percent.Wall Street rebounded sharply on Tuesday, driven by a surge in oil prices and strong results from multinationals 3M, Johnson & Johnson and Procter & Gamble.Dow Jones closed up by 1.78 percent, S&P 500 ended up by 1.41 percent, Nasdaq finished the day up by 1.10 percent.Treasuries Recap U.S. Treasury debt prices were slightly higher on Tuesday as the Federal Reserve began its two-day meeting, with investors anticipating the meeting would conclude with a dovish statement by the central bank saying it will not raise rates as many times as it hoped it would this year.The benchmark 10-year note was last up 7/32 in price to yield 1.999 percent, down from 2.022 percent late Monday.The 30-year bond was up 10/32 in price to yield 2.786 percent, down from 2.802 percent late on Monday.Commodities RecapGold rose to a 12-week high on Tuesday, shrugging off strong stocks with nervous investors moving into safe havens as the U.S. Federal Reserve began a two-day meeting expected to give clues about the timing of the next interest rate increase.Spot gold was up 1.3 percent at $1,121.80 an ounce at 2:16 p.m. EST (1916 GMT), the highest since Nov. 4.U.S. gold futures for February delivery settled up 1.3 percent at $1,120.20 an ounce, the highest since early November.Oil prices ended more than 4 percent higher on Tuesday as investors hoped OPEC and non-OPEC producers were inching closer to a deal to reduce output amid one of the biggest supply gluts in decades.Brent crude settled up $1.30, or 4.26 percent, at $31.80 a barrel, rebounding from a decline at the start of the session to top out at $32.72.U.S. crude settled $1.11, or 3.7 percent higher, at $31.45 a barrel, almost a $1 off its high of $32.41.
The material has been provided by InstaForex Company – www.instaforex.com