Market Roundup
- Nov Chicago Fed business data drops (-0.3% vs -0.17% in Oct).
- Fed’s Lockhart: initial Fed hike & the next few, perhaps every other meeting, will not curb economy’s momentum.
- Dollar slips vs euro after Spanish election ends inconclusively, tough coalition talks loom.
- Oil at 11-year low but Wall St rebounds from week-ago declines.
- ECB’s Weidmann: euro zone recovery should pick up in 2016; Euro states that should be consolidating are loosening policy.
- Brazil’s Barbosa vows fiscal discipline; markets reflect doubt.
- Chile central bank cuts 2016 growth view, sees paused interest rate hikes.
- Argentina agrees to ‘substantive’ debt talks in January: mediator.
- Japan govt to cut JGB sales, wary of impact on BOJ’s QQE.
- Japan’s Finance Ministry will lower the assumed long-term rate used to estimate interest payments in the fiscal 2016 budget – NIKKEI.
Looking Ahead – Economic Data (GMT)
- No Significant Data
Looking Ahead – Events, Other Releases (GMT)
- No Significant Events
Currency SummariesEUR/USD is likely to find support at 1.0880 levels and currently trading at 1.0924 levels. The pair has made session high at 1.0937 and hit lows at 1.0889 levels. The dollar weakened against Euro in thin trading on Monday as the euro strengthened in the wake of an inconclusive election result that may increase unease over Spain’s financial stability. Conservative Popular Party won more seats than any other party but fell well short of a majority. Left-wing parties also failed to win a clear mandate to govern, and talks to form a coalition government could drag on for weeks. The euro rose despite no parties in Spain won a clear mandate to govern this weekend, raising concerns about the economic reforms in the euro zone’s fourth biggest economy. The single currency was up 0.4 percent at $1.0911.GBP/USD is supported in the range of 1.4859 and currently trading at 1.4883 levels. It reached session high at 1.4924 and hit low at 1.4871 levels. The dollar gained against Sterling on Monday in thin holiday season trade, extending its gains in US session from earlier session shrugging of weak Chicago Fed’s National Activity Index. Bank of England Deputy Governor Minouche Shafik last week sounded to analysts that BOE was in no hurry to raise interest rates in a speech in London that banged home the message from last central bank’s meeting of no change soon. That offered the pound no support in a month which has seen a number of banks predict the debate over a European Union “Brexit” will make it one of the losers among major currencies in the months ahead. Sterling, which has suffered in the past month from investors beginning to bet on volatility, or simply losses, as the EU debate heats up next year, fell briefly reaching as low as $1.5871 against the dollar.USD/CAD is supported at 1.3917 levels and is trading at 1.3963 levels. It has made session high at 1.3992 and lows at 1.3944 levels. The Canadian dollar was slightly stronger against its U.S. counterpart on Monday despite renewed weakness in oil prices, with a lack of liquidity and last week’s significant weakening leading to a tight trading range. Trader was reluctant to make any significant moves in holiday heavy week. The U.S. currency also weakened after data from the Chicago Federal Reserve suggested the U.S. economy grew at a below average pace in November. The currency’s strongest level of the session so far was C$1.3914, while its weakest level was C$1.3969. Canadian government bond prices were higher across the maturity curve, with the two-year price up 2 Canadian cents to yield 0.491 percent and the benchmark 10-year rising 20 Canadian cents to yield 1.377 percent.USD/JPY is supported around 120.54 levels and currently trading at 121.08 levels. It hit session high at 121.33 and made session lows at 121.80 levels. The dollar declined against Japanese Yen on Monday after data from the Chicago Federal Reserve showed the U.S. economy grew at a below average pace in November before the Federal Reserve raised interest rates last week. The Chicago Fed’s National Activity Index was -0.30 last month, compared with a downwardly revised -0.17 in October. The November figure was the weakest in six months. Meanwhile, Japanese stocks edged down in thin trading, putting pressure on exporters after the Bank of Japan disappointed markets with minor adjustments to its massive stimulus programme.The euro reached a session high against the dollar at $1.0896, which was up 0.2 percent from late on Friday, while the greenback pared its earlier gains versus the yen, last unchanged from Friday at 121.20 yen.Equities RecapEuropean shares fell on Monday, giving up their earlier gains as losses in Spain and a rise in the euro weighed on the region’s stock markets.UK’s benchmark FTSE 100 closed flat, Germany’s Dax ended down by 0.7 percent, France’s CAC finished the day down by 0.9percent.US stocks posted moderate gains in the quiet trading day Monday, recovering part of their losses sustained late last week.Dow Jones closed up by 0.71 percent, S&P 500 ended up by 0.77 percent, Nasdaq finished the day up by 0.91 percent.Treasuries RecapU.S. long-dated Treasury yields edged higher on Monday after U.S. crude oil prices stabilized somewhat, leading to a marginal rise in inflation expectations, while other Treasury yields were little changed on caution ahead of year-end.Benchmark 10-year U.S. Treasury notes were last up 2/32 in price to yield 2.190 percent, from a yield of 2.197 percent late on Friday. U.S. 30-year Treasury bonds were last down 5/32 in price to yield 2.917 percent, from a yield of 2.908 percent late on Friday.U.S. two-year Treasury notes were last mostly flat in price to yield 0.948 percent, from a yield of 0.960 percent late on Friday.Commodities RecapGold rose more than 1 percent on Monday as weaker than expected U.S. data and uncertainty about how fast the Federal Reserve will tighten interest rates next year weighed on the dollar.Spot gold rose 1.2 percent to $1,078.49 an ounce by 1:58 p.m. EST (1758 GMT), following a 1.4 percent gain on Friday. U.S. futures for February delivery settled up 1.5 percent at $1,080.60 an ounce.Global oversupply concerns dragged Brent crude oil prices down on Monday to their weakest level in more than 11 years, but Wall Street gained broadly as investors went shopping after two days of sharp declines.Brent futures recovered some ground to settle down 1.4 percent at $36.35 a barrel after falling as much as 2.3 percent to $36.04 earlier, the lowest since July 2, 2004. U.S. crude settled up 1 cent at $34.74 after falling to $33.98, its lowest since Feb. 13, 2009
The material has been provided by InstaForex Company – www.instaforex.com