Market Roundup
- USD gains broadly on growing view of Dec Fed rate rise, rises vs yen after Japan GDP slips.
- Stocks edge higher, impact from Paris attacks seen limited; European shares reverse initial losses to gain slightly.
- ECB’s Nowotny: Demand is necessary to avert Japan-style fate.
- Demand fears push copper to lowest in 6-yrs, Codelco offers 26% lower premium to China.
- ECB’s Coeure: closely following consequences of exceptional monetary policy on financial stability.
- China’s Xi says world needs new sources of economic growth – Xinhua.
- Canada factory sales unexpectedly fall in September; Manufacturing sales -1.5% vs Aug -0.6%.
Looking Ahead – Economic Data (GMT)
- No Significant Data
Looking Ahead – Events, Other Releases (GMT)
- 21:30 Australia RBA Assistant Governor Christopher Kent speaks at an economics conference in Sydney
- 00:30 Australia RBA will publish the minutes of November policy meetingCurrency SummariesEUR/USD is likely to find support at 1.0660 levels and currently trading at 1.0685 levels. The pair has made session high at 1.0700 and hit lows at 1.0671 levels. The dollar edged higher against euro on Monday as the investor favored more positive view that Federal Reserve will raise interest rates next month and investor concerns about Paris atrocities cooled down. The euro is under pressure as the as the euro is broadly sold across the board on expectations that European Central Bank will step up monetary easing next month, and more likely cut interest rates into negative levels and may buy more assets under its quantitative easing program. The euro rebounding in European session, fell to near 6-1/2-month lows, down nearly 1 percent versus the dollar at $1., Euro zone inflation printed 0.1 percent in October in line with expectation, the EU’s statistics agency said on Monday. To the upside, immediate resistance can be seen at 1.0705. To the downside, immediate support level is located at 1.0660 levels.GBP/USD is supported in the range of 1.5151 and currently trading at 1.5205 levels. It reached session high at 1.5220 and hit low at 1.5183 levels. Sterling slipped lower against a broadly stronger dollar on Monday, as traders are keenly waiting for UK economic data in the coming days that will give clear direction and picture to the Bank of England to start raising interest rates. Consumer price numbers are set be published on Tuesday and analyst expect the data to print 0.1 percent fall in annual terms, underscoring the challenge faced by the BoE of setting policy in a context of solid wage growth but zero inflation. Meanwhile Retail sales are due on Thursday. Sterling had been weakened on Friday after comments from a senior Bank of England policymaker, who said an interest rate hike by the U.S. Federal Reserve would not automatically mean that BOE will follow in the foots steps on Federal Reserve with regards to raising rates. To the upside, immediate resistance can be seen at 1.5225. To the downside, immediate support level is located at 1.5180 levels.USD/JPY is supported around 122.64 levels and currently trading at 123.18 levels. It to hit session high at 123.28 and made session lows at 122.88 levels. The US dollar surged against Japanese’s Yen on Tuesday after investors preferred dollar as safe heaven over other currencies and also on expectation that Federal Reserve will raise interest rate in December. Asian shares hit six-week lows overnight as investors bought safe-haven assets, including gold, the yen and low-risk government debt. But stocks on Wall Street climbed as European shares reversed early losses and the yen later fell after disappointing GDP figures.On the data front, Fed’s Empire State Manufacturing Survey came negative for the fourth consecutive month, momentarily driving investors into safer government debt. NY Empire State Manufacturing Index printed -10.74 against -6.00 forecast. To the upside, immediate resistance can be seen at 123.25. To the downside, immediate support level is located at 123.00 levels. USD/CAD is supported at 1.3300 levels and is trading at 1.3323 levels. It has made session high at 1.3368 and lows at 1.3318levels. The Canadian dollar weakened to six-week low against the U.S. dollar on Monday, as the dollar demand as safe heaven increased following Fridays attacks in Paris, and also weighted down disappointing Canadian manufacturing data and lower crude oil prices. Data on Monday showed Canadian manufacturing sales fell by 1.5 percent in September to the lowest level since May, impacted by lower motor vehicle assembly and oil product sales, according to Statistics Canada data. Analysts had predicted data to print at 0.1 percent rise. In addition, Canadian home sales rose 1.8 percent in October, leaving activity near the peak recorded earlier this year, according to release by Canadian Real Estate Association. The currency’s strongest level of the session was C$1.3300, while its weakest level was C$1.3371. To the upside, immediate resistance can be seen at 1.3348. To the downside, immediate support level is located at 1.3300 levels.Equities RecapEuropean shares made modest gains on Monday, supported by gains in the energy sector that helped offset a slump in travel and tourism companies stocks.UK’s benchmark FTSE 100 closed up by 0.3 percent, the pan-European FTSEurofirst 300 ended the day up by 01 percent, Germany’s Dax ended up by 0.2 percent, France’s CAC finished the day up by 0.2 percent.US stocks inched higher over 1 percent on Monday as investors bet Friday’s deadly attacks in Paris would have little long-term effect on the U.S. economy and corporate earnings.Dow Jones closed up by 1.37 percent, S&P 500 ended up by 1.49 percent, Nasdaq finished the day up by 1.14 percent.Treasuries RecapU.S. Treasuries prices were steady on Monday as the investors were positive that federal reserve will raise interest rates in December reducing the concerns related to Fridays Paris attacks. The yield on benchmark 10-year Treasury notes briefly fell 2 basis points after the New York Fed’s Empire State Manufacturing Survey which printed negative for the fourth consecutive month, forcefully driving investors into safer government debt.Ten-year Treasuries were up 4/32 in price to yield 2.268 percent, down from 2.28 percent late on Friday.Commodities RecapGold pared gains on Monday, after an initial flow of safe-haven buying following the attacks in Paris slowed down and investors focus returned to expectations for the U.S. Federal Reserve to raise interest rates in December.Spot gold rose as much as 1.4 percent to a 10-day high of $1,097.90 an ounce, and was up just 0.1 percent at $1,083.76 at 2:01 p.m. EST (1901 GMT), hovering above last week’s six-year low at $1,074.26.U.S. gold futures for December delivery settled up 0.3 percent at $1,083.60 an ounce.
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