Market Roundup
- KC Fed composite index drops in Dec, -9 vs 1 in Nov.
- Markit US Dec Services PMI 53.7 vs 55.9 forecast, Nov 56.1.
- Markit US Dec Mfg flash PMI 51.3 vs forecast 52.6, Nov 52.8.
- Fed’s Lacker says rate hike a sign of U.S. economic progress, low oil prices likely made Fed slower to hike.
- Canada Oct wholesale trade unexpectedly falls 0.6%, Canada annual inflation rises to 1.4% in Nov.
- Oil heads for third straight weekly loss as supply weighs.
- Dollar falls against yen after Japan stops short of extra QE.
- Fed RRP; Take much higher today (USD 143b) at the new 25 bp rate, 48 bidders. No term done.
- EU envoys agree extension of Russia sanctions until mid-2016.
- Mexico economy ‘very likely’ to grow above 3 percent in 2016-Carstens.
- Brazil’s Finance minister Levy replaced planning minister Barbosa; views more in sync with President Rousseff.
- BOE’s Carney hints he could stay until 2021.
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 1.0820 levels and currently trading at 1.0865 levels. The pair has made session high at 1.0872 and hit lows at 1.0804 levels. The dollar declined modestly against euro on Friday, after dollar was hurt by a stronger the yen across the board after the Bank of Japan opted for tweaks in existing monthly asset purchase programme, followed by poor reading of Philly Fed survey. The dollar’s move, after the Federal Reserve raised interest rates for the first time in almost a decade on Wednesday, reflected concerns of the impact of a stronger U.S. currency on both the United States and a raft of emerging economies. A poor reading of Thursday’s Philly Fed survey in the United States was the latest evidence of how much U.S. companies have already been squeezed by a 23 percent appreciation since the middle of dollar fell 0.8 percent to 121.26 yen on the back of the Bank of Japan’s announcements, but recovered to trade a touch higher against the euro at $1.0860 in late American trading hours.GBP/USD is supported in the range of 1.4860 levels and currently trading at 1.4893 levels. It reached session high at 1.4924 and hit low at 1.4884 levels. Sterling declined against against the dollar on Friday and was heading towads its worst week since August on a trade-weighted basis, on bets the Bank of England is in no rush to follow the U.S. Federal Reserve with an interest rate rise. In a widely expected move, the Federal Reserve raised its benchmark interest rate on Wednesday by 25 basis points and signalled that it would raise rates 4 more times next year, sending the dollar higher against all major currencies. Though the Bank Of England is expected to be the second major central bank to raise rates since the financial crisis, investors do not expect a move until late 2016, or even in 2017. Sterling edged down 0.1 percent on Friday to $1.4894, less than 20 cents away from a low of $1.4865 hit on Thursday – its weakest since late April.USD/JPY is supported around 120.50 levels and currently trading at 122.30 levels. It hit session high at 121.74 levels and made session lows at 121.04 levels. The U.S. dollar slipped sharply lower against the Japanese yen on Friday after the Bank of Japan fine-tuned its monthly asset-purchase program, indicating to traders that the central bank may not ease policy as much as expected. The BoJ set up a program to buy exchange-traded funds, extend the maturity of bonds it owns to around 12 years and increase purchases of risky assets. The move hurt the dollar against the yen, since traders viewed it as an indication that the BoJ may be less likely to ease monetary policy further. The dollar has advanced against the yen in the recent past on the view that the Federal Reserve’s path of raising interest rates and the BoJ’s path of more potential stimulus would support the greenback since it would drive more investment flows into higher-yielding U.S. assets. The dollar, which had hit a more than two-week high of 123.590 yen after the announcement, was last down 0.94 percent at 121.405.USD/CAD is supported at 1.3822 levels and is trading at 1.3942 levels. It has made session high at 1.4000 and lows at 1.3853 levels. The Canadian dollar made modest gain against its U.S. counterpart on Friday after softer-than-expected domestic data had helped send the currency to a more than 11-year low, although the recovery was cut short by further weakening in oil prices. Canada’s annual inflation rate rose to 1.4 percent, a touch shy of economists’ forecasts for a rise to 1.5 percent. Closely watched core inflation, which strips out volatile items, dipped to 2.0 percent, which was also short of expectations. Wholesale trade dropped by 0.6 percent in October from September, the fourth consecutive monthly decline, and far short of analysts’ average forecast for a 0.1 percent gain loonie, as Canada’s currency is colloquially known, fell to below 72 U.S. cents, a more-than-11 year low, after the U.S. Federal Reserve began its tightening cycle on Wednesday confidence that the U.S. economy will continue to recovery. The currency’s strongest level of the session was C$1.3855, while its weakest level was C$1.4003.Equities RecapEuropean shares fell in volatile trade on Friday, giving up most of the Fed-inspired gains of the previous session as investors took profits before the holiday season.UK’s benchmark FTSE 100 closed down by 0.76 percent, the pan-European FTSEurofirst 300 ended the day down by 0.98 percent, Germany’s Dax ended down by 1.21 percent, France’s CAC finished the day down by 1.06 percent.U.S. stocks fell on Friday afternoon for the second day in a row, as crude oil prices headed for their third weekly loss and stock and index options contracts were set to expire.Dow Jones closed down by 2.11 percent, S&P 500 ended down by 1.77 percent, Nasdaq finished the day down by 1.62 percent.Treasuries RecapPrices on U.S. Treasuries rose on Friday in choppy trading as stocks slipped and in rising investor belief over the Federal Reserve’s continues to raise interest rates as much as it would like next year.Two-year notes were last up 2/32 in price to yield 0.965 percent, down from 1.005 late on Thursday.U.S. benchmark 10-year Treasury notes were last up 10/32 in price to yield 2.202 percent, down from 2.238 percent late on Thursday.The U.S. 30-year bond was last up 14/32 in price to yield 2.913, down from 2.936 percent lateCommodities RecapGold rose more than 1 percent on Friday, recovering from its biggest daily loss in five months as stocks and the dollar retreated, but remained near multi-year lows after the Federal Reserve lifted U.S. interest rates.Spot gold was up 1.3 percent at $1,065.30 an ounce at 2:10 p.m. EST (1910 GMT), while U.S. gold futures for February delivery settled up 1.5 percent at $1,065 an ounce.Oil prices fell about half a percent on Friday after the U.S. oil rig count unexpectedly rose for the first time in five weeks, pressuring a market already at seven-year lows.WTI hit $34.29 a barrel, the lowest since February 2009, after the release of the Baker Hughes’ report. It settled the day down 22 cents, or 0.6 percent, at $34.73. For the week, WTI lost 2.5 percent.Brent finished the session down 18 cents, or 0.5 percent, at $36.88. Its session low was $36.41, just 21 cents above a 2004 bottom. Brent lost 3 percent on the week.
The material has been provided by InstaForex Company – www.instaforex.com