Market Roundup
- Japan Government forecasts – FY ’15/16 CPI +0.4%, FY’16/17 +1.2%.
- Japan nominal GDP +3.1%, real GDP +1.7%, fiscal stimulus package to add at 0.6%.
- EconMin Amari – CPI doesn’t have to rise exactly to 2% when assessing BoJ success.
- Japan to cut int rate est for FY ’16 budget, first cut in four years, to 1.6% – Nikkei.
- China should step up policy loosening to aid economy – China Sec Journal.
- Finland – Finns support for staying in Euro currency has fallen further (YLE poll).
- Germany Jan GfK consumer sentiment index, 9.4 vs 9.3 fcast, 9.3 previous.
- Germany Import prices m/m -0.2% vs 0.3%previous, y/y -3.5% vs -4.1% previous.
- Swiss Nov trade balance – CHF 3.144bln vs bln previous surplus.
- Sweden Nov retail sales, 0.4% mm as forecast,0.3% previous y/y 5.2% vs +5.0% previous.
- Sweden Nov PPI, mm -0.1% vs -0.3% previous, y/y -1.5% vs -1.8% previous.
- UK Nov PSNB mm bln, vs 11.0bln fcast, 6.748 bln previous, revised.
- UK Nov – ex-banks, bln vs 11.8bln fcast, 8.25 bln previous.
- UK PSNCR mm +5.381bln vs -3.997bln previous.
- China FX Regulator – To quicken development of Forex market next year.
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. economy likely expanded moderately in Q3 as businesses doubled down on efforts to reduce an inventory glut. The Commerce Department is likely to revise gross domestic product down to a 1.9 percent annual rate from the 2.1 percent pace reported last month. The revision will also likely reflect less consumer and business spending than previously estimated. GDP sales and Core PCE prices likely unchanged at 2.7 pct and 1.3 pct respectively. While corporate profits probably revised up 1.3 pct from a drop of 1.6 pct.
- (1000 ET/1500 GMT) U.S. existing home sales for November likely remained steady, after dropping 3.4 percent in October. The number of units slightly fell to 5.35 mln from 5.36 mln reported in October.
- (1000 ET/1500 GMT) Federal Reserve of Richmond releases its Composite Index for Dec, a survey including information on shipments, new orders, order backlogs, and inventories. The index dropped to 3 in the previous month.
Key Events Ahead
- (0945 ET/1445 GMT) FedTrade Ops 15Yr F.Mae/Fr.Mac max $600mln.
- (1145ET/1645 GMT) FedTrade Ops 30Yr Ginnie Mae max $1.150bln.
FX BeatUSD: The dollar was steady against the euro and yen. Traders were eyeing U.S. economic data for fresh direction despite holiday season kept ranges tight. Earlier in the session, it inched down 0.1 percent to 121.08 yen, having traded the previous day in a narrow range of 121.16-121.50. The dollar index was flat at 98.344. EUR/USD: The euro traded at $1.0914 after another blip higher in U.S. trading on Monday. It has broken minor resistance 1.08820 and jumped till 1.09439 at the time of writing. Minor resistance is around 1.0950 and any break above 1.0950 will take the pair to 1.100/1.1060 level. On the downside minor support is around 1.0880and break below targets 1.0850/1.0800. USD/JPY: The pair has broken minor support at 121 and declined till 120.84. It is currently trading around 121.05. Intraday trend is still weak as long as resistance 122.25 holds. On the higher side any break above122.25 targets 123/123.65. Minor support is at 120.80 and break below targets 120/119.25.GBP/USD: Sterling is consolidating in narrow range between 1.4950-1.48790. with dealers and analysts increasingly confident of ruling out further big moves before the end of the year in sagging volumes of trade. Minor resistance is around 1.4950 and any short term bullishness can be seen only above 1.4950. On the lower side major support is around 1.4850 and break below targets 1.4800 level. It is facing minor resistance around 1.4950 and break above will take the pair to next level around 1.5010/1.5060. Overall bullish invalidation is only above 1.5100.USD/CHF: The pair is trading in narrow range between 1.0000 and 0.9900 level. It is facing strong resistance around 1.0000 level and break above confirms minor trend reversal a jump till 1.1003/1.0550 is possible. On the lower side support is at 0.9900 and break below will drag the pair down till 0.9870/0.9850/0.9820 is possible. Overall bullish invalidation is only below 0.9800.AUD/USD: The Australian dollar was only the biggest gainer buoyed by steadier oil prices and hopes of more official action to support growth in China. It was half a percent higher and rose as high as $0.7247 where it met solid offers at the 72 U.S. cents chart barrier. At $0.7195 it has gained one full cent since touching a one-month trough last week. Major intraday resistance is around 0.7250 and break above targets 0.7285/0.7335. On the lower side major support is around 0.7150 and any break below will target 0.7100/0.7080. Aussie powered up to C$1.0040 and a break above C$1.0066 would bring September’s high of C$1.0229 in sight. NZD/USD: The New Zealand dollar was “grinding higher” at $0.6785 as U.S economic data disappoints. Major resistance was found at 68 cents. Equities RecapThe moderate oil price recovery from 11-year lows drove the world shares higher amid expectations of an increase in demand due to winter weather in northern hemisphere. European shares climbed to recover from a pullback in the earlier session caused by worries over Spain, as firmer energy stocks and takeover activity strengthened the region’s equity markets. The pan-European FTSEurofirst 300 index which plunged 1.2 pct on Monday, recovered to stand 0.5 pct higher, while the Euro STOXX 50 index advanced by 0.3 pct. Britain’s FTSE 100 climbed 0.7 pct, while Germany’s DAX progressed 0.6 pct.In Asia, Japan’s Nikkei stock index closed down at above session lows at 0.2 pct, MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.5 pct higher, after Wall Street recorded strong profits overnight. China’s CSI300 index went up modestly higher, erasing earlier losses, HK’S Hang Seng Index ended up 0.2 pct at 21,830.02 points and Shanghai Composite Index finished up 0.3 pct at 3,651.77 points.Commodities RecapOil prices saw a modest recovery, bouncing off 11-year lows hit on Monday as investors closed bearish positions before the year end holiday. Brent crude climbed 0.7 pct to $36.60 a barrel. After a 40 pct drop this year amid oversupply, including an 11 pct decline in last month alone, the sentiment towards battered oil remained weak.Gold continued profits from a 2-day rally, helped by USD slide, albeit oil prices slump and uncertainty over the future pace of U.S. interest rate hikes limited the metal’s advance. Spot gold was little changed at $1,079.20 an ounce, after earning 2.5 pct in last two sessions.Treasuries RecapUS 10 year Treasury yield stood at 2.188 pct versus US close of 2.197 pct on Monday.Euro zone bond yields were unchanged as the ECB temporarily paused its asset purchases programme over the Christmas break. German 10-year bunds were adding 1bp to 0.56 pct. Spanish 10-year borrowing costs were steady at 1.78 pct.UK Gilts started 5 touches lower than the close of 118.00, as expected, as the core markets adopted a mild risk on policy as crude prices moved off yesterday’s lows.New Zealand government bonds earned, pushing yields 3 bps lower. Australian government bond futures were a tick stronger, with the 3-year bond contract rising to 97.940. The 10-year contract gained 1.5 tick to 97.1900, while the 20-year contract was 1 touch higher at 96.6900.
The material has been provided by InstaForex Company – www.instaforex.com