Market Roundup
- EUR/USD better bid in relatively tight 1.0903/1.0968 range.
- USD/JPY, USD/CHF lower to 120.27, 0.9854 respectively.
- AUD/USD rally extends to fresh recovery high at 0.7281 from 0.7227.
- EUR/GBP off its best but maintain bull bias, up to 0.7371 from 0.7331.
- Brent crude futures surged 1% to $37.84.
- UK Nov BBA Mortgage Approvals 44.960k vs prev 45.463k revised.
- Kuroda: BOJ intends to make wide variety firms eligible for new ETF buying programme.
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Labor Department is expected to report jobless claims below 300,000 for the 42nd straight week. Initial claims for state unemployment benefits are likely to have dropped 1,000 to a seasonally adjusted 270,000 for the week ended Dec. 19. The continuing claims likely fell 28,000 to 2.21 million.
- (0900 ET/1400 GMT) Mexico’s national statistics agency releases trade balance for November. Analysts expect the trade deficit is expected to have decreased to $1,001 million, compared with $1,444 million in October.
- (0900 ET/1400 GMT) Mexico’s November jobless rate is likely to have dropped to 4.35 percent, from 4.55 percent in October.
Key Events Ahead
- (1300 ET/1800 GMT) SIFMA recommends early close.
- No Major Events Scheduled on account of Christmas Eve.
FX BeatUSD: The dollar slipped half a percent against the euro and the yen offering little sign of the strength most banks have predicted for 2016. The dollar dropped 0.4 percent against a basket of currencies to 97.973, down 1.3 percent since this time last week, having risen almost 9 percent this year. Against the yen it eased to 120.36 yen from 121.00. Against the euro, it lost 0.8 percent this week.EUR/USD: The euro traded at $1.0956, up just over 0.4 percent. It has recovered after making a low of 1.0869 and was trading around 1.09627. The major resistance is around 1.1000 and any break above 1.100 will take the pair to 1.1060/1.1090 level. On the downside minor support is around 1.0920 and break below targets 1.0880/1.0850.USD/JPY: The pair has broken minor support 120.70 and declined till 120.27 at the time of writing. It is currently trading around 120.28. Short term trend is still weak as long as resistance 121.50 holds. On the higher side any break above121.50 targets 122/122.25. The pair’s minor support is at 120 and break below targets 119.25/118.60.GBP/USD: Sterling was unchanged by UK data that showed banks approved 20 percent more mortgages in November than a year ago, trading up 0.1 percent against the dollar at $1.4888. Cable has broken minor resistance 1.4900 and jumped till 1.49097. The pair is facing resistance around 1.4950 and break above targets 1.5010/1.5060. On the lower side major support is around 1.4850 and break below targets 1.4800/1.4750 level.Overall bullish invalidation is only above 1.5100. A 0.4 percent fall to 73.64 pence per euro looked largely the result of the single currency’s gains against the dollar. USD/CHF: The pair has formed a temporary bottom around 0.9850 and slightly jumped till 0.9945 yesterday. The resistance is at 0.9950 and break above targets 1/1.0030 level. On the lower side support is at 0.9850 and break below will drag the pair down till 0.9820/0.9780 is possible. Overall bullish invalidation is only below 0.9780.AUD/USD: The Australian dollar was steady at $0.7240, from a trough of $0.7209 on Wednesday. But was on track to post solid gains for the week due to a hunt for yield. The resistance is around 0.7285 and any break above 0.7285 will take the pair till 0.7335/0.7380. On the lower side minor support is around 0.7240 and any break below will target 0.7200/0.7170. Short term weakness is only below 0.7150.NZD/USD: The New Zealand dollar held steady at $0.6796 in thin pre-Christmas trading. It touched a two-month peak of $0.6836 on Tuesday, putting it on track for a rise of nearly 1 percent this week. Equities RecapOil prices recorded gains for fourth consecutive day and drove European shares higher, while a 1 pct fall against euro took away the strong 2015 shine of USD.Gains in European stocks reflected the upbeat mood in Asia and on Wall Street. UK FTSE 100 climbed 0.3 pct, Spain’s IBEX gained 0.7 pct, France CAC 40 fell 0.1 pct and Germany’s DAX stock market was closed, with other markets closed early for Christmas.Japan’s Nikkei closed 0.5 pct lower after a solid start. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 pct, after U.S. shares posted their third consecutive session of gains. But China’s blue-chip CSI300 index and the Shanghai Composite Index fell 0.7-1.0 pct after regulators tightened rules for insurers investing in listed firms.Commodities RecapDeclining supply and lifting of a 40-year old ban on most US crude exports sent front month WTI crude futures 32 cents higher at $37.82 per barrel. Brent futures climbed to $37.66, dropping around 35 pct in 2015.Gold climbed in a thin trade ahead of holiday, after two days of losses, on softer USD and as oil prices extended a recovery from mutli year lows. Spot gold inched higher 0.3 pct to $1,073.60 an ounce, after losing 0.7 pct in the previous two sessions.Treasuries ReacpUS 10 year Treasury yield stood at 2.257, declining by 0.007 pct.European bond markets were closed.UK Gilts resisted any early sell side pressure from crude prices bounce and started 7 touches higher than the close of 116.87.New Zealand government bonds shed modestly, with yields rising 1.5 bps in the middle of the curve. Australian government bond futures were very quiet, with the 3-year bond contract unchanged at 97.940. The 10-year contract dropped 1 tick at 97.1450, while the 20-year contract declined half a tick at 96.6550. New Zealand and Australian markets will close early Thursday for a 4-day holiday.
The material has been provided by InstaForex Company – www.instaforex.com