Market Roundup
- GBP reclaims ground above 1.5000, plays 1.5005 to 1.5080.
- EUR/USD inches higher, 1.0880-1.0941. 1.0981 was last week’s peak.
- AUD/USD remains under pressure, new p/break low at 0.7172. 0.7171 last week’s base.
- Yuan fixed at 5-week low, offshore rates close to 6.50.
- Swiss Nov Unemployment Rate unadj 3.4% vs prev 3.3%. Adjusted steady at 3.4%.
- ECB Nowotny: There was a massive failure of market analysts last week.
- Anglo American shares fall to new record low.
- Bank of England FPC shows differences over bank risk buffers.
- British Chambers of Commerce downgrades UK growth forecasts.
- China CB suspends new quota applications for RQDII offshore yuan inv programme – Sources.
- Japan’s GPIF ready to hedge FX volatility after record loss.
Economic Data Preview
- (0815 ET/1315 GMT) A report from Canadian Mortgage and Housing Corp is expected to show a rise in housing starts for November. Groundbreaking on new homes is likely to have increased to an annual rate of 198,700 from 198,100 in the prior month.
- (0830 ET/1330 GMT) Canadian building permits are expected to have risen 3.2 percent in October, after dropping 6.7 percent in September.
- (1000 ET/1500 GMT) U.S wholesale inventories likely rose 0.1 pct in October after growing 0.5 pct in September.
Key Events Ahead
- Bank of Canada Governor Stephen Poloz will give a speech on “The Evolution of Unconventional Monetary Policy” at the Empire Club of Canada in Toronto, six days after the Bank of Canada held interest rates steady in its last rate decision of the year. Poloz will also hold a press conference following the speech.
- (1045 ET/1545 GMT) FedTrade Operation 30-year Fannie Mae / Freddie Mac (max $2.100 bn).
FX BeatCurrencies of major commodity producers including Australia, Canada and Norway all steadied. The dollar was down 0.3 percent against a basket of six major currencies.EUR/USD: The euro inched higher and back towards one-month highs hit after last week’s surprising cautious policy moves by the ECB, while commodity-linked currencies regained lost ground. The euro gained around a quarter of a percent to touch $1.0916. The pair has broken 1.09050 and jumped till 1.09141. Short term trend is bullish as long as support 1.0830 holds. On the higher side any break above 1.09050 will take the pair till 1.09535/1.09800. Overall bullishness is only above 1.1000. The minor support is around 1.08060 and break below targets 1.0830/1.07900.USD/JPY: The yen was firmer against the dollar at 122.79 yen. The pair has retreated once again after making a high of 123.19 yesterday. Intraday trend is weak as long as 123.25 holds. On the higher side minor intraday resistance is around 123.25 and any break above targets 123.75/124.15. Minor support is at 122.60 and break below targets 122.20/121.80.GBP/USD: Sterling regained the lost ground above $1.50 on Wednesday, rising for the first time in four trading sessions, before a central bank rate-setting meeting. On a trade-weighted basis, sterling has shed around 2.5 percent since the BoE raised concerns about external developments weighing on the growth outlook early last month. Sterling rose 0.25 percent against the dollar at $1.5045, recovering from Tuesday’s low of $1.4956. It lagged the euro, with the single currency rising 0.15 percent to 72.67 pence, off a 7-week high of 72.79 pence struck on Tuesday. Cable has recovered till 1.5080 at the time of writing, short term trend is weak as long as resistance 1.5160 holds. The pair’s minor resistance is around 1.5105 and any break above that will take the pair to next level 1.5160. Overall trend reversal only above 1.5160 level. On the downside major support is around 1.5030 and break below targets 1.4980/1.4950 level.USD/CHF: The pair has declined till 0.9900 after making a high of 1.00340. It is currently trading around 0.99025, on the higher side minor resistance is around 0.9950 any break above will take the pair till 1/1.0035. Overall bearish invalidation is only above 1.0350. The pair’s minor support is around 0.9900 and break below targets 0.9870/0.9850.AUD/USD: The Aussie was up 0.3 percent at $0.7197 and remains well above long-term lows around 69 cents hit in September. The pair’s major intraday resistance is around 0.7240 and break above targets 0.7280/0.7300. On the lower side minor support is around 0.7170 and any break below will target 0.7100/0.7050. It has lost around a cent and a half since Friday when it hit a three-month peak.NZD/USD: The New Zealand dollar was relatively unchanged at $0.6637, having shed 1.6 percent so far this week. Uncertainty over whether the Reserve Bank of New Zealand (RBNZ) would cut interest rates on Thursday also kept investors wary.Equities RecapCommodity prices were calmer today, saw a respite from the previous day’s sell-off, helping the global equities to be modestly steady post a rough week led by fears regarding global demand.European stocks were under-performing broadly steadier. The pan-European FTSEurofirst 300 plunged 0.3 pct, with Britain FTSE, France CAC 40 and Geman DAX falling around 0.2 pct after starting higher in early trades.Japan’s Nikkie average closed down 0.98 pcct at 19,301.07, China’s CSI 300 Index ended up 0.4 pct, Shanghai Composite Index finished 0.1 pct higher, while HK’s Hang Seng Index ended down 0.5 pct.Commodities RecapThe commodity prices supported steady sentiment, US crude was trading 57 cents higher at $38.07 per barrel, Brent climbed to $40.74 per barrel.Gold stretched its profits, helped by USD softness, but its upside was capped by investors, as they were expecting US Fed rate hike in its next week’s meeting. Spot gold climbed 0.3 pct to $1077.60 per troy ounce, after 0.4 pct rise on Tuesday as USD fell against some major currencies.
Treasuries Recap U.S. 10-year Treasury yield stood at 2.2288, falling 0.9 bps on Wednesday. German bond yields edged higher.JGB prices closed the day moderately higher across the curve, pushing yields down 0.5bp to 2bp from yesterday’s afternoon close.UK Gilts started just 2 ticks down from the settlement of 117.82, as expected, as oil moved away from its recent lows and offered equity space some relief.New Zealand government bonds were mixed with very little change across the curve. Australian government bond futures were calm, with the 3-year bond contract flat at 97.870. The 10-year contract was steady at 97.1250, while the 20-year contract lost 1.5 ticks to 96.6050.
The material has been provided by InstaForex Company – www.instaforex.com