Market Roundup
- U.S. job openings rise to 5.431 million in Nov, may lead to pick-up in wage growth.
- IMF's Lagarde: Fed hikes need to be gradual, risk hurting emerging world.
- Fed's Kaplan: 4 hikes not a sure thing in '16, particularly given global volatility over a cooling Chinese economy.
- Bonds extend gains on solid auction greased by tanking oil and falling stocks.
- Oil trades below $30 a barrel for first time in 12 years.
- BP to slash thousands more jobs in face of oil downturn.
- Safe havens in play as oil falls, China seeks stable yuan.
- Mexico's Carstens: EM may need to intervene in new ways to cope with market volatility.
- Chile analysts see central bank holding key rate steady on Thursday.
- Argentina's Macri says wants end to debt battle with U.S. creditors.
Looking Ahead - Economic Data (GMT)
- --:-- CN Exports YY* Dec forecast -8%, -6.8%-previous
- --:-- CN Imports YY*Dec forecast -11.5%, -8.7%-previous
- --:-- CN Trade Balance USD*Dec forecast 53.00b, 54.10b- previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0800 levels and currently trading at 1.0854 levels. The pair has made session high at 1.0876 and hit lows at 1.0819 level. The dollar edged higher against euro on Tuesday as US stocks claimed higher and calmer financial markets enhanced appetite for currencies that offer higher yield. The euro and the yen, currencies with low interest rates used by investors to fund purchases of higher-yielding currencies in risky carry trades, were lower on the day after gains seen in the earlier days of the week. However, Investors have remained cautious, despite a rebound in stocks. Unexpected devaluation of China's yuan and a fall in oil prices to $30 a barrel. The euro , lost 0.1 percent versus the dollar to $1.0848 while the dollar was up slightly at 117.78 yen. The currencies strongest level of the session was $1.0856, while its weakest was $1.0817.
GBP/USD is supported in the range of 1.4350 and currently trading at 1.4446 levels. It reached session high at 1.4436 and hit low at 1.4350 levels. Sterling declined to a 5-1/2-year low against the dollar on Tuesday, after data showed British industrial output suffered its sharpest fall since early 2013 raising doubts about the strength of Britain's economy. Output fell 0.7 percent month-on-month worst than economists' forecasts at 0.0%. Manufacturing production data also disappointed, printing at 0.4 percent, prompting analysts to lower growth forecasts for the fourth quarter of 2015. The pound declined sharply after the data release on the day to $1.4378, its weakest since June 2010. Further decline is expected for this pair as concerns about a referendum on Britain's future in Europe and revisions to Bank of England rate hike expectations is set to weigh on the currency pair in the coming days. The BoE's monetary policy committee (MPC) meets on Thursday and the subdued activity data and turmoil in global markets is likely to weigh on policymakers.
AUD/USD is supported around 0.6935 levels and currently trading at 0.6984 levels. It hit session high at 0.7010 and made session lows at 0.6953 levels. The Australian dollar made modest gain against dollar and yen on Tuesday, but investors remained cautious of China's economy and recent erratic yuan guidance and its ultimate policy intentions. China rocked the world markets at the start of 2016 when it allowed the biggest fall in the yuan in five months, pressuring regional currencies and sending stocks around the globe tumbling as investors feared it would trigger competitive devaluations. The Australian dollar inched slightly higher to $0.6990 in an extremely oversold market, having hit a four-month trough of $0.6927 on Monday. It is still down 4 percent so far this year and a break under $0.6892 would take it to ground last trod in 2009.
USD/CAD is supported at 1.4225 levels and is trading at 1.4267 levels. It has made session high at 1.4313 and lows at 1.4168 levels. The Canadian dollar declined sharply against US dollar on Tuesday as the pair hit 1.4300 levels for the first time since May 2003 as a slump in oil prices extended to near $30 a barrel and analysts believe that the Bank of Canada will cut interest rates in the next meeting. However, the sustained weakness in the price of oil, a major Canadian export, increases pressure on Canada's central bank to act. The last time the Canadian dollar traded below that psychological threshold, U.S. crude oil prices were also trading below $30 a barrel. There is little hope oil prices will rebound anytime soon, as the market is flooded with oversupply outpacing demand and growing concern about weakening Chinese economy has further weighed on commodity related currencies. The loonie's strongest level of the session was C$1.4168, while its weakest was C$1.4313.
Equities Recap
European stocks rose on Tuesday, helped by solid updates from retailers and companies in other sectors but ended off earlier highs as volatile oil prices turned sharply lower.
UK's benchmark FTSE 100 closed up by 0.97 percent, the pan-European FTSEurofirst 300 ended the day up by 1.08 percent, Germany's Dax closed up at 1.77 percent, and France's CAC finished the day up by 1.66 percent.
U.S. stocks climbed in volatile trading on Tuesday as energy shares turned higher and Apple and other technology shares added to gains.
Dow Jones closed up by 0.73 percent, S&P 500 ended the day up by 0.79 percent, Nasdaq finished the day up by 1.04 percent.
Treasuries Recap
U.S. Treasury prices rose on Tuesday, with benchmark yields reaching two-and-a-half month lows on strong demand for safe-haven U.S. government debt as oil prices tumbled.
Benchmark 10-year notes were last up 15/32 in price to yield 2.106 percent, down from 2.158 percent on Monday.
The 30-year bond was last up 1-14/32 in price to yield 2.885 percent, down from 2.957 percent on Monday.
Commodities Recap
Gold fell for a third straight session on Tuesday as a rebound in European and U.S. stock markets undermined the metal's appeal as a haven from risk, and as the dollar strengthened against a basket of currencies.
Spot gold was down 0.3 percent at $1,090.30 an ounce at 2:39 p.m. EST (1939 GMT), while U.S. gold futures for February delivery settled down 1 percent at $1,085.20 an ounce.
Oil fell briefly below $30 a barrel on Tuesday, extending a relentless selloff that has wiped almost 20 percent off prices this year amid deepening concerns about fragile Chinese demand and the absence of output restraint.
Benchmark Brent crude fell 69 cents settle at $30.86, after bottoming at $30.34.U.S.
West Texas Intermediate crude(WTI) fell 97 cents to settle at $30.44 a barrel, a 3.1 percent loss, after touching a low of $29.93, which was last seen in December 2003.
