Market Roundup
- Japan debating whether to use FX reserves to make up for any shortfalls in tax revenues due to exemptions to next year's sales tax hike - Nikkei.
- BoJ Gov Kuroda - Markets somewhat volatile, monitoring moves closely, will do whatever it takes to achieve 2% inflation target - Reuters.
- Japan Nov core machinery orders -14.4% m/m, +1.2% y/y, -7.9% and +6.3% forecast, m/m decline largest since May '14.
- Japan Dec domestic corp goods prices -0.3% m/m, -3.4% y/y, -0.4%, -3.5% forecast.
- China SAFE - Not limiting FX sales to individuals - Xinhua.
- China stock exchanges to strictly monitor stock sales by major shareholders b- South China Morning Post.
- Australia Dec employment -1k, unemployment 5.8%, participation 65.1%, -15.5k, 5.9% and 65.2% forecast, full-time employment +17.6k.
- New Zealand Dec electronic card retail sales -0.2% m/m, +5.3% y/y.
- Fitch - House price growth to slow significantly in Australia, NZ.
- Explosions in center of Jakarta, many presumed dead, shoot-out reported.
- (0200 ET/0700 GMT) Germany '15 GDP, +1.7% y/y forecast; last +1.6%.
- (0330 ET/0830 GMT) Sweden Dec CPI, +0.1% m/m, +0.1% y/y forecast; last -0.2%, +0.1%.
- (0330 ET/0830 GMT) Sweden Dec CPIF, +0.1% m/m, +1.0% y/y forecast; last -0.1%, +1.0%.
- (0400 ET/0900 GMT) Italy Nov industrial output, +0.2% m/m, +2.5% y/y forecast; last +0.5%, +2.9%.
- (0830 ET/1330 GMT) United States w/e initial jobless claims, 275k forecast; last 277k.
- (0830 ET/1330 GMT) United States Dec import/export prices, -1.4%, -0.5% m/m forecast; last -0.4%, -0.6%.
- N/A EuroGroup meeting in Brussels, ECB Pres Draghi in attendance.
- N/A Portugal @E4 bln 2026 benchmark bond syndication.
- (0430 ET/0930 GMT) Spain E4-5 bln 0.25/1.15/5.4% 2018/20/23 Bono auctions.
- (0600 ET/1100 GMT) BoE DepGov Bailey in London panel discussion.
- (0700 ET/1200 GMT) BoE MPC announcement-minutes, no changes to policy forecast, 8-1 vote?
- (0730 ET/1230 GMT) ECB December policy meeting minutes.
- (0800 ET/1300 GMT) EC VP Katainen speech at Helsinki conference.
- (0840 ET/1340 GMT) Atlanta Fed Lockhart, US TsySec Lew speak at Atlanta forum.
- (0915 ET/1415 GMT) St Louis Fed Bullard presentation in Memphis.
EUR/USD: The euro trades at 1.0880 levels, after going as low as 1.0710 in the early session. The USD bulls were disappointed after Boston Fed President Eric Rosengren stated that global and U.S. economic growth may be slipping and could force the Fed into a more gradual course of rate hikes than officials currently expect. Further downward pressure on the dollar as traders are seen bullish on Euro trade data, scheduled on Friday. Immediate resistance is located at 1.1059 (Previous Day High), while support is seen at 1.0710 (Sessions Low).
USD/JPY: The pair trades higher at 117.70 levels, having touched sessions low of 117.29 levels. Sentiment soured for the greenback as U.S. stocks dropped to fresh 3-month lows and on low U.S. yields. Immediate support is located at 117.22 (Jan 12 Low), break below could take the pair to 116.69 (Jan 11 Low). On the upside, resistance is seen at 118.06 (Jan 12 High).
USD/CAD: The Canadian dollar slumped to a 12-year trough early on Thursday following another drop in oil prices. Investors sold the Canadian dollar as Brent crude dipped below $30 a barrel for the first time since April 2004, fuelling speculation the Bank of Canada could cut interest rates as early as next week. USD/CAD run higher, currently trades at 1.4350 levels, after making a high of 1.4382. The pair broke resistance at 1.4120 levels, next hurdle aligns at 1.4942 (Apr 2003 highs). On the downside support is seen at 1.4264 (5- DMA).
GBP/USD: The sterling was pinned near a 5-1/2 year low ahead of the Bank of England's first policy review of the year. The investors expect the central bank to be dovish on uncertain global backdrop, leaving rates unchanged. Currently the pair trades at 1.4410, after having touched sessions high of 1.4427. It moves within a thin range of 1.4389 - 1.4427. Immediate support is located at 1.4389 (Sessions Low), while the pait faces resistance at 1.4948 (5- DMA).
AUD/USD: The Australian Dollar trades low at 0.6924, nearing a 4-month low of 0.6907 hit in September. The Aussie faces downward pressure as a selloff in commodities and equities restored worries about global growth. Further the pair is weighed down by the iron ore prices, Australia's top export earner, as it is already down 8 percent so far this year. The pair continues to follow a bearish trend, as even a robust jobs report failed to impress the markets. Support is located at 0.6910 (Sept 7 Low), break below could drag the pair to further losses. On the upside, resistance is seen at 0.6961 (Sessions High).
NZD/USD: The New Zealand Dollar follows its fellow Antipodeans trend as it continues to fall multi-week lows. Markets continue to remain sensitive to what was happening in China and Asian equity markets. The kiwi trades at 0.6478, having touched sessions low of 0.6465. The pair sees support at 0.6452 (Nov 17 Low), break below could drag the pair to 0.6428 (Nov 18 Low). On the upside, resistance is located at 0.6514 (Sessions High).
USD/CNY: Yuan weakened at its open on Thursday despite a firmer midpoint set by the PBoC. The central bank of China set the midpoint rate at 6.5616 per dollar prior to market open, firmer than the previous fix of 6.563. The spot market opened at 6.5800 per dollar and was trading at 6.5794 in early trade, 51 pips away from the previous close and 0.27 percent away from the midpoint. The offshore yuan was trading -0.22 percent away from the onshore spot at 6.5937 per dollar. Market participants will continue to keep a watch on China's yuan, as the PBoC has held the line on its currency, calming fears of a sustained depreciation.
Equities Recap
Asian shares stumbled on Thursday in the wake of steep losses on Wall Street, while a rout in oil and commodities prices, with crude plumbing 12-year lows, heightened fears about the global economy.
MSCI's broadest index of Asia-Pacific shares outside Japan extended early losses and dropped 1.7 percent, while China's Shanghai Composite Index traded down at 1.2 percent, with CSI300 index off 0.8 percent. Taiwan Stocks edged down 1.0 pct at 7,742.88 points.
Australia's S&P/ASX 200 Index closed down 1.60 pct at 4,907.60 points, while Nikkei dropped 2.68 pct at 17,240.95, with Seoul Shares edging down 0.90 pct.
Commodities Recap
Gold rose for a second session on Thursday, recovering from a 1-week low as pressure on global equity markets and weakness in the U.S. dollar underpinned the precious metal. Spot gold gained 0.1 percent to $1,094.11 an ounce by 0007 GMT and U.S. gold futures gained 0.7 percent to $1,094.5. Among other precious metals, palladium dropped 0.8 percent to $481.1 an ounce, silver was little changed at $14.136 an ounce, while platinum gave up 0.3 percent at $845.03.
Global benchmark Brent tumbled 1.2 percent to $29.94, after marking fresh 12-year lows. U.S. crude prices were were last down slightly at $30.47 a barrel, not far from Tuesday's low of $29.93, which was their lowest level since December 2003.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 2.0821 percent up by 0.016.
Australian government bond futures hovered near multi-week peaks in a bullish flattening of the curve, with the 3-year bond contract up 4 ticks at 98.060. The 10-year contract rose 7.5 ticks to 97.3150, while the 20-year contract gained 6.5 ticks to 96.8200.
New Zealand government bonds joined the safe-haven rally, sending yields around 5 basis points lower.
