Market Roundup
- Shares slip on seesaw in oil prices, weak China data.
- US Non-Mfg sector cap investment seen +7.5% -ISM.
- U.S. job openings (JOLTS) fall to 5.383 million in Oct.
- UST yields inch higher in choppy trading as oil slides.
- Japan is considering letting its public pension fund invest directly in stocks - Nikkei.
- Bank of Canada: New lower bound for rates -0.5 pct; no need now as economy recovers as expected.
- Oil-linked currencies take a beating, Canadian dollar at 11-year low.
- UK economy grows around 0.6 percent in three months to Nov - NIESR.
- ECB's Makuch: no reason to consider change in CPI target, market expectations don't form policy, we follow inflation target.
- Franklin Templeton's Hasenstab: Fed hike to widen EM divergence.
- Fed rate hike should lift trading activity in 2016 -JPMorgan CFO.
Looking Ahead - Economic Data (GMT)
- 23:30 Australia Consumer Sentiment *Dec 3.9%-previous
- 00:30 Australia Housing Finance* Oct forecast -1%, 2%- previous
- 00:30 Australia Invest Housing Finance* Oct -8.5%- previous
- 23:50 Japan Machinery Orders MM* Oct forecast -1.5%, 7.5%- previous
- 23:50 Japan Machinery Orders YY*Oct forecast 1.4%, -1.7%- previous
- 01:30 China PPI YY Nov forecast -5.9%, -5.9%- previous
- 01:30 China CPI YY*Nov forecast 1.4%, 1.3%- previous
- 01:30 China CPI MM* Nov forecast -0.1%, -0.30%
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0830 levels and currently trading at 1.0893 levels. The pair has made session high at 1.0905 and hit lows at 1.0860 levels. Euro inched higher against dollar on Tuesday, as investors preferred euro as safe bet in the backdrop of falling oil prices which may impact inflation, which could have an impact on the Federal Reserve plans to raise the interest rate in December. The Federal Reserve is widely expected to hike rates for the first time in a decade later this month. Overall dollar was mixed on the day, as the dollar fell against safe haven currencies like the Japanese yen and Swiss Franc. The Euro briefly moved towards $1.09 levels in American afternoon trading, adding recovery from near 7 months low sparked by the European Central Bank's less than expected deposit interest rate cut on Thursday. The euro was last up 0.5 percent to $ 1.0887. To the upside, immediate resistance can be seen at 1.0931. To the downside, immediate support level is located at 1.0825levels.
GBP/USD is supported in the range of 1.4950 and currently trading at 1.5010 levels. It reached session high at 1.5013 and hit low at 1.4953 levels. Sterling slipped lower against dollar on Tuesday after UK manufacturing output fell unexpectedly in October, denting hopes the sector might soon help to drive the country's economy towards a more balanced recovery, data showed on Tuesday. Manufacturing output fell 0.4 percent on the month in October, against expectations for it to stagnate following a 0.9 percent surge in September, the Office for National Statistics said on Tuesday. Britain had the fastest-growing advanced economy in the world last year and is likely to be at the head of the pack again this year. But it has relied heavily on domestically focused services for growth, frustrating hopes for a better-balanced recovery. The currency's strongest level of the session was $1.5016, while its weakest level was $1.4953. To the upside, immediate resistance can be seen at 1.5015. To the downside, immediate support level is located at 1.4977 levels.
AUD/USD is supported around 0.7170 levels and currently trading at 0.7220 levels. It hit session high at 0.7228 and made session lows at 0.7186 levels. Australian dollar declined against US dollar on Tuesday as the oil prices continued to fall and the dollar strengthened against all major commodity exporting currencies Texas Intermediate and Brent Crude prices have fallen 4.7 percent and 3.7 percent respectively since the Organization of Petroleum Exporting Countries meeting at the weekend failed to cut production and instead removed the production ceiling of 30 million barrels per day. The Australian dollar is likely to fall further as the oil price is set to fall further in the coming days. . The currency's strongest level of the session was $0.7186, while its weakest level was $0.7229. To the upside, immediate resistance can be seen at 0.7229. To the downside, immediate support level is located at 0.7186 levels.
USD/CAD is supported at 1.3500 levels and is trading at 1.3576 levels. It has made session high at 1.3627 and lows at 1.3542 levels. Canadian dollar continued to decline against US dollar on Tuesday, as the slump in crude oil prices to 2009 levels raised the prospects that Canada's central bank may have to take precautionary measures. US crude price slipped to 37 $ per barrel for the first time since 2009 on fears the global oil producers will increase production in order to saturate the market. The Bank of Canada has cut interest rate twice this year to offset the decline oil price effect on Canadian dollar. In the past two weeks the loonie has traded between C$1.3280 and C$ 1.3621. The currencies strongest level of the session was C$1.3496, while it weakest level was C$1.3621. To the upside, immediate resistance can be seen at 1.3621. To the downside, immediate support level is located at 1.3545 levels.
Equities Recap
European shares closed lower on Tuesday after quarterly economic grown in the Eurozone registered only modest increase, and UK manufacturing output unexpectedly contracted.
UK's benchmark FTSE 100 closed down by 1.3 percent, the pan-European FTSEurofirst 300 ended the day down by 1.64 percent, Germany's Dax ended down by 1.9 percent, France's CAC finished the day down by 1.4 percent.
U.S. stocks were down in a choppy trading session on Tuesday as oil prices pressured energy materials stocks for a fifth day and weak Chinese trade data reignited some fears of a global economic slowdown.
Dow Jones closed down by 0.90 percent, S&P 500 ended down by 0.65 percent, Nasdaq finished the day down by 0.06 percent.
Treasuries Recap
U.S. Treasury debt yields edged higher on Tuesday in choppy trading after falling the previous two sessions, but sentiment remained cautious with the continued drop in oil prices, suggesting inflation would remain subdued.
U.S. benchmark 10-year Treasury notes were down 4/32 on the day to yield 2.241 percent, up from Monday's 2.234 percent.
The 30-year bond fell 15/32 in price to yield 2.974 percent, up from 2.962 percent on Monday.
U.S. 2-year Treasury notes, meanwhile, were little changed in price, with a yield of 0.947 percent, up from 0.935 percent on Monday.
Commodities Recap
Gold rose on Tuesday as the dollar receded slightly and stocks fell globally, though expectations that the U.S. Federal Reserve will raise interest rates next week kept gains in check.
Spot gold rose 0.3 percent to $1,073.18 an ounce at 2:42 p.m. EST (1942 GMT), while U.S. gold futures for February delivery settled up 10 cents at $1,075.30 an ounce.
Oil futures ended lower with Brent down over 1 percent on Tuesday after plumbing near seven-year lows on fears global oil producers will pump even more crude in battle for share in a saturated market.
Brent finished the session down 47 cents at $40.26 per barrel, after a session low at $39.81. WTI settled down 14 cents at $37.51, after sliding to $36.64 earlier.
