Market Roundup
- U.S. home prices up in December, but short of expectations (Case-Shiller).
- U.S. existing home sales rise to six-month high, +0.4% to annual rate 5.47 million units.
- Weak consumer confidence, 92.2 vs 97 forecast, clouds outlook.
- Fall in business morale deepens concern about German economy, IFO lowest in more than a year.
- Canada's Morneau mon policy not having same impact as in previous time.
- Iran oil minister says output freeze plan is 'laughable' -ISNA agency.
- Fed's Kashkari expects moderate U.S. growth, inflation to rise.
- Mexico's central bank sold USD2 bn in direct dollar sales last week.
- SNB's Jordan: will intervene when necessary, franc overvalued. BHP expects copper market to remain in surplus until end of decade.
- British business bosses (BT/M&S/BP/Shell) say exit from EU would hit economy & jobs.
Looking Ahead - Economic Data (GMT)
- 00:30 Australia Construction Work Done*Q4 forecast -2%, -3.6%previous
- 00:30 Australia Wage Price Index QQ*Q4 forecast 0.6%, 0.6%-previous 00:30
- Australia Wage Price Index YY* Q4 forecast 2.3%, 2.3%-previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events.
Currency Summaries
EUR/USD is likely to find support at 1.1000 levels and currently trading at 1.1018 levels. The pair has made session high at 1.1036 and hit lows at 1.0994 levels. The dollar traded higher against euro Tuesday as the dollar gained ground across the board amid renewed fears of a Brexit. Data on Tuesday gave a mixed picture on the U.S. economy. The euro was little changed against the dollar, falling below $1.10 for the first time in three weeks, after a key index on German business climate fell sharply, raising worries about Europe's largest economy. On the data front housing report showed that U.S. home resales unexpectedly rose in January, reaching a six-month high. But the economic outlook was tempered by a fall in consumer confidence this month amid a stock market rout.
GBP/USD is supported in the range of 1.4000 and currently trading at 1.4021 levels. It reached session high at 1.4122 and hit low at 1.4006 levels. Sterling slipped sharply to hit seven-year low against the dollar on Tuesday as concerns that Britons would vote to leave the European Union at a June referendum dragged sterling down towards $1.40 and drove it to a fresh seven-year low on Tuesday. Sterling fell almost 1 percent on Tuesday to as low as $1.4017, its weakest since March 2009. Against the euro, the pound weakened by half a percent to 78.33 pence. And it stayed close to an almost-two-year low against a trade-weighted currency basket.
USD/JPY is supported around 111.60 levels and currently trading at 120.03 levels. It hit session high at 120.22 and made session lows at 111.93 levels. Japanese yen surged higher against US dollar on Tuesday as a recent rebound in stocks and crude oil faded, reviving demand for both safe-haven currencies. Comments from Bank of Japan Governor Haruhiko Kuroda on Tuesday also helped the yen's cause. Kuroda said accelerating the pace of money printing alone would not boost expectations of future price rises and acknowledged the limits of what monetary policy can do to revive growth. In late morning trading, the dollar fell 0.8 percent to 112.02, dropping as low as 111.78 yen, the lowest since Feb. 11. The euro, meanwhile, touched 123.13 yen its lowest since April 2013. It was last at 123.57, down 0.8 percent.
USD/CAD is supported at 1.3740 levels and is trading at 1.3794 levels. It has made session high at 1.3819 and lows at 1.3735 levels. The Canadian dollar lost ground against US dollar on Tuesday as oil prices fell giving some of the gains made yesterday. Oil prices gave up gains over concerns that production freeze may not have any impact on over supply of crude oil in the market. Canada's Liberal government said on Monday it will stick to plans to invest in infrastructure projects even as it warned it would run much bigger budget deficits than previously anticipated. Canadian government bond prices were lower across the maturity curve in sympathy with U.S. Treasuries. The two-year price fell 4.5 Canadian cents to yield 0.475 percent and the benchmark 10-year was down 43 Canadian cents to yield 1.17 percent.
Equities Recap
European shares fell Tuesday on falling oil prices and disappointing updates from Standard Chartered and M&A expectations boosted shares in exchange operators.
Britain's blue-chip FTSE 100 index closed down by 1.3 percent, France's benchmark CAC-40 index closed down by 1.35 percent, Germany's DAX ended down 1.49 percent, meanwhile the pan-European Eurofirst 300 index was down by 1.33 percent.
US stocks slipped lower on Tuesday as fresh bout of selling swept through Wall Street in the wake of a sharp slide in oil prices, snapping yet another rally in what has been a volatile year for financial markets.
Dow Jones closed down by 1.14 percent, S&P 500 ended up by 1.25 percent, Nasdaq finished the day down by 1.48 percent.Treasuries Recap
U.S. Treasury yields fell on Tuesday after Saudi Oil Minister Ali Al-Naimi effectively ruled out production cuts by major crude producers anytime soon, sending oil and stock prices lower.
Benchmark 10-year notes rose 6/32 in price to yield 1.75 percent, down from 1.76 percent late Monday.
Commodities Recap
Spot gold was up 1.15 percent at $1,223.40 an ounce by 3:10 p.m. EST (2010 GMT). Prices had fallen 1.6 percent on Monday, when the dollar and equities rallied.
U.S. gold futures for April delivery settled up 1 percent at $1,222.60.
Oil prices fell 4 percent on Tuesday after Saudi Oil Minister Ali Al-Naimi ruled out any production cuts, restating the kingdom's rationale for maintaining output was that demand would absorb excess crude that has crushed prices over the past 20 months.
Benchmark Brent crude futures settled down $1.42, or 4 percent, at $33.27 a barrel, while U.S. crude futures fell $1.52, or 4.6 percent, to $31.87 a barrel.
