Market Roundup
• Brexit could be delayed for two years, Supreme Court judge warns (Sky News).
• Strong Oct US retail sales +0.8 v 0.6% forecast, reinforce December rate hike; Retail control +0.8% v 0.3% forecast.
• Fed’s Fischer: not concerned U.S. markets lack liquidity.
• Fed’s Kaplan: Global headwinds to inflation may be shifting, sooner the better on rate hikes (DJ).
• Fed's Rosengren: Washington stimulus would bring more rate hikes.
• Fed’s Tarullo: Fed to carefully watch the market reaction to Trump administration.
• Atlanta Fed’s GDPNow forecast for Q4 rises 0.2% to 3.3% from 3.1% Nov 4.
• New Zealand's Fonterra Dairy prices +4.5% w/avg selling price NZD 3,519/tonne, volumes drop 13.8%.
• Canada’s FinMin: working together w/US & Mexico will get to conclusion that is mutually advantageous.
• ECB’s Villeroy: Making progress on reaching inflation target.
• UK core/headline CPI dip unexpectedly but BoE warns weak GBP effect yet to come, factory orders rise.
• Britain's Brexit plan? There is no plan- leaked memo; May spokesman: memo was unsolicited work of Deloitte.
• BoE's Carney: attacks on central bankers are "massive" blame game (reacts to CB criticisms by Trump).
• Oil prices jump 5.9% on hopes of OPEC output cut.
Looking Ahead - Economic Data (GMT)
• 00:30 Australia Wage Price Index QQ* Q3 forecast 0.5%, 0.5%-previous
• 00:30 Australia Wage Price Index YY* Q3 forecast 2%, 2.1%- previous
• 02:00 NZ RBNZ Offshore Holdings* Oct 61.9%- previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is supported at 1.0700 levels and currently trading at 1.0723 levels. The pair has made session high at 1.0752 and hit lows at 1.0712 levels. The euro declined against the dollar on Tuesday as dollar gained strength after a surprisingly large gain in October U.S. retail sales lifted bond yields to 10-month peaks and supported the outlook for an interest rate increase next month. An early tapering of the surge in U.S. yields tied to President-elect Donald Trump's election win spurred traders to scale back their dollar holdings. But the greenback pared its losses after the release of retail sales figures revived selling in bonds. U.S. retail sales rose more than expected in October as households bought motor vehicles and a range of other goods, pointing to sustained economic strength that could allow the Federal Reserve to raise interest rates next month. The euro, which hit an 11-month low of $1.0709 on Monday, rebounded to $1.0816 before easing to trade at $1.0724, down 0.2 percent on the day. At around 1230 GMT, FxWirePro's Hourly EUR Strength Index stood at -74.1816 (slightly bearish). For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
GBP/USD is supported in the range of 1.2352 levels and currently trading at 1.2451 levels. It reached session high at 1.2513 and dropped to session low at 1.2375 levels. Sterling declined against dollar on Tuesday as sterling was pressured by media reports which refocused traders' attention on the political risks associated with Britain's departure from the European Union. The immediate trigger for the losses was a leaked memo suggesting that Britain has no overall plan for Brexit and may take six months to agree one due to divisions in Prime Minister Theresa May's government. A rout on bond markets and a surge in concern over elections in major European countries next year have sent the dollar soaring against the euro in the past week and offered cover to any who wanted to cash in gains built up by betting on the pound's collapse since June.But ahead of the formal launch of exit talks with Brussels early next year, sterling remains among a "sell" for many speculative and long-term players. At around 1230 GMT, FxWirePro's Hourly USD Strength Index stood at 112 (highly bullish). For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex .
USD/CAD is likely to find support at 1.3405 levels and is trading at 1.3457 levels. It has made intraday high at 1.3562 and lows at 1.3448 levels. The Canadian dollar strengthened against its U.S. counterpart on Tuesday as U.S. crude oil prices rose with the loonie posting gains for the first time since the U.S. election last week. Oil prices bounced back from multi-month lows on expectations that OPEC will agree later this month to cut production to reduce a supply glut. U.S. crude prices were up 3.16 percent to $44.69 a barrel. On the data front, Canadian home prices rose in October as continued strength in Ontario, the most populous province, offset the first decline in Vancouver in almost two years, the Teranet-National Bank Composite House Price Index showed. The Canadian dollar has given up almost 50 percent of its gains from January to May. The 50 percent retracement at C$1.3575 is a level being watched by analysts. It is seen as a point for the market to pause and reassess the outlook for the currency. At around 1200 GMT, FxWirePro's Hourly CAD Strength Index stood at 103 (highly bullish). For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
USD/JPY is supported around 108.56 levels and currently trading at 109.24 levels. It peaked to hit session high at 109.34 and made session lows at 108.63 levels. The U.S. dollar rose sharply against the yen on Tuesday as demand for greenback increased after data showed U.S. retail sales rose more than expected in October, pointing to sustained economic strength that could allow the Federal Reserve to raise interest rates next month. The dollar's recent rally was in step with the surge in U.S. yields as Trump's victory a week ago led traders to pile on bets he and a Republican-controlled Congress would embark on tax cuts and federal spending to boost the economy. The U.S. dollar index held above the 100 level and touched a fresh 11-month high, and Treasuries prices were little changed with yields near multi-month highs. At around 1230 GMT, FxWirePro's Hourly JPY Strength Index stood at 115 (highly bullish).For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
Equities Recap
European shares edged up on Tuesday helped by a surge in crude oil prices and a rebound in utilities, while telecoms equipment maker Nokia slumped on a disappointing earnings outlook update.
UK's benchmark FTSE 100 closed up by 0.6 percent, the pan-European FTSEurofirst 300 ended the day up by 0.33 percent, Germany's Dax ended up by 0.5 percent, France’s CAC finished the day up by 0.7 percent.
U.S. stocks rose on Tuesday, with the Dow registering its fourth consecutive record high close as tech stocks rebounded from a post-election battering and energy stocks were boosted by a sharp rise in oil prices.
Dow Jones closed up by 0.29 percent, S&P 500 ended down up 0.75 percent, Nasdaq finished the day up by 1.10 percent.
Treasuries Recap
U.S. 30-year Treasury bond prices rose on Tuesday, after falling five straight sessions as investors took a breather selling government debt in the wake of a higher inflation outlook under the administration of President-elect Donald Trump.
Roughly a week after Trump's victory, the 30-year Treasury bond, the security most sensitive to inflation expectations, had surged above 3 percent on Monday for the first time since December.
Commodities Recap
Oil prices jumped 6 percent on Tuesday, with U.S. crude notching its biggest daily percentage gain in seven months, on renewed expectations that OPEC will agree later this month to reduce a global supply glut.
U.S. crude ended the session $2.49 higher at $45.81 per barrel, a 5.8 percent gain, its biggest daily percentage increase since early April.
Brent futures settled at $46.95 a barrel, up $2.52, or 5.7 percent, its biggest percentage gain since Sept. 28.
Gold edged higher on Tuesday, snapping a three-session losing streak, on uncertainty over the economic policies of U.S. President-elect Donald Trump.
Spot gold was up 0.29 percent at $1,223.41 an ounce at 2:33 p.m. EST (1933 GMT), after slipping on Monday to its lowest since June 3 at $1,211.08.U.S. gold futures settled up 0.2 percent at $1,224.50.
