Market Roundup
- Oil and high yield markets remain top focus.
- BoE's Shafik: Will learn from Fed; need sustained wage growth before hike.
- Fed weighs merits of jumbo portfolio in post-crisis era.
- Polish rate-setter Osiatynski opposes further rate cuts.
- Turkey Davutoglu says debate about central bank independence 'overblown'.
- Canada's Morneau: not going to jeopardize balanced budget goal.
- POLL-Wall St expects single-digit S&P 500 gain in 2016.
- Germany plans to borrow more in 2016, government sources say.
Looking Ahead - Economic Data (GMT)
- 00:30 Australia RBA Meeting Minutes
- 00:30 Australia Q3 Home Price Index 2.0% v 4.7%
- 00:30 Australia Nov New Motor Vehicle Sales -3.60% previous
Looking Ahead - Events, Other Releases (GMT)
- No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0930 levels and currently trading at 1.0993 levels. The pair has made session high at 1.1042 and hit lows at 1.0968 levels. The Euro edged higher against dollar on Monday amid a short buying sparked by market volatility concerns ahead of Federal Reserve rate hike decision on Wednesday. Euro inched higher towards 1.1045 from 1.0948 levels but declined slightly in the late US session giving up some of the earlier gains to trade around 1.0991 levels. Trading was subdued during Monday's US session, with the dollar moving in tight ranges against most rivals. Tomorrow from the euro zone, German ZEW Economic Sentiment fallowed by Core CPI data from the US market is set to be released. But Tuesday's figures are likely to have less impact on the market as investors continue to focus their attention on FOMC statement scheduled on Wednesday which may turn up be first rate hike in nine years. The euro gained 0.2 percent versus the dollar on Monday. To the upside, immediate resistance can be seen at 1.0000. To the downside, immediate support level is located at 1.0941 levels.
GBP/USD is supported in the range of 1.5100 and currently trading at 1.5135 levels. It reached session high at 1.5160 and hit low at 1.5116 levels. Sterling slipped sharply lower against dollar on Monday, after signs started to emerge from UK government that, it may not get its way in talks with European partners before next year's vote on leaving the EU adding to political nerves going into of England Deputy Governor Minouche Shafik also sounded to analysts to be in no great hurry to raise interest rates in a speech in London that banged home the message from last week's policy meeting of no change soon. That offered the pound no support in a month which has seen a number of banks predict the debate over a European Union "Brexit" will make it one of the losers among major currencies in the months ahead. Sterling, which has suffered in the past month from investors beginning to bet on volatility, or simply losses, as the EU debate heats up next year, fell more than 1 percent, briefly reaching as low as 73.01 pence per euro. It lost just over half a percent to $1.5130 against the dollar. To the upside, immediate resistance can be seen at 1.5200. To the downside, immediate support level is located at 1.5180 levels.
USD/JPY is supported around 120.50 levels and currently trading at 120.95 levels. It hit session high at 120.95 and made session lows at 120.33 levels. The dollar edged slightly higher against Japanese Yen on Monday during choppy trading, paring Friday's losses, as traders keenly await possibly the first interest rate increase by the Federal Reserve in 9 years on Wednesday. The Fed's policy setting group, the Federal Open Market Committee, will begin a two-day meeting on Tuesday and is expected by investors to raise rates from near zero. Investors have remained on the sidelines in anticipation of a rate increase by Federal Reserve. Higher rates will boost dollar bulls against Japanese yen. The risk selloff pushed the dollar lower against the Japanese yen on Friday , which moved below 121 for the first time since early November. The currency's strongest level of the session was $120.60, while its weakest was at $120.55. To the upside, immediate resistance can be seen at 120.85. To the downside, immediate support level is located at 120.62 levels.
USD/CAD is supported at 1.3628 levels and is trading at 1.3705 levels. It has made session high at 1.3522 and lows at 1.3502 levels. The greenback edged higher against Canadian dollar on Monday, as the dollar broadly remained stronger against Canadian Dollar, as market is keenly awaiting for Wednesdays FOMC statement for Federal Reserve to hike interest rate. The pair initially slipped towards 1.3678 levels after the US market opened but subsequently recovered the losses to trade around 1.3724 levels. U.S. crude rose nearly 2 percent Monday, recovering slightly but moving in the range of 11-year lows, but analysts believe it is premature to write of the market that it has bottomed. U.S. stocks were up slightly in the American afternoon session, rebounding from last week's low with help from a reversal in oil prices, which settled higher in Monday's session. The currency's strongest level of the session was C$1.3678, while at its low it hit its weakest since June 2004 at C$1.3758. To the upside, immediate resistance can be seen at 1.3752. To the downside, immediate support level is located at 1.3720 levels.
Equities Recap
European shares fell to a 2 1/2-month low on Monday as Brent crude oil prices dropped to their lowest since 2008.
UK's benchmark FTSE 100 closed down by 1.3 percent, the pan-European FTSEurofirst 300 ended the day down by 1.79 percent, Germany's Dax ended down by 1.8 percent, France's CAC finished the day down by 1.6 percent.
U.S. stocks closed marginally higher on Monday, rebounding from last week's slump with help from a reversal in oil prices, which settled higher in Monday's session.
Dow Jones closed up by 0.62 percent, S&P 500 ended up by 0.48 percent, Nasdaq finished the day up by 0.38 percent.
Treasuries Recap
Prices on U.S. Treasuries fell on Monday during choppy trading, paring Friday's gains, as traders await possibly the first interest rate increase by the Federal Reserve in nine years later this week.
U.S. 10-year notes fell 15/32 in price to yield 2.193 percent, up from 2.13 percent late on Friday. The 10-year yield dropped to a five-week low on Friday and posted its largest one-day fall since July.
The 30-year bond fell 1-02/32 in price to yield 2.93 percent, up from 2.877 percent on late Friday. The 30-year bon yield slid to a six-week low on Friday.
Commodities Recap
Gold fell 1 percent on Monday ahead of a Federal Reserve policy meeting this week, which is expected to announce the first interest rate rise in nearly a decade.
Spot gold eased 0.8 percent to $1,065.10 an ounce at 2:56 p.m. EST (1956 GMT), while U.S. gold futures for February delivery settled 1.1 percent lower at $1,063.40 an ounce.
U.S. crude rose nearly 2 percent Monday, recovering slightly after moving within a hair of 11-year lows, but analysts and traders said it is still too early to declare the market has reached its bottom.
Brent futures for January delivery settled down 1 cent at $37.92 a barrel. U.S. crude rose 69 cents, or 1.94 percent, to $36.31.
