Market Roundup
•US Redbook (YoY): 7.4%, 4.9% previous
•US JOLTS Job Openings (Oct): 7.744M, 7.510M forecast, 7.372M previous
•US IBD/TIPP Economic Optimism (Dec): 54.0, 54.1 forecast, 53.2 previous
Looking Ahead Economic Data(GMT)
•Australia AIG Construction Index (Nov) -40.9 previous
•Australia AIG Manufacturing Index (Nov) 19.7 previous
•Australia Services PMI (Nov) 49.6 forecast, 51.0 previous
Looking Ahead Events And Other Releases(GMT)
• 00:00 New Zealand ANZ Commodity Price Index (MoM): 1.4% previous
•00:30 Australia GDP (QoQ) (Q3): 0.5% forecast, 0.2% previous
•00:30 Australia GDP (YoY) (Q3): 1.1% forecast, 1.0% previous
•00:30 Australia GDP Capital Expenditure (Q3): -0.1% previous
•00:30 Australia GDP Chain Price Index (Q3): -0.9% previous
•00:30 Australia GDP Final Consumption (Q3): 0.3% previous
•00:30 Japan Services PMI (Nov): 50.2 forecast, 49.7 previous
Currency Summaries
EUR/USD: The euro traded mostly flat on Tuesday, unable to capitalize fully on rising expectations of a Fed rate cut, as French political uncertainty and broader geopolitical tensions took precedence over U.S. monetary policy. Fed Governor Waller indicated he is leaning toward supporting a rate cut in December, noting that while policy remains restrictive, upcoming U.S. jobs, inflation, and spending data could still influence his decision. U.S. rate markets have increased the likelihood of a cut, with CME's FedWatch tool now showing a 72% chance of a 25bps cut on December 18, up from 61% on Monday and 59% a week ago. Over the past month, the euro has lost 3% against the dollar and more than 1% against both the pound and Swiss franc . The euro zone GDP, retail sales and PMI data will likely set the market tone through the remainder of the week. Immediate resistance can be seen at 1.0506(SMA 9), an upside break can trigger rise towards 1.0568(38.2%fib).On the downside, immediate support is seen at 1.0478(23.6%fib), a break below could take the pair towards 1.0358(Lower BB)
GBP/USD: Sterling gained against the dollar on Tuesday as dollar fell broadly amid lower Treasury 2-year yields following Fed comments about slowing inflation and a mixed U.S. JOLTS report. U.S. job openings increased undefined solidly in October and layoffs were down though employers are seen as hesitant to hire more workers.Meanwhile, British retailers reported lacklustre sales in November, according to industry data that, while affected by the timing of Black Friday sales, still pointed to weakening consumer confidence.The Bank of England is widely seen holding interest rates later in December due to concerns about resurgent inflation, according poll of economists. The pound was last up 0.16% at $1.2672, recovering some of Monday's 0.7% loss. In the last three months.Immediate resistance can be seen at 1.2735(50%fib), an upside break can trigger rise towards 1.2789 (SMA 30).On the downside, immediate support is seen at 1.2629(38.2%fib), a break below could take the pair towards 1.2507(23.6%fib)
USD/CAD: The Canadian dollar edged lower against the U.S. dollar on Tuesday and saw larger declines against other major currencies, as political uncertainty in South Korea dampened investor sentiment. As a major commodity producer, including oil, the Canadian dollar is highly sensitive to shifts in market mood. Canada's November employment report, due Friday, could influence expectations for further rate cuts by the Bank of Canada, with economists forecasting a gain of 25,000 jobs. The loonie weakened 0.1% to 1.4060 per U.S. dollar, after fluctuating between 1.4011 and 1.4075. It was the only G10 currency to lose ground against the greenback, while the euro rebounded slightly from Monday's sharp decline, driven by political turmoil in France. Immediate resistance can be seen at 1.4081 (23.6%fib), an upside break can trigger rise towards 1.4111(Higher BB).On the downside, immediate support is seen at 1.3969(38.2%fib), a break below could take the pair towards 1.3878(50%fib).
USD/JPY :The dollar stayed close to a seven-week low against yen, fuelled by rising anticipation that the Bank of Japan (BOJ) will shortly hike interest rates. Over the weekend, BOJ Governor Kazuo Ueda signaled that rate hikes were coming, citing favorable economic statistics, especially Tokyo's October inflation figures. The yen, the only G10 currency to increase versus the dollar last month, reached 149.09 on Monday, its highest level since late October. Markets currently forecast a 56% chance that the BOJ will raise interest rates by 0.25% to 0.5% at its policy meeting on December 18-19. Investors will pay close attention to the U.S. monthly employment report on Friday. They also are keen to see other data this week, including a November reading of private payrolls and the Institute for Supply Management's services report. Immediate resistance can be seen at 150.15 (38.2%fib) an upside break can trigger rise towards 150.97 (50%fib). On the downside, immediate support is seen at 149.07(50%fib) a break below could take the pair towards 148.41(Lower BB).
Equities Recap
European stocks closed at a one-month high on Tuesday, with Germany's DAX briefly hitting the 20,000 mark for the first time. Investors were closely watching France's political turmoil, as the government teetered on the brink of collapse.
UK's benchmark FTSE 100 closed up by 0.56 percent, Germany's Dax ended up by 0.42 percent, France’s CAC finished the day up by 0.26 percent.
The S&P 500 and Nasdaq eked out record closing highs on Tuesday, with tech-related shares extending recent gains as investors awaited further jobs data.
Dow Jones closed down by 0.17% percent, S&P 500 closed up by 0.05% percent, Nasdaq settled up by 0.39% percent.
Commodities Recap
Oil prices rose more than 2% on Tuesday as Israel threatened to attack the Lebanese state if its truce with Hezbollah collapses, and as investors positioned for OPEC+ to announce an extension of supply cuts this week.
Brent crude futures posted their biggest gains in two weeks, rising by $1.79, or 2.5%, to settle at $73.62 a barrel. U.S. West Texas Intermediate crude futures also rose the most since Nov. 18, gaining $1.84, or 2.7%, to close at $69.94 per barrel..
Gold prices trimmed gains on Tuesday after strong U.S. jobs data hinted at a cautious approach to rate cuts by the Federal Reserve, while a softer dollar and easing Treasury yields capped losses as markets awaited further economic cues.
Spot gold edged up 0.2% at $2,644.05 per ounce, as of 01:42 p.m. ET (1842 GMT). Prices were up as much as 0.7% before the U.S. job openings data. U.S. gold futures settled 0.4% higher at $2,667.90.
