Market Roundup
- USD/JPY -0.35%, EUR/USD +0.37%, GBP/USD +0.55%
- DXY -0.3%, DAX +0.35%, Brent +1.0%, Iron +1.1%
- UK Nov RICS house price index +30, seven-month high, +26 eyed
- UK REC – Job vacancies, permanent vacancies-salaries, temp billings up
- UK PM on Brexit: "I want to see as smooth and orderly a process as possible FT interview
- President Mattarella's consultations with Italian political parties 1700GMT, due to end on Sat
- Italy demands more time from ECB to rescue Monte dei Paschi -FT
- Japan Q3 GDP revised +0.3% q/q, +1.3% AR, +0.6% and +2.4% eyed
- Japan to tell big companies to pay subcontractors in cash – Nikkei
- Japan’s Mizuho develops its own virtual currency – Nikkei
- RBNZ Gov Wheeler – OCR likely to remain at current level for some time
Economic Data Ahead
- (0745 ET/1245 GMT) The European Central Bank will announce its interest rate decision.
- (0815 ET/1315 GMT) Canadian Mortgage and Housing Corp is expected to report that housing starts for November slightly decreased at a seasonally adjusted annualized rate of 191,200, compared with 192,900 in October.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 10,000 to a seasonally adjusted 258,000 for the week ended Dec. 2 while continuing claims for the week ended Nov. 25 is expected to decline to 2.059 m from 2.081 m.
- (0830 ET/1330 GMT) The Statistics Canada is likely to report that building permits decreased 0.7 percent in October after declining 7 percent in September.
- (0830 ET/1330 GMT) Canada's releases industrial capacity utilization data for the third quarter. The indicator stood at 80.0 percent in the previous quarter.
- (0830 ET/1330 GMT) The Statistics Canada is likely to report that New Housing Price Index (NHPI) rose 0.2 percent in October after posting a similar gain in September.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending December 2.
- (1645 ET/2145 GMT) The Statistics New Zealand will release Electronic Card Retail Sales figures for the month of November. The index posted a rise of 0.6 percent in the previous month.
Key Events Ahead
- (0830 ET/1330 GMT) European Central Bank President releases the monetary policy statement and gives a press conference.
- (0945 ET/1445 GMT) FedTrade ops 15-yr F.Mae/Fr.Mac max $925 mln
- (1145 ET/1645 GMT) FedTrade ops 30-year Ginnie Mae (max $1.500 bln
FX Beat
DXY: The dollar eased versus its major peers as markets turned cautious ahead of central bank policy meeting outcomes. The greenback against a basket of currencies trades 0.1 percent down at 99.90, having hit a 3-week low of 99.84 earlier in the day. FxWirePro's Hourly Dollar Strength Index stood at -103.64 (Highly Bearish) by 1100 GMT.
EUR/USD: The euro rose to a 3-week high above the 1.0800 handle, as the greenback lost momentum following a drop in the U.S. bond yields from its recent peak, ahead of the European Central Bank policy decision. The ECB is widely expected to announce a six-month extension to its quantitative easing programme, aiming to boost weak inflation. Moreover, a solid rally in the German yields also strengthened the sentiment around the major. The European currency trades 0.4 percent up at 1.0795, having touched an early high of 1.0805, its highest since Nov. 15. FxWirePro's Hourly Euro Strength Index stood at 127.75 (Highly Bullish) by 1000 GMT. Markets attention will also remain on ECB President Draghi’s presser for next direction on the pair. Technically any close above 1.0850 will take the pair till 1.1000 level. On the lower side, major intraday support is around 1.0680 and indicative break below will drag it down till 1.0600/1.0550 level.
USD/JPY: The dollar declined, extending losses from the previous session amid persistent risk-off market sentiment. The major initially dropped to an intra-day low of 113.13, however, it recovered some ground after the Japan's final GDP for Q3 of 2016 was revised lower to show a growth of 0.3 percent as compared to forecast of 0.6 percent. Moreover, the major is likely to remain on the downside as investors refrain from taking big positions ahead of ECB policy meeting outcome. The pair trades 0.2 percent down at 113.50, attempting to regain the 114.00 handle. FxWirePro's Hourly Yen Strength Index stood at -48.28 (Neutral) by 1100 GMT. The major resistance is around 115 and break above targets 115.52 (161.8% retracement of 113.89 and112.05)/116. On the lower side minor support is around 113.09 (daily Tenekn-Sen) and any break below targets 112.65/112.
GBP/USD: Sterling gained, reversing almost all of its previous session losses, as renewed selling interest around the dollar across the board boosted the bid tone around the British currency. The major rose to an early high of 1.2704, retreating from a low of 1.2569 hit in the previous session, ahead of the ECB policy decision. Sterling trades 0.6 percent higher at 1.2694, hovering towards a high of 1.2774 hit on Tuesday, its highest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at -88.08 (Slightly Bearish) by 1100 GMT. The temporary top formed at 1.2775 (Dec 7 High) will be acting as major trend reversal level. Any break above will take the pair till 1.2800/1.2845. On the lower side, any break below 1.2600 will drag the pair down till 1.2550/1.2500. Against the euro, the pound trades 0.1 percent up at 85.00 pence, having hit a 7-day low of 85.49 pence the day before.
USD/CHF: The Swiss franc rose to a 3-week high against the dollar, as cautious tone ahead of European Central Bank policy decision triggered a fresh bout of risk- aversion. The major trades 0.2 percent down at 1.0044, having hit an early low of 1.0039, its lowest since Nov. 17. FxWirePro's Hourly Swiss Franc Strength Index stood at 24.22 (Neutral) by 1100 GMT. Any violation below 1.0045 will take the pair till 1.000/0.9958 (161.8% projection). It should break above the temporary top of 1.0205 for further bullishness. Any break above that level will take it till 1.02600/1.0300.
AUD/USD: The Australian dollar trimmed better-than-expected Chinese trade data-led gains, as a fresh bout of risk aversion ahead of ECB policy meet weighed on the Aussie. The major initially rallied to a 3-week high above the 0.7500 handle following the release of Chinese trade balance report, however, it lost its upside momentum as a higher-than-expected Australian trade deficit weakened investors sentiment. The pair trades 0.1 percent higher at 0.7490, after rising as high as 0.7507 earlier in the day, its strongest since Nov. 16. FxWirePro's Hourly Aussie Strength Index stood at 29.58 (Neutral) by 1100 GMT. On the higher side, major resistance is around 0.7500 (29th Nov high) and any break above will take the pair till 0.7580/0.7635. The major support is around 0.7380 and break below will drag the pair till 0.7350/0.7300.
NZD/USD: The New Zealand dollar rose to a near 4-week high above the 0.7200 handle, after Reserve Bank Governor Graeme Wheeler's comments added to speculation that the bank would hike interest rates next year. Moreover, news that Finance Minister Bill English was likely to be the country's next Prime Minister, following the resignation of John Key on Monday supported the major. The Kiwi trades 0.6 percent higher at 0.7205, having hit an early high of 0.7222, its strongest since Nov 11. FxWirePro's Hourly Kiwi Strength Index was at 70.94 (Bullish) by 1100 GMT. Immediate resistance is located at 0.7235 (61.8% retracement of 0.6970 and 0.7399), a break above could take it near 0.7300. On the downside, support is seen at 0.7134 (7-EMA), a break below could drag it till 0.7100.
Equities Recap
European shares traded in a volatile market as investors refrained from placing big bets ahead of the European Central Bank's policy meeting outcome, where it is expected to extend its stimulus programme.
The pan-European STOXX 600 index increased 0.02 percent at 347.78 points, while the FTSEurofirst 300 index shed 0.02 percent at 1,373.42 points.
Britain's FTSE 100 trades 0.09 percent down at 6,896.66 points, while mid-cap FTSE 250 soared 0.13 percent at 17,648.96 points.
Germany's DAX rose 0.2 percent at 11,009.11 points; France's CAC 40 trades 0.02 percent lower at 4,693.39 points.
Tokyo's Nikkei gained 1.45 percent to 18,765.47 points, Australia's S&P/ASX 200 index rose 1.23 percent to 5,545.50 points and South Korea's KOSPI advanced 1.97 percent at 2,031.07 points.
Shanghai composite index declined 0.2 percent at 3,215.37 points, while CSI300 index fell 0.2 percent at 3,470.14 points. Hong Kong’s Hang Seng added 0.27 percent at 22,861.84 points.
Commodities Recap
Crude oil prices steadied after declining in the previous three straight sessions on doubts that proposed OPEC production cuts would be sufficient to balance the market. International benchmark Brent crude was 0.45 percent up at $53.24 per barrel by 0946 GMT, having hit a 1-week low of $52.79 earlier in the session. U.S. West Texas Intermediate crude rose 0.4 percent at $50.02 a barrel, after declining to an early low of $49.59, its lowest since Dec. 1.
Gold nudged up, as the dollar declined across the board, while investors cautiously awaited the European Central Bank policy meeting outcome. Spot gold inched higher 0.15 percent to $1,175.36 an ounce by 0952 GMT, however, within the sight of a low of $1,156.97 an ounce hit on Monday, its lowest since Feb. 5. U.S. gold futures were up 0.1 percent at $1,178.5 an ounce.
Treasuries Recap
The U.S. Treasuries were pushed lower across the curve ahead of the jobless claims data. The yield on the benchmark 10-year Treasury note rose 2-1/2 basis points to 2.37 percent, the yield on long-term 30-year Treasury also climbed 3 basis points to 3.05 percent and the yield on short-term 2-year note bounced 1-1/2 basis points to 1.11 percent.
The UK gilts slumped as investors moved away from safe-haven buying amid gains in crude oil prices and the recovery in the equities market. Also, investors await the European Central Bank (ECB) monetary policy decision later in the day. The yield on the benchmark 10-year gilts rose 2-1/2 basis points to 1.38 percent, the super-long 40-year bond yield climbed 3 basis points to 1.85 percent and the yield on short-term 2-year bounced 1-1/2 basis points to 0.12 percent.
The German bunds traded nearly flat as investors await the European Central Bank (ECB) monetary policy meeting decision later in the day. The yield on the benchmark 10-year bond, which moves inversely to its price, hovered around 0.34 percent mark, the yield on long-term 30-year note remained steady at 1.02 percent and the yield on short-term 2-year bond stood flat at -0.67 percent.
The Japanese government bonds traded narrowly mixed as investors await the two of the world’s largest central banks’ monetary policy decisions. The benchmark 10-year bond yield rose 1/2 basis point to 0.041 percent, the yield on long-term 30-year note remained steady at 0.63 percent and the yield on short-term 3-year note climbed 1/2 basis point to -0.15 percent.
The New Zealand government bonds closed modestly higher on Thursday, succumbing to thin trading activity during a relatively quiet session that witnessed data of little significance. The yield on the benchmark 10-year bond, which moves inversely to its price, closed 1 basis point lower at 3.19 percent, the yield on 7-year note ended down nearly 1 basis point to 2.79 percent and the yield on short-term 2-year note fell 1 basis point to 2.14 percent.
The Australian government bonds gained after recent data showed that the country’s trade deficit widened in October. Also, investors await the next week’s FOMC final monetary policy decision for 2016. The yield on the benchmark 10-year Treasury note fell 5 basis points to 2.75 percent, the yield on 15-year note dipped 6 basis points to 3.20 percent and the yield on short-term 2-year slid 1-1/2 basis points to 1.82 percent.
