Posted at 12 December 2019 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index consolidated near a 4-month low ahead of Sunday’s deadline for a new round of U.S. tariffs on China. On Wednesday, Fed Chairman Jerome Powell said the economic outlook for the U.S. was favorable as the central bank announced its decision to hold rates steady, as expected. The greenback against a basket of currencies traded 0.1 percent up at 97.20, having touched a low of 97.04 earlier, its lowest since August 9.
EUR/USD: The euro gained as investors awaited the European Central Bank policy meeting decision. The ECB is expected to keep its policy unchanged but markets attention will remain on central bank chief Christine Lagarde’s remarks on broader policy revamp. The European currency traded 0.05 percent up at 1.1135, having touched a high of 1.1144 earlier, its highest since November 4. Immediate resistance is located at 1.1156, a break above targets 1.1179. On the downside, support is seen at 1.1114, a break below could drag it below 1.1106.
USD/JPY: The dollar surged as U.S. President Donald Trump is expected to meet top advisers about the tariffs and their December 15 introduction on nearly $160 billion of Chinese consumer goods. The major was trading 0.1 percent up at 108.64, having hit a low of 108.42 on Monday, its lowest since Nov 21. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. producer price index and unemployment benefits claims. Immediate resistance is located at 108.99, a break above targets 109.20. On the downside, support is seen at 108.34, a break below could take it near at 108.18.
GBP/USD: Sterling steadied after rallying to an over 8-month peak earlier in the session as investors awaited the outcome of a general election in Britain that may decide the future of Brexit. The major traded flat at 1.3198, having hit a high of 1.3229 earlier, it’s highest since March 27. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3246, a break above could take it near 1.3272. On the downside, support is seen at 1.3155, a break below targets 1.3100. Against the euro, the pound was trading flat at 84.33 pence, having hit a high of 83.92 on Monday, it’s highest since May 2017.
USD/CHF: The Swiss franc rose to a 3-month peak as investors cautiously awaited threatened new tariffs on Chinese goods this weekend. Earlier in the day, the Swiss National Bank held to its ultra-expansive monetary policy, indicating that its negative interest rates would remain in place for the foreseeable future. The major trades 0.1 percent down at 0.9822, having touched a low of 0.9810 earlier, it’s lowest since September 5. On the higher side, near-term resistance is around 0.9863 (5-DMA) and any break above will take the pair to the next level till 0.9896 (10-DMA). The near-term support is around 0.9798, and any close below that level will drag it till 0.9775.
Equities Recap
European shares advanced as investors awaited comments from new European Central Bank chief Christine Lagarde.
The pan-European STOXX 600 index surged 0.3 percent at 407.52 points, while the FTSEurofirst 300 rallied 0.1 percent to 1,588.72 points.
Britain's FTSE 100 trades 0.4 percent up at 7,245.82 points, while mid-cap FTSE 250 gained 0.1 to 20,659.62 points.
Germany's DAX surged 0.3 percent at 13,185.82 points; France's CAC 40 trades 0.3 percent higher at 5,877.74 points.
Commodities Recap
Crude oil prices edged higher as OPEC forecast a supply deficit next year, however, data showing a surprise increase in U.S. crude inventories capped gains. International benchmark Brent crude was trading 0.7 percent up at $64.31 per barrel by 1022 GMT, having hit a low of $63.00 on Wednesday, its lowest since December 6. U.S. West Texas Intermediate was trading 0.6 percent up at $59.12 a barrel, after falling as low as $58.09 on Wednesday, its lowest since December 6.
Gold prices consolidated within narrow ranges as investors awaited threatened new tariffs on Chinese goods this weekend. Spot gold traded flat at $1,474.56 an ounce by 1025 GMT, having touched a high of $1478.81 on Wednesday, its highest since December 6. U.S. gold futures were up 0.2 percent at $1,477.50.
Treasuries Recap
The yield on U.S. benchmark 10-year Treasury notes rose to 1.7966 percent.
The German benchmark Bund yield briefly touched a 1-week low at -0.325 percent ahead of an ECB meeting,
The Japanese government bond prices surged, with the March 10-year JGB futures rising 0.28 point to 152.37. The 10-year JGB yield fell 1.5 basis points to minus 0.020 percent, off nine-month high of zero percent touched earlier this week. The 20-year JGB yield fell 0.5 basis point to 0.290 percent, while the 30-year JGB yield was flat at 0.430 percent. The two-year JGB yield fell 2 basis points to minus 0.130 percent. The five-year yield fell 2.5 basis points to minus 0.125 percent.
The Australian yields lagged, narrowing the gap between 10-year yields to 64 basis points from 71 basis points a day ago. The three-year bond futures were off 0.5 ticks on Wednesday at 99.275.