Market Roundup
- Shares tumble amid risk aversion; oil price hits 7-yr low, China yuan drop.
- Onshore yuan rates hit 4-yr low, dollar and euro steadier.
- US consumer spending gauge rises strongly in November, RS ex-autos/gas +0.6% v 0.2% in Oct.
- US producer prices increase, but trend still weak y/y PPI final demand -1.1 vs -1.6% in Oct.
- US Oct business inventories unchanged, US retail inventories excluding autos rise in Oct.
- University of Michigan cons sentiment Dec 91.8 v 91.3 Nov final, Credit conditions Dec 107 v 103.5 forecast.
- ECB’s Praet: policy working will push up inflation, continue to contribute to recovery.
- ECB’s Coeure: emerging market slowdown a top risk for euro zone.
- UST prices climb in safe-haven bid as oil, stocks drop.
- Gold rebounds on dollar, still set for weekly fall; spot silver falls to lowest price since August 2009.
- Latin American currencies fall on China, oil; Mexican peso hits record low.
Looking Ahead – Economic Data (GMT)
- Sat 05:30 China Urban inv (ytd)yy* Nov forecast 10.1%, 10.2%-previous Sat
- 05:30 China Industrial Output YY*Nov forecast 5.6%, 5.6%-previous
- Sat 05:30 China Retail Sales YY*Nov forecast 11.1%, 11%- previous
- 23:50 Japan Tankan Big Mfg Index Q4 forecast 11, 12- previous
- 23:50 Japan Tankan Big Mfg Outlook DI Q4 forecast 11, 10- previous
- 23:50 Japan Tankan Big Non-Mfg Index Q4 forecast 23, 25- previous
- 23:50 Japan Tankan All Big Capex Est Q4 forecast 10.2%, 10.90%- previous
- 23:50 Japan Tankan Small Mfg Index Q4 forecast -1, 0- previous
- 23:50 Japan Tankan Small Mfg Outlook DI Q4 forecast -2, -2- previous
- 23:50 Japan Tankan Small Non-Mf Index Q4 forecast 1, 3- previous
- 23:50 Japan Tankan All Small Capex Est Q4 forecast -1.2%, -6.10%- previous
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 1.1030 and hit lows at 1.0970 levels. The dollar fell against euro on Friday against amid a selloff sparked by market volatility concerns and slumping commodity prices that overshadowed solid U.S. retail sales data and in-line consumer sentiment. The greenback had edged higher in morning trading against major rivals, and got a modest bump from U.S. retail sales data that showed consumer spending rising solidly. But it turned negative shortly after as the data looked unlikely to support further monetary policy tightening by the U.S. Federal Reserve beyond December’s heavily anticipated rate increase in the face of global concerns. The dollar fell as much as 0.7 percent versus both the Swiss franc and the euro. It last traded down 0.3 percent against the franc at 0.9842 francs per dollar. The euro EUR= was last up 0.45 percent versus the dollar at $1.0989. To the upside, immediate resistance can be seen at 1.0000. To the downside, immediate support level is located at 1.0930 levels.
GBP/USD is supported in the range of 1.5161 and currently trading at 1.5226 levels. It reached session high at 1.5240 and hit low at 1.5210 levels. Sterling hit a three-week high against a broadly weaker dollar on Friday, recovering from a fall the previous day on Bank of England minutes that were more dovish than some had expected. Investors sold the pound on Thursday after the BoE warned of more barriers to growth next year, bolstering the view that UK interest rates would be kept at their record lows until at least the end of next year. In the minutes from their latest policy meeting, rate-setters focused on a renewed fall in global oil prices and slower rises in wages. They voted 8-1 again to keep interest rates at 0.5 percent, where they have been since 2009. Having weakened further earlier in the day, the pound gained 0.4 percent on Friday to $1.5230 as the greenback fell across the board, its highest since Nov. 20. To the upside, immediate resistance can be seen at 1.5254. To the downside, immediate support level is located at 1.5180 levels.
USD/JPY is supported around 120.50 levels and currently trading at 120.86 levels. It hit session high at 120.89 and made session lows at 120.54 levels. The dollar slipped lower against Japanese Yen on Friday after slides in oil prices and China’s yuan sent investors switching their investments to safe heaven currencies, dragging the US dollar lower. Meanwhile, U.S. Retail sales data showed some muscle in November at the start of the holiday shopping season, suggesting enough momentum in the economy for the Federal Reserve to raise interest rates next week for the first time in nearly a decade. Retail sales excluding automobiles, gasoline, building materials and food services increased 0.6 percent after gaining 0.2 percent in October, the Commerce Department said on Friday. The positive data however failed to lift the falling dollar. The risk selloff pushed the dollar lower against the Japanese yen, which moved below 121 for the first time since early November. The dollar was last down 0.45 percent versus the yen to 121.04 yen. To the upside, immediate resistance can be seen at 120.85. To the downside, immediate support level is located at 120.50 levels.
USD/CAD is supported at 1.3470 levels and is trading at 1.3507 levels. It has made session high at 1.3522 and lows at 1.3502 levels. The Canadian sharply declined against the greenback to hit a fresh 11-year low against the U.S. dollar on Friday as crude oil prices slid further, while U.S. data left the door open to a Federal Reserve rate hike next week. Crude oil prices hit new seven-year lows as the International Energy Agency (IEA) warned global oversupply could worsen in the New Year. World stocks were on the brink of a two-month low as beaten-down oil prices contributed to negative sentiment, while U.S. Treasuries, seen as a safe haven, rallied. The currency’s strongest level of the session was C$1.3625, while at its low it hit its weakest since June 2004 at C$1.3679. To the upside, immediate resistance can be seen at 1.3800. To the downside, immediate support level is located at 1.3730 levels.
Equities Recap
European shares fell on Friday on concerns that weakness in the Chinese yuan could weigh on the global economy, while the slump in oil prices added to the gloomy mood before a widely expected rise in U.S. interest rates next week.
UK’s benchmark FTSE 100 closed down by 1.96 percent, the pan-European FTSEurofirst 300 ended the day up by 1.97 percent, Germany’s Dax ended down by 2.29 percent, France’s CAC finished the day down by 1.66 percent.
U.S. stocks closed sharply lower on Friday, with the S&P 500 ending its worst week since August, as plunging crude oil prices compounded investor nervousness on expectations for the first U.S. interest rate hike in nearly a decade.
Dow Jones closed down by 1.76 percent, S&P 500 ended down by 1.94 percent, Nasdaq finished the day down by 2.21 percent.
Treasuries Recap
Yields on long-dated U.S. Treasury debt declined to multiweek lows on Friday, as an extended drop in oil prices and weak stock markets spurred investors to seek the relative safety of government bonds.
U.S. 10-year notes rose 28/32 in price to yield 2.137 percent, down from Thursday’s 2.237 percent.
The 30-year bond climbed more than 1 point in price to yield 2.877 percent, down from 2.969 percent Thursday. It was the bond yield’s worst one-day fall in 2-1/2 months.
U.S. five-year notes fell 16/32 in price to yield 1.572 percent, down from 1.684 percent late on Thursday.
U.S. two-year notes, meanwhile, rose 3/32 in price, yielding 0.899 percent, down from Thursday’s yield of 0.959 percent.
Commodities Recap
Gold prices bounced on Friday, erasing earlier losses as the dollar and U.S. Treasury yields fell, but was still on track for a seventh weekly drop in eight as investors positioned themselves for a likely U.S. rate rise next week.
Spot gold, lower initially, was up 0.7 percent to $1,078.76 an ounce at 2:20 p.m. EST (1920 GMT). It was on track for a 0.7 percent decline for the week.
Oil prices extended their freefall on Friday, flirting with 11-year lows, after the International Energy Agency (IEA) warned that global oversupply of crude could worsen next year.
Brent and U.S. crude’s West Texas Intermediate (WTI) futures fell as much as 5 percent on the day and 12 percent on the week as mild pre-winter weather and a plummeting U.S. stock market added to the toll on oil prices.
Brent’s front month slipped below $38 a barrel for the first time since December 2008, settling down $1.80, or 4.5 percent, at $37.93.
WTI’s front-month settled in the $35 territory the first time since February 2009. The contract finished the session down $1.14, or 3 percent, at $35.62, after hitting an intraday low at $35.35. WTI’s financial crisis low was $32.40 in December 2008.
Published: 2015-12-11 23:59:00 UTC+00
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