Europe Roundup: Dollar Index to End 2015 With 9 Pct Gain, European Shares to Post Yearly Gains, Yuan Ends With Record Loss-

Market Roundup

  • Greek October Retail Sales -2.5 pct Y/Y versus revised -3.3 pct in September.
  • Russia CPI +12.9 pct Y/Y in December versus +15.0 pct in November – Stats Service.
  • Malaysia’s November Broad Money up 3.7 pct on Year – Central Bank.
  • Hong Kong Dollar M-3 {.Act} pct in November Year-On-Year – HKMA.
  • South Korea December Housing Price Index +0.18 pct M/M, +4.42 pct Y/Y – Kookmin Bank.
  • Turkey November Trade Balance decreases to -4.2 Bln $ versus previous $-3.620 Bln.
  • South Africa November M3 Money Supply YY decreases to 9.35 % (Forecast 9.13 %) versus previous 9.74%.
  • South Africa November Pvt Sector Credit Ext. Increases to 9.53 % (Forecast 8.31 %) versus previous 8.87 %.
  • Russia December Markit Services PMI Decreases to 47.8 versus previous 49.8.
  • Sri Lanka Central Bank Chief says raising key Policy Rates will damage economic growth.
  • Indonesia C. Bank Gov sees Y/Y Inflation at slightly above 3 pct at end 2015.
  • India’s End-September External Debt at $483.2 Bln.
  • Turkish Treasury: Net External Debt Stock $240.3 Bln as of Q3.
  • Turkish Treasury: Gross External Debt Stock $406 Bln as of Q3.
  • Poland’s PM Sees 2016 FDI Inflow at similar level to 8 bln euros in 2015.
  • Poland’s Deputy PM Morawiecki says better tax collection may bring 7-10 bln zlotys in 2016.
  • Poland’s PM says present zloty/euro rate is good for economy.
  • China Securities Regulator says will amend securities issuance and underwriting rules.
  • China Central Bank Governor says will continue to implement prudent monetary policy in 2016. 
  • China Central Bank Governor says to keep liquidity reasonable, sufficient in 2016.
  • China Central Bank Governor says will improve efficiency of financial system to support real economy.

Economic Data Ahead

  • (0730 ET/1230 GMT) ECB will release its Monetary Policy Meeting Accounts containing an overview of financial market, economic and monetary developments.
  • (0830 ET/1330 GMT) Economists expect the number of Americans filing for jobless benefits to have risen by 3,000 to a seasonally adjusted 270,000 for the week ended Dec. 26. Continuing jobless claims for the week ending Dec. 18 likely rose to 2.201 mln from 2.195 mln.
  • (0945 ET/1445 GMT) The Chicago Purchasing Management Index is expected to have risen in December to 49.8 from November’s reading of 48.7. 

Key Events Ahead

  • Mexico’s central bank releases minutes of its Dec. 17 decision to raise interest rates for the first time in seven years.

FX BeatUSD: The dollar is on track to end the year with a 9 percent annual gain against a basket of currencies on Thursday. It was marginally higher against the euro on the day. The dollar was last up 0.05 percent against the yen at 120.530 yen and was last down 0.7 percent against the Swiss franc at 0.98620 franc. EUR/USD: The euro was last up 0.11 percent against the greenback at $1.09305. It has slightly recovered till 1.0943 after making a low of 1.08990. It is currently trading around 1.09163. Major resistance is around 1.1000 and any break above 1.100 will take the pair to 1.1060/1.1090 level. The minor resistance is around 1.0950. On the downside minor support is around 1.0880 and break below targets 1.0840/1.0800. USD/JPY: The yen was a touch higher on the day at 120.36 yen and is less than 1 percent weaker over the past 12 months, halting a run of double digit annual depreciation since 2011. The pair is trading in narrow range between 120.63-120.09 for the past two trading sessions. Short term trend is still weak as long as resistance 121.50 holds. On the higher side it is facing resistance around 120.70 and any break above targets 121/121.50. The pair’s major support is at 120 and break below targets 119.25/118.60.GBP/USD: The Cable has slightly recovered after making a low of 1.4785. It was trading around 1.48275 and is facing minor resistance around 1.4850 and break above targets 1.4880/1.4920/1.4950. On the lower side major support is around 1.4780 and break below targets 1.4720/1.4650 level. Overall bullish invalidation is only above 1.5100. Sterling has fallen 4.7 percent against a basket of currencies this year.USD/CHF: The pair has broken minor resistance 0.9900 and jumped till 0.99088 at the time of writing. The resistance is at 0.9950 and break above targets 1/1.0030 level. On the lower side support is at 0.9850 and break below will drag the pair down till 0.9820/0.9780 is possible. Overall bullish invalidation is only below 0.9780.AUD/USD: The Australian dollar was on track to end 2015 sharply lower around 11 pct against their U.S. peer, and could remain under pressure in the new year if commodity prices remain weak. The Aussie held steady at $0.7291 on the last trading day of the year, having bounced from a low of $0.7097 hit earlier this month. The resistance is around 0.7335 (Dec 9th high) and any break above 0.7335 will take the pair till 0.7380. On the lower side minor support is around 0.7240 and any break below will target 0.7200/0.7170. Short term weakness is only below 0.7150. The Aussie performed better against kiwi, up 1.6 percent.NZD/USD: The New Zealand dollar was weaker at $0.6842 on Thursday ahead of a four-day holiday weekend. While up from a  six-year low below 61 cents, it is still on track for a loss of more than 10 cents on the year. USD/CNY: China’s yuan weakened against the dollar on Thursday, and was on track to end  the year with a record yearly loss of 4.7 percent after volatile trading for the last five months. Some traders forecast that it could slip as far as 6.80 to the dollar at the end of 2016, based on the slowing growth and divergence in the value of the yuan onshore and offshore. The spot market closed at 6.4936 per dollar, 0.05 percent weaker than the previous close. The offshore yuan was trading 1.18 percent weaker than the onshore spot at 6.5710 per dollar. Equities RecapEuropean shares were on track to finish the year with gains, despite they were below earlier peaks after weak commodity prices weighed on markets in the final quarter. Britain’s blue-chip FTSE 100 index and France’s benchmark CAC-40 index were both down 0.4 percent on Thursday. Germany’s DAX was closed for a public holiday, while other markets were due for only a half day of trading.In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan went up 0.1 pct, China’s CSI300 Index ended down 0.9 pct at 3,731.00 points, Shanghai Composite Index rose 9.4 pct for 2015 and HK’s Hang Seng Index finished up 0.2 pct at 21,914.40 points.Commodities RecapOil prices are set to record second year of steep losses, despite recovering fractionally in the last trading hours of 2015, as record OPEC supply created an unprecedented global glut that may take another year to clear. U.S. West Texas Intermediate (WTI) crude futures traded 11 cents higher at $36.71 a barrel at 0936 GMT on Thursday and Brent was 20 cents higher at $36.66 a barrel.Gold inched higher on Thursday as the dollar rally paused but the metal was set to post a third straight annual loss. Spot gold rose 0.2 percent to $1,062.15 an ounce by 1034 GMT during the last trading session of the year. Volumes were thin ahead of the New Year holiday on Friday. Prices were set to end 2015 close to a near-six-year low of $1,045.85 hit earlier in December.Treasuries RecapUS 10 year Treasury notes yield stood at 2.2997 pct, dropping by 0.005 pct.UK Gilts started 5 touches higher than the settlement of 116.44, as expected, as markets consolidate into year end. New Zealand government bonds lost, pushing yields 1.5 bps higher at the short end and 0.5bp higher at the long end. Australian government bond futures were just off multi-week highs, with 3-year bond contract being unchanged at 97.990. The 10-year contract shed 4 ticks to 97.1500, while the 20-year contract remained flat at 96.6500.

The material has been provided by InstaForex Company – www.instaforex.com

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