FX News Today

A tumultuous session in Asia, initiated by China stocks markets closing limit down within the first half an hour of trade, saw the yen extend recent outperformance and the commodity currencies extend recent underperformance. Asian currencies, ex-yen, also went into a tailspin, although most managed to regain poise as the session progressed. AUDJPY, which is a forex proxy of China sentiment, dove to a new four-month low, and AUDUSD a three-month low. The NZD and CAD also fell to new lows. Oil prices dove over 4%, driving Brent crude prices to fresh 11-year lows. The catalyst of the carnage was an accelerated depreciation of the yuan, of 0.5% today, which is the biggest drop since last August.

German Nov retail sales up 0.2% m/m, a tad weaker than expected and bringing the annual rate to 2.3% y/y from 2.5% y/y in October. The three months trend rate was unchanged at 0.2%. Annual rates remain robust and monthly numbers are volatile and subject to sizeable revisions, but on the whole the data confirms that consumption remains underpinned by the improvement in real disposable income on the back of rising wages, low unemployment and low oil prices.

German Nov orders much stronger than expected. Manufacturing orders jumped 1.5% m/m in November, after already rising a very strong 1.7% m/m in the previous month. The robust rise lifted the annual rate to 2.1% y/y from -1.6% y/y and while the three months trend rate remains in negative territory, it improved markedly from -1.3% from -2.9% in the three months to October. The numbers tie in with the better than expected confidence readings and show the German economy on track for ongoing robust growth.

World Bank cut its global growth outlook to 2.9% for 2016, versus the prior 3.3% projection from June. It missed its 2015 estimate of 2.8% on the low side as GDP rose only 2.4% last year, a 5th straight year below 3%. The forecast for Chinese growth was trimmed to 6.7% versus 7.0% previously, while the U.S. expansion was shaved to 2.7% from 2.8%, due in part to the damping effect of the firmer dollar. The Bank also sees a “low probability risk of disorderly” slowing in major emerging markets due to Fed tightening, a firmer dollar, and geopolitical concerns.

FOMC minutes indicated nearly all members believed conditions had been met for liftoff in December, though some noted it was a “close call.” Inflation was a major point of discussion. Overll, the FOMC was “reasonably confident” that the 2% goal would be achieved, though some saw “considerable” risk that price pressures would not build due to the stronger dollar and soft oil prices. Expectations for a gradual policy path was also the general outlook, and there were several reasons for the cautious approach, including maintaining an accommodative stance and the uncertain outlook over inflation. It would also allow policymakers time to assess the economy’s reaction to tightening. But, there were also statements that policy would be be data dependent. There was no clear indication over the likelihood of another hike in March. However, more weak economic reports like the ones so far this year, and increased uncertainty over the inflation trajectory (the worry of several Fed officials), could leave rates on hold.

Main Macro Events Today

• European Unemployment Rate: no change is expected in the European unemployment rate. It is expected to stay at 10.7%.
• BoC Governor Poloz Speech: markets are focusing on the Governor Poloz speech in order to see if the Fed’s rate in December and the continued downfall in the price of crude oil impacts the BoC rate decisions.
• US Continuing Jobless Claims are expected to rise 190k in December vs 217k.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

European stock markets are heading lower again at the start of the European trading day, following on from losses on most Asian markets outside of China which managed to move higher as officials weakened the Yuan. China’s CAIXIN Services PMI fell to 17-month low of 50.2 in December. The data clearly adds to concerns about the health of the world’s second largest economy.

The EUR continues to weaken after Eurozone National PMIs mixed, with the German services reading revised up to 56.0 from 55.4 reported initially and versus 55.6 in November. The Italian reading, released for the first time, also came in higher than expected and jumped to 55.3 from 53.4. The French reading meanwhile was revised down to 49.8 from 50.0, which means the sector is back in contraction territory. The Spanish services PMI also came in much weaker than anticipated and fell to 55.1 from 56.7, although this is still a very high reading, indicating ongoing robust growth.

Crude Oil trades lower near $35.50 at the time of writing, after ranging between $37.10 and $36.46 overnight. Monday’s rally to near one month highs near $38.40 was short-lived, and since then has traded lower by the ongoing story of global oversupply.

The JPY has been over preforming against the majors, with USDJPY trading to fresh near three-month lows and EURJPY extending deeper into near eight-month low territory.

The commodity currencies (AUD and CAD) continue to underperform, with most commodities and stock markets in Asia mostly trading lower.

Main Macro Events Today

• USD U.S. Trade Deficit: November trade data is out today and should reveal a $43.3 bln (median -$44.2 bln) deficit for the month which would represent a narrowing over the $43.9 bln deficit reported in October. Analyst expect exports and imports to both decline by 1.1% for the month compared to respective October figures which showed a 1.4% decline for exports and a 0.6% decline for imports.

• USD U.S. Factory Goods: November factory goods data is out today and should show orders unchanged (median -0.2%) with inventories down 0.2% and sales up 0.5% for the month. This would follow respective October figures of 1.4% for orders, -0.1% for inventories and -0.6% for shipments. The durable goods data for the month had orders unchanged, inventories down 0.3% and sales up 0.9%. Data in line with forecast would leave the I/S ratio steady at 1.35 for a fourth month.

• USD U.S. Non-Manufacturing ISM: The December service sector ISM is out later today and should tick up to 56.0 (median 56.0) from 55.9 in November. The December ISM declined to 48.2 from 48.6 but strength in component data from other measures of sentiment have led us to expect an improvement in December with the broad ISM adjusted average climbing to 51 after holding at 50 since September.

• USD FOMC Minutes: The December meeting minutes will be scrutinized for clues on the rate trajectory, even though officials have said increases will be gradual, but also data dependent. The initial liftoff, however, seemed to be more of a case that rates have been too low for too long, and not an overheating economy or rising prices. Meanwhile, the Fed’s dot-plot suggest there will be 4 increases this year.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

The dollar was mostly higher with a bit of a safe-haven money flowing into the USD as geopolitical tensions and a slowdown in China’s economic expansion on Monday, contributed to the 7% sell off in Asian stock markets at the start of the new year. The global stock market sell-off spill over into the European and the U.S. stock markets with U.S, markets preforming better than European equities. However, in overnight Tuesday trading, Chinese stocks traded back from session lows, after the Shanghai Comp tumbled over 3% at the open before reversing back into the green, as officials came in to inject cash into the banking system via a $20 bln open market reverse repo operation to ensure liquidity while also reportedly intervening to support the yuan.

Yesterday, The EURUSD fell to one-month lows near 1.0780 before buyers moved in to support prices; the USDJPY broke below the 118 handle before rallying to 119.70. Meanwhile, the GBP touched close to multi-month lows of 1.4660, and the USDCAD pulled back early on higher oil prices, however, the USDCAD rallied back over 1.3980 when crude Oil prices failed to retain gains.

Monday U.S. data was not uplifting, as both manufacturing ISM and construction spending both missed expectations. The U.S. calendar is thin today, featuring December auto sales and weekly chain store data. The Canadian calendar has industrial product price index for November while the European calendar has U.K. Construction PMI, Italy HICP, Spain unemployment.

Main Macro Events Today

• EUR German Unemployment: Yesterday’s PMI readings confirmed that growth is broadening and the improvement is also helping the labor market across the Eurozone and analyst are looking for a fresh decline in German jobless numbers of 5K (median -8K), which should leave the December jobless rate steady at a very low 6.3%.

• EUR Preliminary December Inflation: Preliminary December inflation numbers for Italy and the Eurozone. The Spanish reading last week came in higher than expected, while the German HICP, released yesterday, unexpectedly fell.

• GBP PMI Construction: Analyst forecast a 56.0 reading up from the previous 55.3.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Lower oil prices weighed moderately on North American equity markets with the Dow Jones ending lower -0.66%, and the USD traded relatively steady. Today, the last trading day of the year should bring more of the same, as Japan is on holiday, and the economic calendar is almost nonexistent. The overnight Asian session traded in a narrow range, leaving the USDJPY in a holding pattern.

In Europe, the DAX is heading for a year end level that is still far off the highs seen earlier in the year but nevertheless markedly higher than at the start of the year. Thin holiday trade exaggerated moves, and Germany, Italy, Scandinavia and Switzerland will remain closed for the New Year’s Eve and tomorrow, while other European markets close early.

Eurozone M3 money supply growth decelerated to 5.1% y/y in November from 5.3% y/y in October, in line with Analyst forecast. The growth rate of loans to households rose to 1.4% y/y from 1.2% y/y and loans to non-financial corporations rose 0.9% y/y. Annual money supply growth remains high and lending slowly picks up as credit conditions improve. Much of the remaining weakness in lending to companies is also due to a lack of demand, as most remain happy to fulfill current orders with existing capacity.

Crude Oil fell to $36.40 session lows following the EIA inventory data which showed a 2.6 mln bbl rise in crude stocks. The street had been expecting a 2.0 mln bbl decrease. Meanwhile, gasoline supplies, seen up 0.5 mln bbls actually rose 900k bbls, while distillate stocks were up 1.8 mln bbls, versus expectations for a 1.0 mln bbl rise. Refinery usage rose to 92.6% from 91.3%. Overall, a bearish report.

Gold took a bit of a tumble, with sellers apparently stepping in on the move under $1,065 , which had provided support over the past two sessions. The contract had peaked at $1,072.20 overnight, and is currently trading near $1,063.

Main Macro Events Today

• EUR ECB Monetary Policy Meeting Accounts: No Comment.

• USD Initial Jobless Claims: Claims data for the week of December 26 are out today and should reveal an increase to 275k (median 270k) from 267k last week and 272k in the week prior. Claims have continued to show restraint through the holiday season despite an increase in volatility and December looks poised to leave a monthly average of 272k, only slightly higher than the 270k in average in November but up from the 263k average for October.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.