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Daily Market Update 16th December 2016

 

ECONOMIC DATA OF THE DAY

Time CY Indicator Forecast Actual Previous
08:30 SI Non-oil Domestic Exports YoY -2.70% 11.50% -12.00%
08:30 SI Non-oil Domestic Exports SA MoM -1.50% 13.10% -3.70%
21:30 US Housing Starts 1230k -- 1323k
21:30 US Building Permits 1240k -- 1229k
(Source: FabTrader)


SPEECHES

  • 17:00 - EC - ECB's Weidmann speaks at opening of Bundesbank's Money Museum
  • 20:15 - EC - ECB Vice President Constancio Speaks in Madrid

OVERNIGHT NEWS
US:
  • US data continue to provide evidence of the economy on firm footing but without any significant inflation pressures. Yesterday’s CPI data was in line with expectations, headline a t 1.7% while core was slightly below estimates at 2.1%, flat from prior month. Empire manufacturing and Phili fed data both beat expectations with strong upside surprises.
  • UST yields continued to rise, with 10 years above 2.6%. Us equities rallied, trading just below their all-time highs and the USD continued its march higher
EUROPE:
  • Raft of European PMI data all in expansionary territory and healthily so. Most beat estimates pointing to a continued improvement of the economic outlook in Europe.
  • European stocks put in a strong day yesterday, rising over 1%, with financials leading the charge. The steepening of yield curves and rising inflation expectations providing a tail wind to the financials.

FOREIGN EXCHANGE (INDICATIVE RATES)

Currency Last % Change Overnight Range
DXY 103.08 1.24 102.16 - 103.56
EURUSD 1.0427 -1.16 1.0367 - 1.0539
USDJPY 118.17 0.97 117.01 - 118.66
AUDUSD 0.7032 -1.12 0.7010 - 0.7124
GBPUSD 1.2400 -1.16 1.2376 - 1.2568
(Source: FabTrader)


COMMODITIES (INDICATIVE RATES)

Currency Price USD % Change Overnight Range
Gold 1128.50 -1.26 1122.89 - 1146.10
Silver 15.97 -5.16 15.88 - 16.95
Oil (BRENT) 54.02 0.22 53.15 - 54.50
Oil (WTI) 50.90 -0.27 49.95 - 51.48
(Source: Bloomberg and Saxo)


COMMODITIES

Precious Metals: Gold prices came under continued pressure after the Hawkish FOMC meeting on the back of stronger USD. Good data on jobless claims yesterday from the U.S confirms such view from the Fed. The safe haven asset is losing its appeal under such conditions and technical supports from price chart now are just meant to be broken.

Oil: Oil prices fell on the back of a stronger USD and news of Libya reopening two of its biggest oil filed after 2 years piles on pressure on oil prices before news on Kuwait to make bigger supply cuts to U.S., European customers than Asian buyers provides support for oil.

FOREX NEWS

    • US stocks climbed slightly higher as investors/traders with all 3 U.S  indices up 0.3-0.4%. Financials was the best performing sector and is followed by telecoms. REITs sector was under pressure, down 0.7% on the back of a higher median dot plot of the fed rate.
    • European stocks moved within sight of a 2016 fresh high as bank stocks roared. Italy is the best performer and is only 300 points or 1.5% shy of its high this year. Euro Stoxx Banks was also up 3.3% and close at highest in 2016 since early Jan this year.
    • Yahoo was down 6.1% as they came under renewed scrutiny by federal investors and lawmakers after disclosing the largest known data breach in history with possibly a billion accounts hacked. This is the second known hack of Yahoo accounts in 3 months. The breach of data could mean Verizon could potentially buy Yahoo’s core internet business at a much better deal, having agreed to buy at $4.8 billion in July.
    • Drug maker Eli Lilly rose 5.47% on the back of a stronger guidance into 2017. Following a failed trial of its Alzheimer’s drug Solanzeumab, shares have fallen nearly 8% since the announcement last November. Share price gapped up and covered its recent gap in late November and should face resistance at next resistance at $76.

Europe Stocks Rise on Weak Euro as Fed Signals Faster Rate Hikes

European stocks climbed as the euro tumbled to the weakest level since 2003 against the dollar after the Federal Reserve signaled it will raise interest rates more quickly next year. The Stoxx Europe 600 Index rose 0.9 percent to close at its highest level since January. The benchmark is 1.9 percent away from erasing its declines for the year. Banks and exporters to the U.S. including technology and health-care companies were among the biggest gainers after Fed officials forecast they now expect three quarter-point rate increases next year, up from two seen in September. Travel shares also rallied.


Read the full article at bloomberg.com

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