Wednesday 2nd December: European Open Briefing

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Wednesday 2nd December: European Open Briefing 1

Global Markets:

  • Asian stock markets: Nikkei down 0.25 %, Shanghai Composite and Hang Seng both gained 0.35 %, ASX fell 0.10 %
  • Commodities: Gold at $1067 (+0.40 %), Silver at $14.15 (+0.50 %), WTI Oil at $41.55 (-0.70 %), Brent Oil at $44.25 (-0.10 %)
  • Rates: US 10 year yield at 2.17, UK 10 year yield at 1.76, German 10 year yield at 0.47

News & Data:

  • Australia GDP SA (QoQ) Q3: 0.9% (exp 0.8% prev 0.2%)
  • Australia GDP (YoY) Q3: 2.5% (exp 2.4% prev 2.0%)
  • Japan Monetary Base (Nov): JPY 343.7tln (prev JPY 344.4tln)
  • PBoC Fixes Yuan Reference Rate At 6.3958 (prev 6.3973)
  • RBA Governor Stevens: Outlook Appears To Be For Continued Moderate Growth
  • Stevens: Economic Outcome Respectable In Circumstances
  • Stevens: AUD Swings Have Helped Avoid Damaging Inflation/Bust Cycle
  • Stevens: More Could Be Done On Interest Rate Front If Needed
  • BoJ Deputy Governor Iwata: Japan Economy Has Continued To Recover Moderately
  • Iwata: Positive Economic Cycle Intact For Both Households & Firm
  • Asia stocks wary, dollar knocked after weak U.S. data – RTRS
  • U.S. manufacturing contracts, but rest of economy humming along – RTRS
  • Oil dips on surprise U.S. stockpile gain ahead of OPEC meet – RTRS

Markets Update:

The US Dollar weakened after a lower than expected ISM Manufacturing PMI print (48.6 vs. 50.5 expected). The Euro benefited from this and a small short squeeze occurred, which took EUR/USD to 1.0636, just 2 pips away from last Friday's high. The next notable resistance level is now 1.0690, but it is more likely that the pair will continue to consolidate ahead of the ECB meeting tomorrow. Meanwhile, GBP/USD price action remains choppy. It rose to 1.5120 yesterday morning, but weak manufacturing PMI data put the Pound under pressure and the pair fell back to 1.5050. In Asia, it spent the session in a 1.5064-82 range.

USD/JPY remains quite resilient despite the broad USD weakness. Overnight, it bounced from the 122.80 level and is back above 123. Resistance is seen at 123.30/35, while support now lies at 122.60/65. Unless we see any surprising econ data today or tomorrow, USD/JPY is likely to remain in a rather tight range pre-NFP, as it is the case most of the time.

The Aussie and Kiwi Dollar extended gains overnight, with AUD/USD having reached 0.7340 and NZD/USD almost at 0.67. The Canadian Dollar however, has been under pressure following weak GDP data and another decline in Oil prices.

Upcoming Events:

  • 09:30 GMT – UK Construction PMI
  • 10:00 GMT – Euro Zone CPI
  • 13:15 GMT – US ADP Nonfarm Employment Change
  • 13:30 GMT – Fed Chair Yellen speaks
  • 15:00 GMT – Bank of Canada Rate Decision
  • 20:40 GMT – FOMC Member Williams speaks


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