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Forex Afternoon Wrap – 16/12

0 160

Markets eye Fed rate hike. UK unemployment falls to 5.2%

  • Japan manufacturing PMI 52.5 vs. 52.6 previously
  • France flash manufacturing PMI 51.6 vs. 50.6; flash services PMI 50.0 vs. 50.8
  • German flash manufacturing PMI 53.0 vs. 52.8; flash services PMI 55.4 vs. 55.5
  • Eurozone flash manufacturing PMI 53.1 vs. 52.8; flash services PMI 53.9 vs. 54
  • UK average weekly earnings 2.4% vs. 2.5%; unemployment rate 5.2% vs. 5.3%
  • Eurozone CPI m/m -0.1% vs. -0.2%; y/y 0.2% vs. 0.1%
  • Eurozone Core CPI y/y 0.9% vs. 0.9%
  • US housing starts 1173k vs. 1130k; m/m 10.5% vs. 6.6%
  • Building permits 1289k vs. 1153k; m/m 11.0% vs. -0.7%

Later

  • The US Capacity utilization rate
  • Industrial production
  • Manufacturing PMI
  • US Crude Oil inventories
  • FOMC Rate
  • FOMC press conference
  • New Zealand GDP q/q

The markets were trading on a positive note ahead of the Fed’s decision. In Asian trading, the equity markets gained 2.0% on average with the Nikkei225 rising 2.61% followed by the Hang Seng Index which gained 2.01%. The Shanghai Composite was more subdued with modest gains of 0.19%. Data from Japan this morning included the manufacturing PMI which eased to 52.5 from 52.6 previously. The Yen continued to ease against the Greenback since yesterday’s rally. At the time of writing, USDJPY is up 0.16% for the day with the Greenback attempting to break above session highs at 122.03.

The Australian dollar continues to remain weak but is trading comfortably higher off December 11th lows. At the time of writing, AUDUSD is up 0.07% for the day after the currency fell off session highs above 0.7211 to post a session low near 0.719 and remains range bound within yesterday’s high and low. The NZDUSD is down -0.32% for the day and is largely flat, trading near session lows of 0.6743. Yesterday, New Zealand’s global dairy trade index posted modest gains of 1.9%, but down from 3.6% gains previously. Later in the overnight session, New Zealand’s currency account showed a modest deficit with the currency account shrinking to -4.75 billion against estimates of -4.85 billion. Later tonight, the quarterly GDP data is due for release, which currently stands at 0.4%.

The European session saw the Euro continuing to post soft declines to the Dollar. Flash manufacturing and services PMI numbers were released with the Eurozone flash manufacturing PMI rising to 53.1 beating estimates of 52.8 while flash services PMI eased to 53.9 below estimates of 54. EURUSD is up 0.05% after hitting session lows just above 1.091.

The UK’s monthly jobs report was very mixed. While the UK unemployment rate fell to 5.2%, wage growth was sharply lower, rising only 2.4% and missing estimates of 2.5%. The GBPUSD is down -0.05% for the day after the Cable found support near session lows at 1.499.

European equity markets were also faring better today with the German DAX up 1.06% and the FTSE100 gaining 1.18% for the day.

The US trading session was marked with the housing starts and building permits data both of which showed strong gains with housing starts rising 10.5% for the month and building permits rising 11.0% for the month. However, housing starts saw a downward revision to -12.0% last month while housing starts numbers were revised higher to 5.1%. The US Dollar Index did not react much to the news. USDCAD continues to trade higher gaining 0.21% for the day but struggling to break above the session highs of 1.377.

On the commodity front, WTI Crude Oil has held on to its gains from yesterday and is up 0.82% for the day trading at $37 a barrel. Gold prices have also shot up higher rising 1.25% for the day trading at $1074 an ounce.

The remainder of the evening is marked with US industrial production data and US capacity utilization rate and manufacturing PMI, following which the focus shifts to the Fed’s rate hike decision and the New Zealand quarterly GDP numbers.

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