DAILY MARKET UPDATE
CURRENCIES & COMMODITIES Wednesday, November 25, 2015
NEWS HEADLINES U.S. dollar weighed by falling consumer confidence Yesterday’s data was not that supportive for the U.S. dollar, which also faced a downward pressure against safe-haven currencies. On the other hand, the Euro benefited from Germany’s positive data.
Gold edging slightly higher Gold prices rose as any geo-political tension would increase flight to safety. However, gains might be capped as the major focus of investors would be the U.S. rate decision in December.
Oil prices easing after recent jump The unresolved situation and ongoing tensions in the Middle East continue to provide support for oil prices although supply concerns are not yet elevated. Today, EIA oil data will be in focus.
CURRENT RATES EUR
1.0675
0.30%
GBP
1.5093
0.06%
AUD
0.7272
0.21%
NZD
0.6567
0.18%
JPY
122.32
0.17%
CHF
1.0152
0.15%
CAD
1.3309
-0.03%
EUR/JPY
130.57
0.12%
EUR/CHF
1.0837
0.14%
EUR/GBP
0.7072
0.23%
$ GOLD
1078.05
0.22%
$ SILVER
14.19
-0.02%
L. CRUDE
42.56
-0.72%
B. CRUDE
45.91
-0.46%
COPPER
205.55
-0.65%
PLATINUM
842.75
-0.06%
Read more in PAGE 3
Read more in PAGE 1
GENERAL TOPICS U.S. economic growth revised up to 2.1% in Q3
KEY INDICATORS TODAY
The U.S. economy grew at a healthier clip in the third quarter than initially thought, but strong inventory accumulation by businesses could temper expectations of an acceleration in growth in the final three months of the year.
German business confidence rising German business confidence unexpectedly rose in a sign that Europe’s largest economy is robust enough to weather risks including a global slowdown and Volkswagen AG’s emissions scandal. The Ifo institute’s business climate index climbed to 109 in November, the highest level since June 2014, from 108.2 in October.
U.S. Initial Jobless Claims U.S. Durable Goods U.S. Personal Spending U.S. New Home Sales U.S. Michigan Consumer Sentiment
NZ Trade Balance EIA oil data
Read more in PAGE 3
Read more in PAGE 2
NEWS
»
Copyright: Bank of Beirut 2015 - Research Department - Global Markets Division
DAILY MARKET UPDATE
CURRENCIES & COMMODITIES Wednesday, November 25, 2015 MAIN
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NEWS
US$ weighed by falling consumer confidence
Oil prices easing after recent jump
A surprise drop in U.S. consumer confidence and concerns about rising global tension between Russia and Turkey pushed the dollar down on Tuesday as investors sought out safe-haven currencies. The decline in consumer confidence, to its lowest since September 2014, accelerated moves out of the greenback despite positive data on the U.S. economy earlier in the day. U.S. gross domestic product grew 2.1% in the third quarter, a healthier clip than initially thought, the government said. The upward revision for GDP, one of the most important indicators of growth, could give the U.S. Federal Reserve the confidence to raise interest rates next month. However, investors preferred the Japanese yen and Swiss franc on Tuesday, as they seemed more concerned with events in the Middle East, where Turkish forces shot down a Russian plane near the Syrian border. The dollar hit a session low against the Japanese yen after the GDP release, and was down 0.17% to 122.32 yen. The dollar touched a session low against the Swiss franc ahead of the GDP data's release, and was last down 0.3% to 1.0152 francs per dollar. The euro added 0.30% against the greenback to $1.0675, buoyed by data from Germany that showed business sentiment in the euro zone's biggest economy was at its highest in more than a year, according to an IFO survey. The dollar index .DXY, which measures the dollar against six other major world currencies, fell 0.10% to 99.427. It touched an eightmonth high on Monday. The dollar did rise against sterling on Tuesday after the Bank of England's chief economist, Andy Haldane, said there were downside risks to inflation and growth, while Governor Mark Carney reiterated a low interest rate environment is likely to persist. Earlier this month, he cooled expectations that the BoE will soon follow the Federal Reserve in raising rates. The pound fell 0.3% against the dollar to $1.5078.
Crude oil futures eased on Wednesday after prices hit two-week highs in the previous session as tension mounted in the Middle East following Turkey's downing of a Russian warplane. Brent shed 21 cents at $45.91 a barrel as of 10 am LT, reversing brief gains earlier in the session. The benchmark had settled up $1.29 at $46.12 on Tuesday, after hitting its highest since Nov. 11 at $46.50. U.S. West Texas Intermediate (WTI) futures lost 31 cents at $42.56 a barrel. WTI finished up $1.12 on Tuesday at $42.87, having touched $43.46 during the session, also its highest since Nov.11. The increased military operations against IS and the crisis between Turkey and Russia, like most confrontations that take place in the Middle East, have raised worries about disruption to oil production and shipments. Data from industry group the American Petroleum Institute data showed that U.S. crude stocks rose by 2.6 million barrels in the week to Nov. 20, more than double analysts' expectations for an increase of 1.2 million barrels.
Gold edging slightly higher Gold added to overnight gains on Wednesday on a softer dollar and heightened tensions after Turkey shot down a Russian warplane, but the rally was capped on expectations of a U.S. rate hike next month. Turkey shot down the Russian jet near the Syrian border on Tuesday, saying the plane had violated its air space, in one of the most serious publicly acknowledged clashes between a NATO member country and Russia for half a century. U.S. President Barack Obama and French President Francois Hollande, meeting in Washington, urged against an escalation, while NATO Secretary-General Jens Stoltenberg said the military alliance stood in solidarity with Turkey. The tensions triggered a sell-off in equities and the dollar, while boosting the safe-haven yen, gold and government debt. Spot gold edged up 0.22% to $1,078.05 an ounce by 10 am LT, following a 0.6% gain on Tuesday. U.S. gold rose 0.5%, after a near 1% gain in the previous session. Despite the gains, gold wasn't too far from a near-six-year low of $1,064.95 hit last week on increasing views that the Federal Reserve will hike U.S. rates next month for the first time in nearly a decade. Gold tends to benefit from ultra-low U.S. rates, which lower the opportunity cost of holding non-yielding bullion. Data on Tuesday supported views of a December rate hike. The U.S. economy grew at a healthier clip in the third quarter than initially thought. Traders will be eyeing more U.S. data due later on Wednesday, including weekly jobless claims and October new home sales, to gauge the strength of the economy. Liquidity, however, could be thin ahead of the U.S. Thanksgiving holiday on Thursday. Among other precious metals, silver rose for a second session after dipping to a 6-year low of $13.86 earlier this week, while platinum was trading just above a seven-year low. Palladium rose nearly 1% to $540.65.
TOPICS
»
Copyright: Bank of Beirut 2015 - Research Department - Global Markets Division
DAILY MARKET UPDATE
CURRENCIES & COMMODITIES Wednesday, November 25, 2015 MAIN
GENERAL TOPICS
U.S. economic growth revised up to 2.10% in Q3 The U.S. economy grew at a healthier clip in the third quarter than initially thought, but strong inventory accumulation by businesses could temper expectations of an acceleration in growth in the final three months of the year. The Commerce Department on Tuesday said the nation's gross domestic product grew at a 2.1% annual pace, not the 1.5% rate it reported last month, as businesses reduced an inventory bloat less aggressively than previously believed. The pace of economic growth, which was also boosted by upward revisions to business spending on equipment, suggests a resilience that could help give the Federal Reserve confidence to raise interest rates next month. While consumer spending was revised down a bit, its pace remained brisk, suggesting consumers were cash-flush. When measured from the income side, the economy grew at a sturdy 3.1% clip, the fastest in a year and an acceleration from the second quarter's upwardly 2.2% pace. Wages and salaries increased $109.3 billion, $61.6 billion more than initially estimated. The third-quarter's respectable expansion should set up the economy to achieve at least 2% growth in the second half of the year, around its long-run potential. In the wake of robust job growth in October and strong domestic demand, the Fed is expected to raise rates at its Dec. 15-16 policy meeting. Other data on Tuesday showed consumer confidence fell further in November, hitting a 14-month low, as sentiment towards the labor market surprisingly soured. Economists suspected the Nov. 13 attacks in Paris and rising tensions in the Middle East had weighed on consumer confidence. Despite the drop, more consumers say they plan to buy homes, automobiles and other big-ticket items over the next six months. A third report showed house prices rose solidly in August. U.S. financial markers were little moved by the data as investors worried about global security after Turkey shot down a Russian warplane. In the third quarter, businesses accumulated $90.2 billion worth of inventories, instead of the $56.8 billion reported last month. That followed more than $100 billion worth of inventories accumulated in each of the prior two quarters. As a result, the change in inventories chopped off only 0.59%age point from third-quarter GDP growth, rather than the 1.44%age points the government reported in October. That, however, suggests inventories could be a drag on fourth-quarter growth.
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month. A measure of expectations climbed to 104.7 from a revised 103.9. Data earlier on Tuesday showed that German economic growth last quarter was led by domestic consumption as investment contracted and net trade dragged. Private spending increased 0.6% in the three months through September, according to data released Tuesday from the Federal Statistics Office in Wiesbaden. Exports rose 0.2% while imports jumped 1.1%, and capital investment shrank by 0.3%. The economy expanded 0.3%, matching a Nov. 13 estimate. The chief headwinds are emanating from an emerging-market slowdown, sparked by China as it tries to reduce its dependence on investment and exports. The nation was Germany’s third-largest trading partner last year. Worsening the mood, the Volkswagen emissions scandal is still widening more than two months after its cheating became public. The U.S. Environmental Protection Agency and the California Air Resources Board are now probing Volkswagen, Audi and Porsche models with 3.0liter diesel engines as far back as the 2009 model year, after initially focusing on newer versions. Even so, economic activity in Germany picked up this month, with a gauge of services at the highest level since September 2014 and a measure of manufacturing also advancing, a survey by London-based Markit Economics showed on Monday. The ZEW index of investor confidence rose in November for the first time in eight months.
German business confidence rising German business confidence unexpectedly rose in a sign that Europe’s largest economy is robust enough to weather risks including a global slowdown and Volkswagen AG’s emissions scandal. The Ifo institute’s business climate index climbed to 109 in November, the highest level since June 2014, from 108.2 in October. The median estimate in a Bloomberg survey of economists was for the measure to stay unchanged. Ifo said the Paris terror attacks didn’t have a negative impact on the survey data. German companies are battling to cope with a slowing global economy, the homegrown scandal at its biggest carmaker, a refugee crisis, and now a threat to euro-area consumer confidence after the Paris attacks and lockdown of Brussels. Even so, record-low unemployment and interest rates are supporting domestic demand, and more stimulus may be ahead as the European Central Bank considers whether to ease monetary policy further. A gauge of the current economic condition in Germany also unexpectedly rose, to 113.4 in November from a revised 112.7 the previous
»
Copyright: Bank of Beirut 2015 - Research Department - Global Markets Division
RATES & CALENDAR
DAILY MARKET UPDATE
CURRENCIES & COMMODITIES Wednesday, November 25, 2015 MAIN
RATES & CALENDAR
CURRENT TRADING SESSION As of 10 am (LT) Last Price % High Low EUR GBP AUD NZD JPY* CHF* CAD* EUR/JPY EUR/CHF EUR/GBP
1.0675 1.5093 0.7272 0.6567 122.32 1.0152 1.3309 130.57 1.0837 0.7072
$ GOLD $ SILVER L. CRUDE B. CRUDE COPPER PLATINUM
1078.05 14.19 42.56 45.91 205.55 842.75
0.30% 0.06% 0.21% 0.18% 0.17% 0.15% -0.03% 0.12% 0.14% 0.23% 0.22% -0.02% -0.72% -0.46% -0.65% -0.06%
1
2
SUPPORTS
PREVIOUS SESSION
3
4
RESISTANCES
High
Low
S1
S2
S3
R1
R2
R3
1.0620 1.5054 0.7185 0.6503 122.31 1.0144 1.3285 130.20 1.0812 0.7015
1.0709 1.5403 0.7346 0.6625 123.32 1.0238 1.3415 131.19 1.0966 0.7133
1.0689 1.5115 0.7283 0.6581 122.58 1.0172 1.3310 130.77 1.0847 0.7080
1.0640 1.5078 0.7253 0.6552 122.26 1.0144 1.3280 130.35 1.0818 0.7055
1.0673 1.5156 0.7258 0.6559 122.96 1.0194 1.3378 130.80 1.0853 0.7080
1.0623 1.5048 0.7205 0.6536 122.28 1.0156 1.3278 130.17 1.0806 0.7032
1.0602 1.5012 0.7165 0.6499 122.08 1.0119 1.3253 129.95 1.0785 0.7004
1.0586 1.4963 0.7120 0.6335 121.79 0.9748 1.3214 129.66 1.0760 0.6977
1.0659 1.5113 0.7282 0.6575 122.72 1.0192 1.3337 130.60 1.0841 0.7081
1.0685 1.5162 0.7307 0.6595 123.05 1.0213 1.3382 130.92 1.0867 0.7104
1080.95 14.28 43.16 46.50 207.70 848.95
1074.57 14.19 42.38 45.81 205.20 840.93
1081.19 1069.05 1067.83 14.31 14.07 14.08 43.46 41.86 42.33 46.50 44.92 45.50 208.35 201.00 204.63 851.08 835.96 837.36
1059.43 13.99 41.82 44.99 202.74 831.40
1050.66 13.90 41.30 44.49 202.57 824.41
1076.93 14.25 43.30 46.45 207.55 848.28
1086.28 1094.78 14.33 14.43 43.89 44.49 46.85 47.64 208.66 210.60 854.80 861.31
Note: * Technical points have been studied in the beginning of the trading session. Therefore, since this report is published in the morning during the trading session, some of the points could be breached. A broken support is highlighted red, while a broken resistance is highlighted green. * Read USDJPY, USDCHF, USDCAD
ECONOMIC CALENDAR EFFECT
CY
TIME (LT) CNTRY
EVENT
ADDITIONAL POINTS PERIOD ACTUAL FORECAST
PRIOR
Wednesday, November 25 ●●
EUR
9:45
FR
Consumer Confidence
●●●
USD
14:00
US
MBA Mortgage Applications
●●●
USD
15:30
US
●●●
USD
15:30
●●
USD
15:30
●●●
USD
●●●
> U.S.: Thu., Thanksgiving Day
Nov
--
95
96
Nov-20
--
--
6.20%
Personal Income
Oct
--
0.40%
0.10%
US
Personal Spending
Oct
--
0.30%
0.10%
US
PCE Core YoY
Oct
--
1.40%
1.30%
15:30
US
Durable Goods Orders
Oct P
--
1.60%
-1.20%
USD
15:30
US
Durables Ex Transportation
Oct P
--
0.30%
-0.40%
●●●
USD
15:30
US
Initial Jobless Claims
Nov-21
--
270k
271k
> Germany: Thu., Gfk Consumer Climate; Fri., Import Price Index
●●
USD
16:45
US
Markit US Services PMI
Nov P
--
55.1
54.8
> Canada: Fri., RMPI
●●●
USD
17:00
US
New Home Sales
Oct
--
500k
468k
> Japan: Fri., Inflation
●●
USD
17:00
US
New Home Sales MoM
Oct
--
6.80%
-11.50%
●●●
USD
17:00
US
U. of Mich. Sentiment
Nov F
--
93.1
93.1
●●
NZD
23:45
NZ
Trade Balance
Oct
--
-1000m
-1222m
●●
OIL
17:30
OIL
EIA Crude Oil Inventories
1.200M
0.252M
●●
OIL
17:30
OIL
EIA Weekly Distillates Stocks
-0.417M
-0.791M
●●
OIL
17:30
OIL
EIA Weekly Gasoline Inventories
0.938M
1.009M
> Australia: Thu., Private CAPEX > U.K.: Tue., Inflation, CPI, PPI; Thu., Retail Sales > Eurozone: Fri., Consumer Confidence
Tuesday, November 24 ●●●
EUR
11:00
GE
IFO Business Climate
Nov
104.7
108.2
108.2
●●●
EUR
11:00
GE
IFO Current Assessment
Nov
113.4
112.4
112.6
●●●
EUR
11:00
GE
IFO Expectations
Nov
109.0
104
103.8
●●●
USD
15:30
US
GDP Annualized QoQ
3Q S
2.10%
2.10%
1.50%
●●
USD
15:30
US
Personal Consumption
3Q S
3.00%
3.20%
3.20%
●●●
USD
15:30
US
GDP Price Index
3Q S
1.30%
1.20%
1.20%
●●
USD
16:00
US
S&P/CS Composite-20 YoY
Sep
5.50%
5.10%
5.09%
●●●
USD
17:00
US
Consumer Confidence Index
Nov
90.4
99.5
97.6
●●●
USD
17:00
US
Richmond Fed Manufact. Index
Nov
-3
1
●●
OIL
23:35
OIL
API Weekly Crude Oil Stock
2.600M
APPENDIX
»
Copyright: Bank of Beirut 2015 - Research Department - Global Markets Division
-1 -0.482M
DAILY MARKET UPDATE
CURRENCIES & COMMODITIES Wednesday, November 25, 2015 MAIN
APPENDIX & DISCLAIMER
APPENDIX ECONOMIC CALENDAR (page 3) INDICATORS
MEANING
●
LOW impact
●●
MEDIUM impact
●●●
HIGH impact
Green figure
BETTER than expected
Red figure
WORSE than expected
Black figures
AS expected
COUNTRY
CODE
CURRENCY
COUNTRY
AU
AUD
AUSTRALIA
CA
CAD
CANADA
CH
CNY
CHINA
EC
EUR
EURO ZONE
FR
EUR
FRANCE
EUR
GERMANY
IT
EUR
ITALY
TIME
JN
JPY
JAPAN
Report Original Time
NO
NOK
NORWAY
GMT
LT - 2 hrs
NZ
NZD
NEW ZEALND
U.K.
LT - 2 hrs
SA
ZAR
SOUTH AFRICA
GERMANY
LT - 1 hrs
SP
EUR
SPAIN
CYPRUS
LT + 0 hrs
SW
SEK
SWEDEN
OMAN
LT + 2 hrs
SZ
CHF
SWITZERLAND
U.A.E.
LT + 2 hrs
UK
GBP
UNITED KINGDOM
AUSTRALIA
LT + 9 hrs
US
USD
UNITED STATES
LEBANON (LT)
2
3
4
COUNTRY CODES
GE
WORLD TIMING
1
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