The Japanese Yen was the major currency yesterday that was strong across the board, despite the weekend election victory for Shinzo Abe. USDJPY continued to post declines along with other JPY crosses in a clear risk aversion trade ahead of the two day FOMC meeting that starts today. The Greenback eased with the EURUSD managing to continue its upside gains. Other weaker currencies such as the GBP and the AUD and the CAD however could not capitalize on this.
Crude Oil futures were back in the news yesterday after prices dropped to the lowest levels, trading near the $55 mark which has taken a toll on currencies such as the NOK and the CAD which are exposed to Oil prices.
The Russian Ruble hit an all time high and was trading near $64 to a Ruble yesterday which prompted the CBR to hike interest rates overnight by 650bps to bring the Russian interest rates to 17% in an effort to ease the ever weakening Ruble which has been hit by sanctions and falling oil prices.
Gold futures eased back in late trading session yesterday dropping below $1200 handle but price looks to be well supported in the major support/resistance zone. A daily close higher today could potentially see Gold rise to as much as $1250 levels in the near term.
Economic data is packed today with flash PMI releases for Eurozone and Uk inflation data. BoE Governor Mark Carney is also expected to give a speech followed by some modest data from the US.
Fundamentals Recap – December 15, 2014
• Japan, Tankan manufacturing index 12 vs. 13; Tankan non-manufacturing index 16 vs. 14
• Australia new motor vehicle sales m/m -0.6%
• German Bundesbank monthly report
• UK CBI industrial orders expectations rises to 5 vs. expectations of 3
• US Empire state manufacturing index declines -3.6 vs. 12.1 expectations
• US Capacity utilization rate beats estimates of 79.4%, rising to 80.1%
• US Industrial production m/m rises above estimates of 0.8% to 1.3%
• US NAHB housing market index declines to 57
• TIC long term purchases down -1.4bn
Fundamentals – December 16, 2014
• RBA monetary policy minutes
• Japan flash manufacturing PMI soft at 52.1 vs. 52.3 estimates
• China, HSBC flash manufacturing PMI soft at 49.5 vs. 49.8 estimates
• UK Bank stress test results
• BoE financial stability report
• French flash manufacturing PMI to rise to 48.7, services PMI to rise 48.6
• German flash manufacturing PMI to rise to 50.4, services PMI to rise to 52.6
• Eurozone flash manufacturing PMI to rise to 50.5, services PMI to rise 51.6
• BoE Mark Carney speech
• UK CPI y/y to be soft at 1.2%, Core CPI y/y to be unchanged at 1.5%
• German ZEW economic sentiment to rise to 19.8, Eurozone ZEW economic sentiment to rise to 20.1
• Canada manufacturing sales m/m to decline -0.4%
• US building permits to be soft at 1.06mn; housing starts to rise 1.04mn
• US Flash manufacturing PMI to rise to 56.1