December 14, 2016


Time (GMT) Currency Event Previous Forecast
00:50 JPY Tankan Manufacturing Index 10 6
00:50 JPY Tankan Non-Manufacturing Index 18 19
10:30 GBP Average Earnings Index 3m/y 2.3% 2.3%
10:30 GBP Claimant Count Change 9.8K 6.2K
10:30 GBP Unemployment Rate 4.8% 4.8%
13:15 GBP BOE Gov Carney Speaks
14:30 USD Core Retail Sales m/m 0.8% 0.4%
14:30 USD PPI m/m 0.0% 0.1%
15:15 USD Capacity Utilization Rate 75.3% 75.1%
15:15 USD Industrial Production m/m 0.0% -0.2%
16:30 USD Crude Oil Inventories -2.4M
20:00 USD FOMC Economic Projections
20:00 USD FOMC Statement
20:00 USD Federal Funds Rate <0.50% <0.75%
20:30 USD FOMC Press Conference


Global Commentary

Asian markets were mostly higher in muted action on Tuesday as investors were preparing for the U.S. Federal Reserve meeting which ends Wednesday night in the U.S.  Japan’s Nikkei led the gains as it extended its rally to a sixth consecutive session with a gain of 0.50%.  The S&P/ASX 200 in Australia bucked the trend higher, losing 0.32% for the day.  Mainland China’s Shanghai Composite posted a modest gain of 0.07% after the country posted encouraging economic data.  In Hong Kong the Hang Seng finished 0.06% higher as it followed the gains on mainland China.  South Korea’s Kospi was up by 0.43%, and in Singapore the Straits Times Index gained a modest 0.10%.  European markets jumped back to an eleven month high, erasing the losses from the previous session as the Italian banking sector led the gains.  The pan-European Stoxx Europe 600 ended the session 1.06% higher, with the German DAX advancing 0.84% and the CAC 40 in France up by 0.91%.  Bank shares in the U.K. also scored good gains as the FTSE in London added 1.13% and climbed to a six week high.  Markets in the U.S. all closed at record levels as investors prepare for the Wednesday monetary policy statement from the Federal Reserve.  At the close the S&P 500 was up by 0.65%, the Nasdaq added 0.95%, and the Dow closed just shy of the 20,000 level with a gain of 0.58%.



EUR – The Euro dropped against the USD on Tuesday, while ending the day unchanged versus the Yen and Pound as traders get ready for the upcoming Federal Reserve monetary policy decision on Wednesday.

GBP – The Pound was unchanged against the Yen and Euro on Tuesday, while softening versus the USD.

USD – The USD firmed broadly but modestly versus rival currencies on Tuesday as traders are still betting on an interest rate hike coming from the Federal Reserve monetary policy meeting.

JPY – The Yen softened against the USD, while ending the day unchanged versus the Euro and Pound.

TRY – The Lira fell broadly against major currencies on Tuesday after Turkey reported the first year-on-year drop in growth since 2009, with third quarter GDP for 2016 coming in 1.8% lower than the same period in 2015.

RUB – The rally in the Ruble continued for a fourth consecutive session Tuesday, with the Russian currency firming broadly against major currencies.



Metals – Precious metals fell on Tuesday, with gold hitting a ten month low as traders are gearing up for a Federal Reserve rate hike late Wednesday.  Gold for February delivery fell $6.80, or 0.6%, to settle at $1,159 an ounce.  March silver shed $0.21, or 1.2%, to finish at $16.977 an ounce.

Oil – Crude edged higher on Tuesday as traders remain bullish following the additional OPEC production cuts announced over the weekend.  January West Texas Intermediate crude tacked on $0.15, or 0.3%, to settle at $52.98 a barrel.



S&P500 – The S&P 500 began the day higher in response to the rally in European banking shares and continued higher throughout the day despite the looming Federal Reserve meeting and likely interest rate hike.  At the close the S&P was at a new record closing high as it tacked on 0.65% for the day.

DAX – The German benchmark index began the day with a strong gain.  There was a pullback as the market entered the afternoon, but the DAX recovered and moved back near session highs.  The final hours of trading saw the index turn a bit choppy, but it finished the day near its session high with a gain of 0.84%.

Nikkei – The Nikkei began the day in the red as investor sentiment was soured by the overnight weakness of global equity markets and a stronger Yen against the USD.  As the Yen weakened during the Asian session the Nikkei moved higher, and by the lunch break it was back at unchanged levels.  It continued higher throughout the afternoon, gaining steadily to post a 0.50% gain and its sixth consecutive winning session.



Tesla Motors, Inc. – Shares of the electric automaker are one of those that haven’t reacted to the so-called “Trump Effect” rally since November, and instead continue to edge lower.  The stock hit a high of $265.42 back in April and has been declining since.  Most recently it seems to be stuck in a range of $180-200 a share, and has been unable to break through the resistance at the top of the range, even as market indices race to new record high levels.  Tuesday was a good day for the stock as it added 2.97% following a report that it will deliver the most cars ever in an annual period for 2016.  The news should help silence critics who thought Tesla would be unable to top its previous sales figures, and Tuesday’s gain puts the stock right below the $200 resistance level.  If the stock breaks through that resistance we’ll be looking for a move to the $235 level, but if it fails yet again it will most likely head down to test the support at the $180 level.

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