Fundamental Analysis – 01/12/2015

Good Morning,

Canada Current Account came in at -16.21B below forecasts (-15.1B) in 3Q. Gold hovered near a six year low on Monday, preparing for a sharp monthly loss in November as the Federal Reserve prepares for a rate hike next month. Ever since last week, EURUSD market has been pricing in the possibility that the ECB will announce, not only an extension of its QE, but further negative deposit rates in a desperate move to boost local growth. Oil prices fell Monday after government data showed U.S. production is falling more slowly than expected. OPEC is set to hold its next meeting on Friday. USDCAD is not too far from the highs and this is tied to falling oil prices. U.S. government bond yields rose in November, with the yield on the two year U.S. note posting the biggest monthly rise in more than five years. The financial directors of some of the world’s largest companies are unconvinced that the US Federal Reserve will raise interest rates this month, despite widespread expectations among investors and economists that the central bank will push ahead with the first increase in nearly ten years. United States Pending Home Sales (MoM) came in at 0.2% below forecasts (1.5%) in October. USDCHF is trading at 1.0291 while USDCAD is trading at 1.3356.

A weaker CNY midpoint fixing and a renewed selloff in Mainland Chinese markets have heightened fears that Friday’s selloff could merely be the beginning of a more significant correction for Chinese equities. BOJ Governor Haruhiko Kuroda on Monday reinforced the need to reinflate prices as a central bank priority. Asian shares dropped on Monday amid some worries ahead of China’s manufacturing and services data and as commodities remained weak. EURCAD is trading at 1.4107 while EURGBP is trading at 0.7015.

European markets finished mixed as of the most recent closing prices. The FTSE 100 lost 0.30%. The DAX gained 0.78% and the CAC 40 rose 0.56%. The global economic trade is down 8.4% so far this year. Denmark GDP falls for first time since 2013. The ECB will meet on Thursday and is widely expected to cut interest rates on EUR deposits and extend its quantitative easing program. Germany Consumer Price Index (MoM) meets forecasts (0.1%) in November. GBP traded near its lowest level in seven months against the USD on Monday after a BOE member supported low interest rates. UK net lending to individuals slipped to 4.8 billion GBP in October, in line with forecasts, from 4.9 billion GBP. GBPCHF is trading at 1.5488 while EURCHF is trading at 1.0870.

Daily Performances (4.00 am. GMT);

I hope you all have a nice day.

All the figures are as at the writing time.