Fundamental Analysis – 02/12/2015

Good Morning,

Expectations are high that Friday's meeting of the Organization of the Petroleum Exporting Countries in Vienna will choose to continue pumping crude at record levels to defend market share against non-member oil producers such as the United States and Russia. Gold prices slipped on Tuesday as gains in equities and the anticipation of further stimulus efforts in Europe lessened investor appetite for the store of value metal. U.S. stocks advanced on Tuesday with the S&P 500 closing above 2,100, its highest level in four weeks. The Federal Reserve's policy meeting will be held this month, at which it is widely expected to raise interest rates for the first time in nearly a decade. United States Markit Manufacturing PMI registered at 52.8 above expectations (52.6) in November. There is a risk of a collapse in housing prices if oil falls to 35.00 a barrel and remains there for five years, triggering unemployment of 12.50% in Canada, according to Canada Mortgage and Housing Corporation. USDCHF is trading at 1.0269 while USDCAD is trading at 1.3368.

GBPUSD stared December at the bottom of its trading range as the greenback remains strong. EURGBP ended November at 0.7019 as EUR weakened on comments from the ECB ahead of the December meeting as Draghi promises additional stimulus. The ECB will publish minutes from its October policy meeting, which firmed up bets that the ECB will ease monetary policy when President Mario Draghi pledged to fend off threats to Europe's growth and inflation outlook. Position squaring and aggressive short covering helped drive EURUSD sharply higher on Tuesday. EUR recovered from a multi month low against USD on Tuesday as investors pared bets that the European Central Bank will soon ease policy further, while crude oil remained under pressure from oversupply concerns. The benchmark DAX index at the Frankfurt Stock Exchange on Tuesday closed down by 120.99 points at 11.270,50 points. EURCAD is trading at 1.4197 while EURGBP is trading at 0.7045.

AUDUSD recovered a few points over the last few trading days of the month, weighed down by a month of lackluster Chinese data and the growing USD. USDJPY closed November towards the top of its monthly trading range at 123.12 as the greenback soared the last week of the month as a rate increase in the US remained imminent. U.S. representatives at the International Monetary Fund and Congress itself had very little choice regarding the Chinese renminbi inclusion as new reserve currency. Effective October 1, 2016, CNY will become part of the Special Drawing Rights, the benchmark currency basket of the IMF. GBPCHF is trading at 1.5476 while EURCHF is trading at 1.0910.

Daily Performances (4.00 am. GMT); 

I hope you all have a nice day.

All the figures are as at the writing time.