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TradeTheNews.com US Market Update: Russian Ruble Melts Down
Tue, 16 Dec 2014 11:22 AM EST
- (US) Federal Reserve FOMC begins
- (US) ICSC Chain Store Sales w/e Dec 12th: w/w: +3.0%; y/y: +1.1%
- (HU) Hungary Central Bank (NBH) left Base Rate unchanged at 2.10% (as
- (PL) Poland Nov CPI Core M/M: -0.1% v 0.0%e; Y/Y: 0.4% v 0.5%e
- (PL) Poland Nov Average Gross Wages M/M: % v 1.5%e; Y/Y: % v 3.6%e
- (PL) Poland Nov Employment M/M: % v 0.1%e; Y/Y: % v 0.8%e
- (US) Nov Housing Starts: 1.028M v 1.040Me; Building Permits: 1.035M v 1.065Me
- (CA) Canada Oct Manufacturing Sales M/M: -0.6% v -0.3%e
- (CA) Canada Oct Int'l Securities Transactions: C$9.5B v C$4.0Be
- (US) Redbook Retail Sales w/e Dec 12th: +4.1% y/y, Dec MTD: -1.2% m/m; Dec
MTD: +4.0% y/y
- (EU) Weekly ECB Forex Reserves: €230.5B v €231.9B prior
- (US) Dec Preliminary Markit
Manufacturing PMI: 53.7 v 55.2e
Russia is in crisis this morning as the Ruble collapse whips around a wide
spectrum of global asset classes. The
10-year UST yield dropped as low as 2.01% before trading to 2.08%, while the
10-year Bund remains just off record lows at 0.599%. European stocks zigzagged
through the session, while the S&P500 has dug itself out of the red as
smaller energy stocks bounce higher with a small move up in crude prices,
propelling US indices to their highs. Almost unmentioned today is the beginning
of the last FOMC meeting of 2014. As of writing, the DJIA is up 0.83%, the
S&P500 is up 0.43% and the Nasdaq is up 0.30%.
The dramatic collapse of the Russian Ruble is in sharp focus this morning. The ruble had gained around 8% after the
Russian Central Bank raised rates by 650 basis points to 17% from 10.5% on
Monday afternoon (early Tuesday morning local time), but those gains vaporized
as USD/RUB shot up to 79 and then settled around 72.80 in mid-morning trade.
The ruble is now down by more than 20% against the dollar on the week and down
by 56% YTD.
The preliminary December Markit manufacturing
PMI survey fell to 53.7, its lowest level since the Polar Vortex back in
January. Analysts note this is the fourth sequential monthly decline
from the record highs seen in August and also the fourth miss of expectations.
The employment sub-index dropped to its lowest level since July and new orders
are also at their lowest level since Janauary.
WTI futures bottomed out below $54 this
morning and have bounced a bit higher over the last three hours, trading as
high as $56. Brent bottomed around $58.60 before going back above $60.
The bounce in oil has propelled multiple smaller drillers much higher this
morning, while oil services ETF OIH has bounced up 3.9%. For reference, Range
Resources is up 8% and Rex Energy is up 12%.
Investment bank Jefferies Group LLC
(owned by Leucadia National) reported a quarterly net loss and said it was
looking to sell off its recently purchased futures brokerage, Bache.
Jefferies bought the business from Prudential Financial in 2011 to expand into
a full-fledged investment bank. In the quarter Jefferies' investment banking
revenue fell 24% to $316 million, with executives citing lackluster fixed
income trading in a tepid trading environment.
- 16:00 (KR) South Korea Nov PPI Y/Y: No est v -0.7% prior
- 16:30 (US) Weekly API Crude Oil
- 18:50 (JP) Japan Nov Trade Balance: -¥992.0Be v -¥736.9B prior; Adjusted
Trade Balance: -¥982.8Be v -¥977.5B prior; Exports Y/Y: 7.0%e v 9.6% prior;
Imports Y/Y: 1.6%e v 3.1% prior (revised from 2.7%)
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