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Top 5 Things to Know in the Market on Tuesday

Published 11/15/2016, 05:56 AM
© Reuters.  Top 5 Things to Know Today In Financial Markets

Investing.com - Here are the top five things you need to know in financial markets on Tuesday, November 15:

1. Dollar dips after soaring to 11-month highs

The U.S. dollar weakened against a basket of major currencies on Tuesday, with investors locking in profits after a recent rally that drove the greenback to the strongest level since December 2015.

The dollar index was recently down 0.35% at 99.67 by 5:55AM in New York (10:55GMT). On Monday, the index hit an 11-month peak of 100.24, amid expectations for an interest rate increase next month and increased fiscal spending under a Trump administration.

Against the yen, the dollar was down 0.2% at 108.23, pulling back from Monday’s five-month peaks of 108.53.

The euro also moved higher, with EUR/USD rising 0.5% to 1.0793, coming off Monday’s eight-month trough of 1.0708.

Meanwhile, China’s yuan continued to slide, hitting its lowest level in almost eight years.

2. Bond market sell-off pauses as Treasuries, Bunds recover

Global bond prices were higher for the first time in almost a week on Tuesday, pushing yields off multi-month peaks as the "Trumpflation" trade began to fade.

The yield on the U.S. 10-year Treasury was down 3.5 basis points at 2.187% during early morning hours in New York, after rising to as high as 2.302% the day before, a level not seen since January 6.

The yield on the 10-year note was below 1.8% in the days leading up to the election. The 41 basis point jump over the last three trading sessions marked the steepest climb in more than seven years.

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Meanwhile, the 30-year yield dipped 5.1 basis points to 2.932%, after touching 3.080% in the prior session.

U.S. yields have been on a tear following Donald Trump's U.S. election win last week, as traders reassessed the implications of a Trump presidency, with many seeing it ushering in higher economic growth and rising inflation.

Elsewhere, in Europe, yields on 10-year German Bunds were down 3.2 basis points to 0.300%. On Monday, the yield rose to 0.397%, the strongest since late-January.

3. U.S. retail sales, Fed speakers ahead

Investors focused on the next set of U.S. data to see whether it supports expectations that the Federal Reserve will raise interest rates before the end of the year.

The most important piece of data Tuesday are October retail sales at 8:30AM ET (13:30 GMT). The consensus forecast is that the report will show retail sales rose 0.6% last month. Core sales are forecast to inch up 0.5%.

Besides the retail sales report, the U.S. will also release data on import prices and the Empire State survey at 8:30AM ET (13:30GMT), while business inventories are out at 10:00AM ET (15:00GMT).

There are also a flurry of Fed speakers Tuesday, ahead of Fed Chair Janet Yellen's congressional testimony Thursday.

Boston Fed President Eric Rosengren is due to speak at 8:00AM ET (13:00GMT), Fed Governor Daniel Tarullo at 9:05AM ET (14:05GMT), Fed Vice Chair Stanley Fischer at 1:30PM ET and Dallas Fed President Rob Kaplan also at 1:30PM ET (18:30GMT).

Markets are currently pricing an 81.1% chance of a rate hike at the Fed's December 13-14 meeting, according to Investing.com's Fed Rate Monitor Tool.

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4. Oil prices spike on hopes for last-minute OPEC deal

Oil prices were higher on Tuesday, bouncing back from a three-month low as market players hoped major global oil producers will reach an agreement to cut output.

U.S. crude was up $1.14, or 2.63%, to $44.46 a barrel, while Brent tacked on 98 cents, or 2.21%, to $45.41.

Bloomberg reported that several OPEC members were engaged in a last-minute push to overcome divisions between the cartel’s biggest producers.

Qatar, Algeria and Venezuela are leading the push to finalize a deal, while Saudi Arabia, Iraq and Iran are at odds over how to share output cuts agreed at a September meeting in Algiers, according to a delegate familiar with the talks.

5. Base metals plummet as Trump trade slows

Base metals, such as copper, iron ore, zinc and nickel were in full-blown retreat on Tuesday, following sharp gains made in recent sessions on the back of expectations that a Donald Trump presidency could unleash a flood of infrastructure spending.

Copper dropped 2.3% to $2.463 a pound, pulling back from a 17-month high of $2.734.

Iron ore slid 9% in Singapore to $68.58 a metric ton, extending a decline from a two-year peak of above $80.00. The price soared by a record 27% last week.

Meanwhile, zinc fell 1.9% in London, reversing earlier gains and retreating from the highest level in almost seven years.

Latest comments

Correction - sorry about the last comment, I misread the article. It is not so obvious that the author meant to say that base metals were hit by a bout of profit taking, at least that is the only reason I can think of why base metals retreated so sharply today
A market price doesn't move because of news. Recommended master of the markets by Tom Williams
That is correct as there really is not any other catalyst influencing this drop of prices for base metals. The infrastructure plan is still in place which continues to provide a substantial boost to base metal prices. There is also a rising demand for these base metals in China.
Can someone please explain the logic behind saying that the fall in base metals is due to the expectations that Trump will pour money into U.S. infrastructure - shouldnt the idea that soon there will be great demand for base metals mean that the prices should jump!
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