Negative Tone in German GDP Growth

News Event

From Trading Economics: The German economy expanded a seasonally-adjusted 0.2 percent in the September quarter of 2016, compared to a 0.4 percent growth in the second quarter while market expected a 0.3 percent expansion, preliminary estimates showed. It was the weakest growth since the third quarter 2015, as positive contributions mainly came from domestic demand while foreign trade had a downward effect on growth. Year-on-year, the GDP advanced 1.5 percent, much slower than a 3.1 percent growth in the previous three months and below consensus of a 1.8 percent expansion.

Market Snap

Market Opening Wrap

In Asian Equity Markets Japan's Nikkei index ended marginally lower in choppy trade on Tuesday as investors took profits from sharp gains in the past few days, offsetting gains in banking stocks, which rose on better-than-expected half-year earnings. The Nikkei fell 0.03 percent to 17,668.15 after opening a tad higher, while the broader Topix gained 0.2 percent at 1,402.98. The JPX-Nikkei Index 400 added 0.3 percent to 12,615.04. MSCI's broadest index of Asia-Pacific stocks outside Japan was broadly flat. Indian stocks and Australian shares led regional losers with declines of 1.4 and 0.4 percent respectively. Hong Kong stocks rose 0.5 percent, boosted by expectations of strong earnings from index heavyweight Tencent.

In Currency Markets the dollar traded within sight of its highest level in more than 13-1/2 years on Tuesday as bond yields rose on expectations that President-elect Donald Trump's economic policies will fuel inflation. The dollar eased 0.3 percent to 108.12 yen, pulling back a bit from Monday's five-month high of 108.545 yen. The euro edged up 0.1 percent to $1.0751, taking a breather after falling to as low as $1.0709 on Monday, its lowest level since December. The onshore Chinese yuan fell to its weakest level in nearly eight years on Tuesday, breaking through 6.85 per dollar. The dollar index last traded at 99.883. On Monday, it had risen as high as 100.22.

In Commodities Markets oil prices rose around 2 percent on Tuesday to move away from multi-month lows struck the day before, pushed higher by expectations of falling shale output and renewed optimism that OPEC will deliver on touted production cuts. U.S. crude futures for December delivery had climbed 2.1 percent, to $44.22 a barrel. They struck their lowest in nearly two months the session before. January Brent futures were up 1.9 percent, at $45.24 per barrel. Spot gold was up 0.4 percent at $1224.76 an ounce. Among other precious metals, silver was up 0.9 percent at $17.02 per ounce. Palladium was down 0.2 percent at $696.80 an ounce and platinum was up 0.65 percent at $936.75 an ounce.

In US Equity Markets  stocks closed little changed on Monday after rising dramatically the week before and a decline in the technology sector offset a steep rise in financial stocks as investors bet on higher interest rates. The Dow Jones industrial average closed up 0.11 percent, to 18,868.69, the S&P 500 lost 0.01 percent, to 2,164.2 and the Nasdaq Composite fell 0.36 percent, to 5,218.40. Apple fell 2.5 percent and weighed the most on the Nasdaq and the S&P 500, followed by Facebook and Microsoft. The financial index rose 2.3 percent, with banks including Bank of America JPMorgan providing the biggest boost. Harman International rose 25.2 percent after Samsung Electronics announced an $8 billion deal to buy the company.

In Bond Markets Japanese government bonds fell on Tuesday, pushing the benchmark yield up to zero percent for the first time in eight weeks, after results of a 5-year auction fell short of market expectations. The 10-year JGB yield added 2 basis point (bp) to zero percent, its highest level since Sept. 21, the day the Bank of Japan announced its current monetary policy of guiding the 10-year yield around the zero percent mark. Benchmark 10-year JGB futures were down 0.19 point at 150.91 in afternoon trade after earlier falling to 150.88, their lowest since Aug. 2.

Source: Institute of Trading and Portfolio Management