Economic Data Ahead
- (0315 ET/0815 GMT) France Markit Manufacturing Flash PMI
- (0315 ET/0815 GMT) France Markit Service Flash PMI
- (0315 ET/0815 GMT) France Markit Composite Flash PMI
- (0330 ET/0830 GMT) Germany Markit Manufacturing Flash PMI
- (0330 ET/0830 GMT) Germany Markit Service Flash PMI
- (0330 ET/0830 GMT) Germany Markit Composite Flash PMI
- (0400 ET/0900 GMT) Euro Zone Markit Manufacturing Flash PMI
- (0400 ET/0900 GMT) Euro Zone Markit Service Flash PMI
- (0400 ET/0900 GMT) Euro Zone Markit Composite Flash PMI
- (0430 ET/0930 GMT) UK Markit Manufacturing Flash PMI
- (0430 ET/0930 GMT) UK Markit Service Flash PMI
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index eased as investors remained cautious over the health of the U.S. economy after data released on Friday showed retail sales increased less than expected in November. The greenback against a basket of currencies traded 0.2 percent down at 97.01, having touched a low of 96.59 on Thursday, its lowest since July 1.
EUR/USD: The euro steadied after tumbling from a 4-month peak in the previous session on news that European Union leaders postponed a package of reforms to safeguard the eurozone from a new crisis. The European currency traded 0.2 percent up at 1.1136, having touched a high of 1.1199 on Friday, its highest since August 13. Investors’ attention will remain on a series of data from the eurozone economies and EZ Markit prelim PMI's, ahead of the U.S. Markit PMI's and NAHB housing market index. Immediate resistance is located at 1.1156, a break above targets 1.1179. On the downside, support is seen at 1.1106, a break below could drag it below 1.1083.
USD/JPY: The dollar rose, extending previous session gains, after the United States and China announced a phase one trade agreement and suspended some tariffs on each other's goods that were due to go into effect on Sunday. The major was trading 0.1 percent up at 109.38, having hit a high of 109.70 on Friday, its highest since Dec. 2. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Markit PMI's and NAHB housing market index. Immediate resistance is located at 109.60, a break above targets 109.92. On the downside, support is seen at 109.07, a break below could take it near at 108.82 (10-DMA)..
GBP/USD: Sterling surged, extending gains above the 1.3300 handle following Johnson’s win of a commanding majority in Britain’s Parliament, giving him the power to deliver a clear exit from the European Union. The major traded 0.5 percent up at 1.3386, having hit a high of 1.3514 on Friday, it’s highest since May 2018. Investors’ attention will remain on the development surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3446, a break above could take it near 1.3472. On the downside, support is seen at 1.3195, a break below targets 1.3132. Against the euro, the pound was trading 0.2 percent up at 83.19 pence, having hit a high of 82.75 on Friday, it’s highest since July 2016.
AUD/USD: The Australian dollar declined, extending previous session losses after Australia’s conservative government cut its outlook for growth in the economy and wages as part of an A$33 billion downgrade to expected revenues over the next four years. The budget surplus for the fiscal year to June 2020 is now seen at A$5 billion, down from A$7.1 billion previously. The Aussie trades 0.05 percent down at 0.6871, having hit a high of 0.6938 on Monday, it’s highest since July 26. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6847, a break below targets 0.6823. On the upside, resistance is located at 0.6913, a break above could take it near 0.6955.
NZD/USD: The New Zealand dollar eased below the 0.6600 handle, as traders took profits following sharp rallies in recent weeks. The Kiwi trades 0.05 percent down at 0.6587, having touched a high of 0.6635 on Friday, its highest level since July 29. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6661, a break above could take it near 0.6689. On the downside, support is seen at 0.6572 (5-DMA), a break below could drag it below 0.6552 (10-DMA).
Equities Recap
Asian shares rallied to an 8-month peak after the United States and China agreed on a preliminary trade deal.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent.
Tokyo's Nikkei eased 0.3 percent to 23,952.35 points, Australia's S&P/ASX 200 index gained 1.6 percent to 6,849.70 points and South Korea's KOSPI declined 0.1 percent to 2,167.93 points.
Shanghai composite index surged 0.4 percent to 2,978.94 points, while CSI 300 index traded 0.3 percent up at 3,980.72 points.
Hong Kong’s Hang Seng traded 0.4 percent higher at 27,587.02 points. Taiwan shares added 0.1 percent to 11,939.77 points.
Commodities Recap
Crude oil prices steadied after rising to near 3-month highs in the previous session after the United States and China agreed to an initial trade deal stoking oil demand and boost trade flows. International benchmark Brent crude was trading 0.2 percent up at $65.01 per barrel by 0549 GMT, having hit a high of $65.77 on Friday, its highest since September 17. U.S. West Texas Intermediate was trading 0.1 percent up at $59.82 a barrel, after rising as high as $60.45 on Friday, its highest since September 17.
Gold prices consolidated within narrow ranges after the United States and China agreed to a phase one trade deal that sent investors towards riskier assets. Spot gold was trading flat at $1,475.81 per ounce by 0554 GMT, having touched a high of $1486.62 on Thursday, its highest since November 7. U.S. gold futures were down 0.2 percent at $1,478.80.
Treasuries Recap
The Japanese government bonds were little changed as investors refrained from taking big positions before a Bank of Japan meeting ending on Thursday. The benchmark 10-year JGB futures fell 0.01 point to 152.27. The 10-year JGB yield was flat at minus 0.025 percent, while the 20-year JGB yield fell 1 basis point to 0.280 percent. The 10-year yield reached a three-year low of minus 0.30 percent in September. The 30-year JGB yield was unchanged at 0.425 percent. The five-year yield was flat at minus 0.130 percent. The two-year JGB yield held steady at minus 0.135 percent.
The Australian government bond futures rose, with the three-year bond contract up 4.5 ticks at 99.270. The 10-year contract added 9.25 ticks to 98.8275.
The New Zealand government bonds gained, sending yields about 4 basis points lower across the curve.
