Market Roundup
- EUR/USD -0.44%, USD/JPY 0.39%, GBP/USD -0.23%, EUR/GBP -0.19%
- DXY 0.36, DAX -0.01%, FTSE -0.23%, Brent -0.37%, Gold -0.39%
- Germany Sept Industrial Output MM -1.6% vs 2.6%, forecast -0.8%
- Great Britain Oct Halifax House Prices MM 0.3% vs 0.8%, forecast 0.2%
- Great Britain Oct Halifax house Prices 3M/YY 4.5% vs 4%, forecast 4.5%
- EZ Sept Retail Sales MM 0.7% vs -0.5%, forecast 0.6%
- EZ Sept Retail Sales YY 3.7% vs 1.2%, forecast 2.7%
- Great Britain Oct BRC Retail Sales YY -1% vs 1.90%
- Great Britain Oct BBA Mortgage Rate 4.31% vs 4.31%
- Britain introduces law seeking to help post-Brexit trade
- Catalonia's ex-leader urges unity as deadline for secessionist pact nears
- Bank of Italy sees economic growth close to 1.5 pct in 2019
- Oil eases but Saudi tensions keep 2-1/2 year highs in sight
Economic Data Ahead
- (1000 ET/1500 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of September. The report is expected to show job openings rose to 6.091 million from 6.082 million in August.
- (1000 ET/1500 GMT) The Investor's Business Daily (IBD)/ TechnoMetrica Institute of Policy and Politics (TIPP) will release U.S. Economic Optimism index for the month of November. The indicator rose to 50.3 in October.
- (1000 ET/1500 GMT) The National Institute of Economic and Social Research (NIESR) will report Britain's GDP estimate in the three months through October. The indicator rose 0.4 percent in the previous month.
- (1500 ET/2000 GMT) The U.S. Federal Reserve is likely to report that consumer credit rose to $18.50 billion in September from $13.06 billion the month before.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (1255 ET/1755 GMT) Bank of Canada Governor Stephen Poloz gives a speech at CFA Montreal and Montreal Council on Foreign Relations, followed by a press conference.
- (1315 ET/1815 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles participates in a discussion on financial regulation before the Clearing House Annual Conference.
- (1330 ET/1830 GMT) FedTrade Operation 15-year Fannie Mae / Freddie Mac (max $485 mn)
- (1330 ET/1830 GMT) Bank of England's Taylor speaks at RAC Club, London
- (1430 ET/1930 GMT) Federal Reserve Chair Janet Yellen gives acceptance remarks at a presentation of the Paul H. Douglas Award for Ethics in Government in Washington.
FX Beat
DXY: The dollar index rallied to a fresh 11-day high following a modest rebound in the U.S. Treasury bond yields. The greenback against a basket of currencies traded 0.3 percent up at 95.06, having touched a high of 95.15 earlier, its highest since Oct. 27. FxWirePro's Hourly Dollar Strength Index stood at 18.60 (Neutral) by 1000 GMT.
EUR/USD: The euro declined to multi-month lows after the European Central Bank President Mario Draghi stated that bad loans weighed on the balance sheets of eurozone banks and joint efforts were required from regulators, supervisors and national authorities to tackle it. The European currency traded 0.4 percent down at 1.1565, having touched a low of 1.1554 earlier in the session, its lowest since Jul. 20. FxWirePro's Hourly Euro Strength Index stood at -91.90 (Slightly Bearish) by 1000 GMT. After a week of consolidation, the pair has broken the low of 1.15742 made after US Nonfarm payroll. This confirms further weakness in Euro to continue and a dip till 1.1500/1.14235 (38.2% retracement of 1.04833 and 1.20925). On the higher side, minor bullishness can be seen only above 1.16630 (233- H MA and support turned into resistance) and any break above will take it to next level till 1.1720/1.1755.
USD/JPY: The dollar rallied towards an 8-month peak touched in the previous session, as strong U.S. economic data released before the weekend boosted expectations that the Federal Reserve will raise interest rates next month and tighten further in 2018. The major was trading 0.5 percent up at 114.25, having hit a high of 114.73 on Monday, its highest since Mar. 15. FxWirePro's Hourly Yen Strength Index stood at -60.37 (Bearish) by 1000 GMT. On the lower side, any close below 112.30 (233- day MA) confirms minor weakness, a decline till 111.60 (55- day EMA)/111.13 likely. Any convincing close above 114.50 (161.8% fib) confirms minor bullishness, a jump till 116 likely.
GBP/USD: Sterling eased as investors turned cautious ahead of Britain's next stage of negotiations on its departure from the European Union, which begins on Thursday. The major traded 0.2 percent down at 1.3147, having hit a low of 1.3039 on Friday, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at 86.01 (Slightly Bullish) by 1000 GMT. The pair is facing strong support a 1.30270 and any break below will drag the pair to next level till 1.300/1.2950. On the higher side, near-term resistance is around 1.3175-180 and any break above will take it till 1.3230. Against the euro, the pound was trading 0.2 percent down at 87.97 pence, having hit a low of 89.38 pence on Thursday, its lowest since Oct. 26.
USD/CHF: The Swiss franc eased, reversing most of its previous session gains, as a modest rebound in the U.S. Treasury bond yields extended support to the greenback. The major trades 0.3 percent up at 1.0002, having touched a high of 1.0037 last month, it’s highest since May. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at -60.49 (Bearish) by 1000 GMT. The near-term support stands at 0.9960 (55- 4H EMA) and any break below will drag the pair to next level till 0.9897 (100- 4H MA)/0.9860. The major resistance is around 1.0040 and any break above will take it to next level till 1.0100/1.0174.
AUD/USD: The Australian dollar fell below the 0.7700 handle, despite the RBA leaving interest rates unchanged at record low level of 1.5 percent and sounding less dovish in spite of recent disappointing inflation data. The Aussie trades 0.4 percent down at 0.7659 having hit a high of 0.7729 on Thursday; it’s highest since Oct. 25. FxWirePro's Hourly Aussie Strength Index stood at -98.34 (Slightly Bearish) by 1000 GMT. On the lower side, the pair should close below 0.7624 for further weakness. Any close below targets 0.7600/0.7550. The near-term resistance is around 0.7743 (23.6% fibo) and any break above targets 0.7775 (20- day MA)/0.7822 (55 – day EMA).
Equities Recap
European shares advanced, underpinned by gains among commodity stocks and a rebound in banks, while greenback advanced to a fresh 11-day high following a modest rebound in the U.S. Treasury bond yields.
The pan-European STOXX 600 index edged up 0.01 percent to 396.54 points, while the FTSEurofirst 300 index rose 0.05 percent to 1,559.70 points.
Britain's FTSE 100 trades 0.2 percent lower at 7,550.98 points, while mid-cap FTSE 250 eased 0.3 percent to 20,373.08 points.
Germany's DAX rose 0.1 percent at 13,488.38 points; France's CAC 40 trades 0.1 percent down at 5,504.43 points.
Commodities Recap
Crude oil prices steadied after rising to its highest level in over two years, supported by moves by Saudi Arabia's crown prince to tighten his grip on power. International benchmark Brent crude was trading 0.05 percent up at $64.07 per barrel by 1012 GMT, having hit a high of $64.62 earlier, its highest since July 2015. U.S. West Texas Intermediate was trading 0.2 percent up at $57.33 a barrel, after rising as high as $57.67, its highest since Jul. 2015.
Gold prices declined as investors locked in profits after it gained nearly 1 percent in the previous session on safe-haven buying. Spot gold was 0.4 percent at $1,276.00 per ounce as of 1016 GMT, having jumped nearly 1 percent on Monday, its biggest single-day percentage gain since Sept. 25. U.S. gold futures for December delivery fell 0.2 percent to $1,279.30 per ounce.
Treasuries Recap
The U.S. Treasuries continued to trend lower as investors wait to watch The Federal Reserve Chair Janet Yellen’s speech, scheduled to be held today by 19:30GMT. The yield on the benchmark 10-year Treasury rose nearly 1-1/2 basis points to 2.33 percent, the super-long 30-year bond yields surged close to 1 basis point to 2.80 percent and the yield on short-term 2-year note traded tad higher at 1.62 percent.
The German bunds traded tad lower despite a surprise drop in the country’s industrial production for the month of September, coming in at -1.6 percent m/m vs consensus estimates of -0.8 percent m/m, from +2.6 percent m/m in August. The German 10-year bond yields, which move inversely to its price, hovered around 0.34 percent, the yield on 30-year note remained flat at 1.21 percent while the yield on short-term 2-year traded steady at -0.76 percent.
The New Zealand bonds ended the session lower as investors wait to watch the GlobalDairyTrade (GDT) price auction, scheduled to be held on November 7. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.83 percent, the yield on the 20-year note also slid 1 basis point to 3.35 percent and the yield on short-term 2-year too traded 1 basis point lower at 2.00 percent.
The Australian bonds slumped on expectations of a hawkish monetary policy statement from the Reserve Bank of Australia (RBA) while keeping its benchmark interest rate unchanged at 1.50 percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2basis points to 2.559 percent, the yield on the long-term 30-year note rose nearly 1 basis point to 3.359 percent and the yield on short-term 2-year jumped over 2 basis points to 1.792 percent.
