Market Roundup
- PBOC fixes CNY at 6.9042 vs USD, reports China state-owned banks selling USD onshore, offshore (CNH=D3) off from 6.9445 to 6.9200, Thursday 6.9650 high.
- China NRDC promoting healthy development of outbound investment, but outflow fears grow – Xinhua, Reuters.
- Foreign CB US debt holdings +$1.044 bln to $3.120 trln Nov 23 week, Treasury holdings -$891 mln to $2.798 trln, agencies +$2.403 bln to $262,063 bln.
- NY Fed – Swaps with foreign CBs $201 mln Nov 23 wk, ECB $200 mln, BoJ $1 mln.
- Lipper – Investors pull another $595 mln from US-based bond funds.
- US crowds pick up slightly on Black Friday, online sales jump – Reuters.
- BoE’s Carney wants lengthy Brexit transition for UK firms – Sunday Times.
- Francois Fillon wins French Republican primary, trouncing Alain Juppe - Zerohedge.
- Renzi faces pressure to stay in office as Italy referendum defeat looms.
- Fears mount of multiple bank failures if Renzi loses referendum – FT
- ECB Coeure – Vital that Greece bailout succeeds, fourth not an option.
- Saudi EnergyMin – Oil market would balance even without output cuts –Reuters.
Economic Data Ahead
- (0200 ET/0700 GMT) Norway Oct retail sales ex-autos, +0.4% forecast; last -0.3%.
- (0330 ET/0830 GMT) Sweden Oct trade balance; last SEK3.2 bln surplus.
- (0330 ET/0830 GMT) Sweden Oct retail sales, +0.5% m/m forecast; last -0.6% m/m, +0.6% y/y.
- (0400 ET/0900 GMT) Eurozone Oct money supply M3, +5.0% AR, last +5.0%.
- (0400 ET/0900 GMT) Eurozone Oct loans to non-financials/households; last +1.9%, +1.8%.
- (0400 ET/0900 GMT) Italy Nov mfg business confidence index; last 103.0.
- (0500 ET/1000 GMT) Eurozone Nov economic sentiment index, 107.0 forecast; last 106.3.
- (0500 ET/1000 GMT) Eurozone Nov business climate index, 0.57 forecast; last 0.55.
- (0500 ET/1000 GMT) Eurozone Nov industrial sentiment index, -0.5 forecast; last -0.6.
- (0500 ET/1000 GMT) Eurozone Nov services sentiment index, 12.5 forecast; last 12.0.
- (0500 ET/1000 GMT) Eurozone Nov consumer confidence index – final, -6.1 forecast; last -8.0.
- (1030 ET/1530 GMT) United States Nov Dallas Fed manufacturing business index; last -1.5.
Key Events Ahead
- N/A Norway NOK3 June 21, ’17 bln NST 35 bill auction.
- (0315 ET/0815 GMT) Riksbank DepGov Floden speaks in Stockholm.
- (0500 ET/1000 GMT) Italy E6 bln 6-month BOT auction.
- (0530 ET/1030 GMT) ECB ChiefEcon Praet speaks at Brussels ECFIN conference.
- (0845 ET/1345 GMT) Riksbank DepGov Ohlsson speaks in Stockholm.
- (0850 ET/1350 GMT) France E3.1-3.5/1.3-1.7/1.2-1.6 bln 3/6/12-mont BTF note auctions.
- (0900 ET/1400 GMT) ECB Pres Draghi testimony at Brussels ECON hearing.
- (1030 ET/1530 GMT) UK DMO quarterly consultation with GEMMs, end investors.
FX Beat
DXY: The dollar declined versus its major peers as the U.S. Treasury yields eased from recent highs. The greenback against a basket of currencies trades 0.6 percent down at 100.86, hovering away from a near 14 year high of 102.05 hit on Thursday. FxWirePro's Hourly Dollar Strength Index stood at -137.43 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro rose, extending gains from the previous session, as the U.S. Treasury yields continued to extend fall across the curve, dragging the greenback lower. The major initially climbed to an intra-day high of 1.0685, however, trimmed gains as selling in the dollar stalled across the board. The European currency trades 0.6 percent up at 1.0655, further pulling away from a low of 1.0518 hit on Thursday, its lowest since early Dec. FxWirePro's Hourly Euro Strength Index stood at 55.43 (Bullish) by 0400 GMT. Markets now await Eurozone's Business sentiment surveys and ECB President Draghi’s speech due later in the day for fresh impetus. Immediate resistance is located at 1.0700, a break above targets 1.0812 (21-DMA). On the downside, support is seen at 1.0538 (Previous Session Low), a break below could drag it near 1.0500.
USD/JPY: The dollar declined over 1 percent against the Japanese yen, as the U.S. Treasury yields eased from their recent peaks. The major slipped to an intra-day low of 111.35, as the greenback extended its corrective slide, however, it is seen making minor recovery as risk sentiment slightly improved amid a revival in oil prices and Asian equities. The pair trades 1.25 percent lower at 111.74, drifting further away from a high of 113.89 hit in the previous session, it’s strongest since late March. FxWirePro's Hourly Yen Strength Index stood at -122.15 (Highly Bearish) by 0400 GMT. Investors will continue to track movements in the treasury yields, ahead of Japan's economic data including unemployment report, retail sales and household spending figures. Immediate resistance is located at 113.53, a break above targets 114.00. On the downside, support is seen at 111.24 (9-EMA), a break below could take it lower 111.00.
GBP/USD: Sterling extended gains for the fourth consecutive session, hitting 2-week high above the 1.2500 handle as the greenback weakened across the board on a corrective slide. Data released on Friday confirmed that Britain's economy grew 0.5 percent in the third quarter, while business investment expanded more than expected, however, the report had little impact on the British currency. Sterling trades 0.3 percent up at 1.2509, having hit an early high of 1.2531, its highest since Nov. 14. FxWirePro's Hourly Sterling Strength Index stood at 5.43 (Neutral) by 0400 GMT. Markets focus remains on developments surrounding Europe political risks, amid a lack of macro fundamental drivers from the UK docket. Immediate resistance is located at 1.2550, a break above could take it near 1.2600. On the downside, support is seen at 1.2428 (21-DMA), a break below targets 1.2400. Against the euro, the pound trades 0.5 percent lower at 85.21 pence, having hit a high of 84.59 pence on Thursday, it’s highest since Sept.
AUD/USD: The Australian dollar rose, extending gains for the third consecutive session, as a rebound in commodity prices boosted the bid tone around the Aussie. Moreover, broad-based U.S. dollar correction and optimism over OPEC’s output cut decision at its final meeting on Wednesday provided further support to the upward momentum. The major trades 0.5 percent higher at 0.7474, having touched an early high of 0.7479, it’s strongest since Nov. 17. FxWirePro's Hourly Aussie Strength Index stood at 144.90 (Highly Bullish) by 0500 GMT. Amid a lack of economic drivers from both the continents, investors will continue to track board based market sentiment. Immediate support is seen at 0.7421 (5-DMA), a break below could drag it till 0.7400. On the upside, resistance is located at 0.7500, a break above targets 0.7540 (21-DMA)/ 0.7580.
NZD/USD: The New Zealand dollar rallied to more than 1-week highs largely on the back of stabilizing oil prices and weakness in the U.S. dollar against its main competitors. The major rose as high as 0.7091 earlier in the session and now attempts to take out the 0.7100 handle. The Kiwi trades 0.7 percent up at 0.7090, pulling further away from a low of 0.6971 struck on Thursday, it’s lowest since Jul. 25. FxWirePro's Hourly Kiwi Strength Index was at 93.64 (Slightly Bullish) by 0500 GMT. In absence of macroeconomic data from the U.S. docket, investors will continue to track price action around the U.S. dollar. Immediate resistance is located at 0.7115, a break above could take it near 0.7152 (21-DMA). On the downside, support is seen at 0.7032 (Session Low), a break below could drag it near 0.7000.
Equities Recap
Asian shares gained, as oil prices rebounded from daily lows triggering risk-on market sentiment, while the U.S. dollar eased across the board on weaker U.S. Treasury yields.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent.
Tokyo's Nikkei declined 0.26 percent at 18,334.01 points, Australia's S&P/ASX 200 index lost 0.62 percent at 5,473.80 points and South Korea's KOSPI was trading 0.36 percent up at 1,981.80 points.
Shanghai composite index rose 0.61 percent to 3,282.05 points, while CSI300 index was trading 0.62 percent higher at 3,543.29 points.
Hong Kong’s Hang Seng was trading 0.9 percent up at 22,926.98 points. Taiwan shares added 0.7 percent at 9,222.24 points.
Commodities Recap
Crude oil prices recovered, after witnessing steep losses earlier in the day, as markets remained cautious ahead of a planned producer meeting later in the week, which aims to restrain global oversupply. International benchmark Brent crude was 0.15 percent up at $47.16 per barrel by 0404 GMT, having hit a 10 - day low of $46.26 earlier in the session. U.S. West Texas Intermediate crude stood flat at $47.15 a barrel, after falling to an early low of $46.26, its lowest since Nov. 18.
Gold prices rose by more than 1 percent, retreating from a 9-1/2 month low touched on Friday, as the U.S. dollar extended losses after hitting a 14-year high last week. Spot gold was up 0.71 percent at $1,195.89 an ounce by 0409 GMT, rebounding from its lowest since Feb. 8 at $1,170.63 per ounce hit in the previous session. U.S. gold futures rose 1.43 percent to $1,195.20 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.3249 percent lower by 0.045 bps , while 5-year yield was down by 0.048 bps at 1.7992 percent.
The Australian government bonds rebounded as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year Treasury note fell 6 basis points to 2.71 percent, the yield on 15-year note also dipped 6 basis points to 3.10 percent and the yield on short-term 2-year slid 2-1/2 basis points to 1.83 percent.
The New Zealand government bonds closed modestly firmer as investors moved towards safe-haven buying following gains in the global debt market. The yield on the benchmark 10-year bond closed 1 basis point lower at 3.12 percent and the yield on short-term 2-year note fell 5-1/2 basis points to 2.12 percent.
