Market Roundup
- BOJ Gov Kuroda: No comment on forex levels or daily moves
- BOJ Gov Kuroda: Desirable for forex to move stably in line with economic fundamentals
- BOJ Gov Kuroda: Not ruling out fixed-rate operations below market yields
- BOJ Gov Kuroda: BOJ is prepared to conduct fixed-rate operations in an unlimited amount if needed
- S. Korea Q3 household disposable real income -0.1 pct y/y vs +0.1 pct in Q2 -stats office
- China Oct Shenzhen new home prices -0.5 pct m/m vs +1.9 pct m/m in Sept - stats bureau
- China Oct Shenzhen new home prices +31.7 pct y/y (previous month +34.1 pct) - stats bureau
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Producer Prices
- (0400 ET/0900 GMT) Eurozone Current Account
- (0400 ET/0900 GMT) Eurozone Net Investment Flow
Key Events Ahead
- (0300 ET/0800 GMT) European Central Bank President Draghi speech
- (0410 ET/0910 GMT) Bank of England Monetary Policy Committee member Dr. Ben Broadbent speech
- (0930 ET/1430 GMT) Federal Reserve Bank of New York President William Dudley speech
- (0930 ET/1430 GMT) Federal Reserve Bank of Kansas City President Esther George speech
FX Beat
DXY: The dollar rallied across the board after Federal Reserve Chair Janet Yellen in her testimony indicated prospects of imminent U.S. interest rate hike. The greenback against a basket of currencies traded 0.25 percent higher at 101.20, having touched a fresh 13-1/2 -year high of 101.32. FxWirePro's Hourly Dollar Strength Index stood at 88.31 (Bias Slightly Bullish) by 0500 GMT.
EUR/USD: The euro tumbled to a fresh 11-month low below the 1.0600 handle as the greenback soared across the board after Fed Chair Janet Yellen indicated that U.S. interest rates will likely increase by the year-end. European Central Bank’s last policy meeting minutes released on Thursday, showed that the central bank agreed on the need to maintain extraordinary monetary stimulus and to decide in its next policy meeting whether to extend the ECB's 1.74 trillion-euro asset buys. The European currency trades 0.2 percent down at 1.0606, having hit a low of 1.0581 earlier in the session, its lowest level since Dec. 3 and was down 2.4 percent for the week. FxWirePro's Hourly Euro Strength Index stood at -58.02 (Bias Neutral) by 0400 GMT. Markets now await German producer price index and Eurozone's current account data ahead of speeches from ECB President Draghi and Fed officials'. Immediate resistance is located at 1.0650 a break above could take it near 1.0700. On the downside, support is seen at 1.0580 (Session Low), a break below could drag it near 1.0550.
USD/JPY: The dollar rallied to a fresh 5-1/2 month high above the 110.00 handle after Fed Chair Janet Yellen noted in her testimony that an increase in the U.S. interest rates was imminent if incoming data showed further evidence of strong economic growth. Moreover, the major was also boosted by upbeat U.S. economic data, which showed Housing starts recorded a nine-year peak in October, weekly jobless claims dropped to a 43-year low and consumer prices marked their biggest rise in six months. The pair trades 0.5 percent higher at 110.64, having hit a high of 110.77 earlier in the session, it’s strongest since Jun. 1. Investors’ attention now remains on Federal Reserve officials' speeches, amid a lack of relevant fundamental drivers from the U.S docket. FxWirePro's Hourly Yen Strength Index stood at -56.34 (Bias Neutral) by 0400 GMT. Immediate resistance is located at 110.00, a break above targets 111.44. On the downside, support is seen at 109.47 (5-DMA), a break below could take it near 109.00.
GBP/USD: Sterling declined after rising above the 1.2500 handle in the previous session on the back of better-than-expected British October retail sales data. The major fell below the 1.2400 handle, extending losses for the fifth straight day, as the greenback accelerated after Federal Reserve Chair Janet Yellen signaled an imminent U.S. interest rate hike. Sterling trades 0.1 percent down at 1.2401, hovering towards a low intra-day low of 1.2384. FxWirePro's Hourly Sterling Strength Index stood at 40.41 (Bias Neutral) by 0400 GMT. Markets will continue to track development surrounding Europe political risks, ahead of BoE MPC member Dr. Ben Broadbent speech. Immediate resistance is located at 1.2452 (10-DMA), a break above could take it near 1.2500. On the downside, support is seen at 1.2365 (20-DMA), a break below targets 1.2300. Against the euro, the pound trades flat at 85.50 pence, after rising to an early high of 85.42 pence, it’s highest since Sept. 19.
AUD/USD: The Australian dollar skidded below the 0.7300 handle to a 5-month low as the greenback strengthened broadly after Federal Reserve Chair Janet Yellen hinted U.S. interest rates will probably rise next month. The major has lost nearly 5 percent since Nov. 8 and has erased its 2016 gains in the last eight sessions to stand only 1.4 percent up for the year so far. The Aussie trades 0.1 percent lower at 0.7393, having touched an early low of 0.7378, its weakest since Jun. 28. FxWirePro's Hourly Aussie Strength Index stood at - 116.81 (Bias Highly Bearish) by 0500 GMT. The major will continue to track overall market sentiment, ahead of speeches by Federal Reserve officials. Immediate support is seen at 0.7360, a break below could drag it till 0.7300. On the upside, resistance is located at 0.7450, a break above targets 0.7500
NZD/USD: The New Zealand dollar declined for an eighth straight session to a 3-1/2 month low of 0.7000, amid board-based U.S. dollar strength and weaker oil prices. The major is seen making a minor recovery, as positive retail sales data and better-than-expected PPI figures provided some support to the NZD bulls. The Kiwi trades 0.2 percent lower at 0.7012, after falling as low as 0.7000, it’s weakest since Jul. 26. FxWirePro's Hourly Kiwi Strength Index was at -75.70 (Bias Slightly Bearish) by 0500 GMT. Investors will continue to digest New Zealand's economic dataset, ahead of speeches from Fed officials due later in the day. Immediate resistance is located at 0.7050, a break above targets 0.7065/ 0.7100. On the downside, support is seen at 0.6974, a break below could drag it near 0.6951.
Equities Recap
Asian shares were slightly weaker as increasing U.S. bond yields lifted the greenback to a more than 13-1/2 year high against a basket of major currencies after Federal Reserve Chair Janet Yellen’s testimony fuelled expectations of U.S. interest rates hike next month.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.4 percent, hovering above its 4-month low hit earlier in the week and was on track for its fourth consecutive week of losses.
Tokyo's Nikkei rose 0.80 percent at 18,002.58 points, Australia's S&P/ASX 200 index edged up 0.34 percent to 5,356.80 points and South Korea's KOSPI was trading 0.31 percent lower at 1,974.64 points.
Shanghai composite index declined 0.20 percent to 3,202.18 points, while CSI300 index was trading 0.15 percent lower at 3,431.44 points.
Hong Kong’s Hang Seng was trading 0.12 percent up at 22,295.12 points. Taiwan shares added 0.2 percent at 9,008.79 points.
Commodities Recap
Crude oil prices steadied, after declining in the previous two sessions, following an EIA report showing natural gas storage declined to 30B, against estimates of 31B and previous 54B and on expectations that OPEC might agree on production cuts in order to balance a persistent fuel oversupply. International benchmark Brent crude was trading 0.2 percent higher at $46.13 per barrel by 0403 GMT, having hit a high of $47.58 in the previous session, its highest since Nov. 2. U.S. West Texas Intermediate crude rose 0.20 percent at $45.00 a barrel, having touched a 2-1/2 week high of $46.55 on Thursday.
Gold slumped to its lowest in 5-1/2 months and was on track for a second weekly drop, as the U.S. dollar strengthened after comments from the Federal Reserve boosted expectations of U.S. interest rates hike in December. Spot gold trades 0.6 percent lower at $1,208.75 an ounce by 0407 GMT, after declining to a low of $1,205.53 earlier in the session, its lowest since May 30. U.S. gold futures dropped nearly 1 percent to $1205.0 an ounce in early trading.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.3369 percent higher by 0.059 bps, while 5-year yield was 0.063 bps up at 1.7756 percent.
The Australian government bonds slumped after the Federal Reserve Janet Yellen said that recent upbeat economic data strengthened the case of December rate hike. The yield on the benchmark 10-year Treasury note rose 13 basis points to 2.72 percent, the yield on 15-year note jumped 14 basis points to 3.14 percent and the yield on short-term 2-year bounced 5 basis points to 1.827 percent.
The New Zealand government bonds closed lower as investors poured into safe-haven assets amid following weakness in the U.S. Treasuries. The yield on the benchmark 10-year bond rose more than 10 basis points to 3.110 percent, the yield on 7-year note ended nearly 9 basis points higher at 2.763 percent and the yield on short-term 2-year note bounced 7-1/2 basis points to 2.135 percent.
Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The 2-year dipped 3 Canadian cents to yield 0.676 percent, and the benchmark 10-year fell 50 Canadian cents to yield 1.561 percent. The 10-year yield hit its highest since December on Wednesday.
