Market Roundup
- NY Times – 84% chance of Hillary win, Democrats 55% chance of Senate control.
- Japan FinMin Aso – FX stability important, may respond to JPY spike on US Presidential election result – Reuters.
- Japan Oct foreign reserves $1.243 trillion, Sept $1.260 trillion, -$17.353 bln.
- PBOC fixes CNY at 6.7817 vs USD, yesterday 6.7725, last close 6.7769.
- China Oct $49.06 bln trade surplus, $51.7 bln forecast, exports -7.3% y/y, imports -1.4%, -6% and -1% forecast, Jan-Oct exports -7.7%, imports -7.5%.
- China Oct CNY325.25 bln trade surplus, exports -3.2% y/y imports +3.2%.
- China Oct crude oil imports lowest since Jan, iron ore-soybeans since Feb.
- UK Oct BRC like-for-like retail spending +1.7% y/y, total spending +2.4%, Sept +0.4%, +1.3%, both best since January, higher fuel prices, inflation concerns, tourist spending cited.
- Australia Oct NAB business conditions index +6, confidence +4, Sept +8, +6.
Economic Data Ahead
- (0145 ET/0645 GMT) Switzerland Oct unemployment, 3.3% sa forecast; last 3.3% sa, 3.2% nsa.
- (0200 ET/0700 GMT) Germany Sep industrial output, -0.5% m/m forecast; last +2.5%.
- (0200 ET/0700 GMT) Germany Sep trade balance, E23.0 bln surplus forecast; last E22.2 bln surplus.
- (0245 ET/0745 GMT) France Sep trade, current account balances; last E4.26, 2.1 bln deficits.
- (0245 ET/0745 GMT) France Sep budget balance; last E96.0 bln deficit.
- (0245 ET/0745 GMT) France Q4 industrial investment – current year; last +6.0%.
- (0430 ET/0930 GMT) Great Britain Sep ind production, unch m/m, +0.8% y/y forecast; last -0.4%, +0.7%.
- (0430 ET/0930 GMT) Great Britain Sep mfg production, +0.4% m/m, -0.1% y/y forecast; last +0.2%, +0.5%.
- (0600 ET/1100 GMT) United States Oct NFIB business optimism index; last 94.1.
- (1000 ET/1500 GMT) United States Sep JOLTS job openings, 5.51 mln forecast; last 5.44 mln.
Key Events Ahead
- (0115 ET/0615 GMT) RBA Ryan speaks at Hong Kong Pan-Asian Regulatory Summit
. - (0300 ET/0800 GMT) EU EcoFin meeting in Brussels.
- (0400 ET/0900 GMT) Netherlands E1.5-2.5 bln 0.5% 2026 DSL auction.
- (0430 ET/0930 GMT) ECB zero% 7-day refi, E32 billion allotment forecast, E32.7 bln maturing.
- (0530 ET/1030 GMT) UK DMO GBP2.5 bln 1.75% 2037 Gilt auction.
- (0530 ET/1030 GMT) Germany E500 mln 0.1% 2026 index-linked Bund auction.
- (0530 ET/1030 GMT) Belgium E1.5-1.9 billion 3 and 12-month treasury certificate auctions.
- (0630 ET/1130 GMT) ESM E1.5 bln 3-month bill auction.
- N/A US Election Day – presidential, Congressional, state and municipal.
- (0745 ET/1245 GMT) Chicago Fed Evans in New York panel discussion/17:20 discussion round 2.
- (1105 ET/1605 GMT) BoC DepGov Schembri speaks in Halifax, Canada.
- (1200 ET/1700 GMT) BoE ChiefEcon Haldane speaks at IADP launch in London.
FX Beat
DXY: The dollar steadied versus its major peers as investors cautiously awaited the U.S. presidential election. The greenback against a basket of currencies trades flat at 97.73, within the sight of a 6-day high of 97.62 hit in the prior session.
EUR/USD: The euro edged down as the dollar stood firm on the increasing prospect of a victory for U.S. Democratic presidential candidate Hillary Clinton after the FBI did not find anything to warrant any criminal charges against her in its latest probe. According to the final Reuters/Ipsos States of the Nation project, Clinton has about 90 percent chance of defeating Republican Donald Trump at the U.S. presidential election. The European currency trades flat at 1.1040, putting further distance between Friday’s peak of 1.1143, its highest since Oct. 11. In absence of macro-fundamental driver from the Eurozone, markets attention will remain on the U.S. presidential election and Fed official Evan's speech for further clues on the major's direction. Immediate resistance is located at 1.1084 (5-DMA), a break above could take it over 1.1100. On the downside, support is seen at 1.1024 (10-DMA), a break below could drag it lower 1.1000.
USD/JPY: The dollar hovered near 1-week high, as polls showed Democrat Hillary Clinton in lead of her Republican contender Donald Trump ahead of the U.S. presidential election. Clinton's chances of winning were boosted after the FBI cleared her of any possibility of criminal charges in its latest probe. Moreover, a Trump win would be a huge upset for global shares and dollar bulls as his views on foreign policy, trade and immigration raised concerns about their potential impact on global growth. The major traded flat at 104.45, having hit a high of 104.63 in the previous session, its highest since Nov. 1. Investors will remain cautious and would refrain from taking big positions ahead of U.S. presidential election. Immediate resistance is located at 104.80, a break above targets 105.20/ 105.50. On the downside, support is seen at 104.05 (20-DMA), a break below could take it near 103.65.
GBP/USD: Sterling hovered below the 1.2400 handle, as the dollar traded higher across the board on growing confidence that Hillary Clinton would win Tuesday's U.S. presidential election. On Monday, the major slumped around 1 percent, after rebounding almost 3 percent last week on easing worries that Britain would undergo a "hard" Brexit. Sterling trades 0.05 percent down at 1.2388, having hit a 1-month high of 1.2557 on Friday. Investors now await UK's inflation report hearing and industrial/ manufacturing production figures, ahead of the U.S. presidential election. Immediate resistance is located at 1.2500, a break above could take it near 1.2550. On the downside, support is seen at 1.2313 (10-DMA), a break below targets 1.2200. Against the euro, the pound trades 0.1 percent lower at 89.12 pence, hovering towards a low of 89.37 pence hit in the prior session.
AUD/USD: The Australian dollar declined after rising 0.7 percent overnight, recording its biggest daily percentage gain since Oct. 20 on improved risk-on market profile. The weakness comes in following the release of sluggish Chinese trade balance data as China’s customs data showed that October exports slumped -7.3 percent y/y versus estimates of -6.0 percent, while imports stood at -1.4 percent y/y against projections of -1.0 percent. Moreover, Australia's NAB's October business conditions and confidence weakened to 6 and 8, respectively, suggesting that market sentiment deteriorated in the same period. The Aussie trades 0.3 percent down at 0.7704, having hit a near 2-1/2 week high in the previous session. Markets will continue to digest the Chinese trade report ahead of the U.S. presidential election. Immediate support is seen at 0.7689 (Session Low), a break below could drag it near 0.7660. On the upside, resistance is located at 0.7730, a break above targets 0.7760.
NZD/USD: The New Zealand dollar edged down, but not far from a 6-week high hit the previous day. The major came under renewed selling pressure following the release of downbeat Chinese trade balance data, which triggered a fresh bout of risk-off market sentiment. The Kiwi trades 0.1 percent down at 0.7334, having hit a high of 0.7347 on Monday, it’s strongest since Sept. 22. The pair is expected to consolidate above the 0.7300 handle, ahead of as the outcome of the U.S. presidential elections and Reserve Bank of New Zealand's policy decision. Immediate resistance is located at 0.7350, a break above targets 0.7370. On the downside, support is seen at 0.7288 (5-DMA), a break below could drag it near 0.7250.
Equities Recap
Asian shares gained as improving prospects of Democrat Hillary Clinton victory strengthened risk-on market sentiment ahead of the U.S. presidential election.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent.
Tokyo's Nikkei lost 0.03 percent at 17,171.38 points, Australia's S&P/ASX 200 index rose 0.03 percent to 5,252.40 points and South Korea's KOSPI was trading 0.3 percent higher at 2,003.43 points.
Shanghai composite index rose 0.44 percent to 3,147.53 points, while CSI300 index was trading 0.43 percent higher at 3,371.54 points.
Hong Kong’s Hang Seng was trading 0.18 percent up at 22,842.86 points. Taiwan shares added 0.3 percent at 9,217.43 points.
Commodities Recap
Crude oil prices edged down after posting strong gains in the previous day, with investors poured money into financial markets on increasing prospects that Democrat Hillary Clinton would win the U.S. presidential election. International benchmark Brent crude was trading 0.2 percent lower at $46.19 per barrel by 0356 GMT, within the sight of a near 3-month low of $45.06 hit on Friday. U.S. West Texas Intermediate crude also declined 0.22 percent at $44.83 a barrel, having gained almost 1.9 percent the previous session.
Gold steadied after declining nearly 2 percent in the previous session, as uncertainty ahead of U.S. presidential election boosted demand for the safe-haven metal. Spot gold was up 0.1 percent at $1,282.77 an ounce at 0401 GMT, having hit a low of $1,278.07 in the previous session. U.S. gold futures were up 0.27 percent to $1,282.80 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 1.199 percent lower by 0.004 bps, while 5-year yield was at 0.541 percent.
The Australian government bonds traded narrowly mixed as investors await the United States 2016 presidential election result. The yield on the benchmark 10-year Treasury note rose 1/2 basis point to 2.361 percent, the yield on 15-year note also climbed 1 basis point to 2.736 percent and the yield on short-term 2-year slid 2 basis points to 1.660 percent.
The New Zealand government bonds closed lower as investors bet on Hillary Clinton to claim the White House after FBI Director James Coney said that the case against U.S. Democrat presidential candidate Hillary Clinton mishandling classified emails is closed again. The yield on the benchmark 10-year bond rose 1-1/2 basis points to 2.825 percent, the yield on 5-year note ended nearly 2 basis points higher at 2.363 percent and the yield on short-term 2-year note bounced 1 basis point to 2.110 percent.
