Market Roundup
- FBI sources believe Clinton Foundation case moving towards likely indictment – RealClearPolitics based on Fox News Bret Baier report.
- China Oct Caixin services PMI 52.4, Sept 52.0, best in four months, job creation best since January.
- Australia Sept trade deficit A$1.23 bln, A$1.7 bln forecast, exports +2% m/m, imports -1%, deficit at 20-month low on commodity windfall.
- Australia Oct PSE +1.6 pt to 50.5.
- ANZ posts profit of $5.9 bln, -18%, may sell insurance business - Reuters.
- New Zealand Oct ANZ commodity price index +0.7% m/m, 6th rise, +4% y/y, Sept +10.6%.
- UAE, Qatar may invest in Japan SoftBank's $100bn fund – Nikkei.
Economic Data Ahead
- (0245 ET/0645 GMT) Switzerland Q4 consumer confidence index; last -15.0.
- (0330 ET/0730 GMT) Sweden Oct PMI services; last 56.9.
- (0430 ET/0830 GMT) Sweden Sep ind production, +2.8% m/m, -2.0% y/y forecast; last -4.1%, -4.8%.
- (0430 ET/0830 GMT) Sweden Sep mfg new orders; last -5.6% y/y.
- (0500 ET/0900 GMT) Italy Sep unemployment, 11.4% forecast; last 11.4%.
- (0530 ET/0930 GMT) Great Britain Oct PMI services, 52.4 forecast; last 52.6.
- (0600 ET/1000 GMT) Eurozone Sep unemployment, 10.0% forecast; last 10.1%.
- (0600 ET/1000 GMT) Norway Oct housing prices; last +10.0% y/y.
- (0730 ET/1130 GMT) United States Oct Challenger layoffs; last 44.32k.
- (0830 ET/1230 GMT) United States w/e initial jobless claims, 258k forecast; last 258k.
- (0830 ET/1230 GMT) United States Q3 productivity – prelim, +2.0% forecast; last -0.6%.
- (0830 ET/1230 GMT) United States Q3 labor costs - prelim, +1.3% forecast; last +4.3%.
- (0945 ET/1345 GMT) United States Oct Markit PMI composite – final; flash 54.9.
- (0945 ET/1345 GMT) United States Oct Markit PMI services - final; flash 54.8.
- (1000 ET/1400 GMT) United States Oct ISM non-mfg index, 56.0 forecast; last 57.1.
- (1000 ET/1400 GMT) United States Sep factory orders, +0.2% m/m forecast; last +0.2%, ex-transport unch.
Key Events Ahead
- Japan Culture Day holiday – markets closed.
- N/A Greece CB Stournaras at Athens EU-Arab Summit (till tomorrow).
- (0230 ET/0630 GMT) Riksbank DepGov Jochnick at Falun, Sweden breakfast seminar.
- (0400 ET/0800 GMT) Ireland E750 mln 2.4% 2030 IGB auction.
- (0500 ET/0900 GMT) ECB/BdF Villeroy speaks at Paris conference, ECB economic bulletin.
- (0530 ET/0930 GMT) Spain E2.5-3.5 bln 0.75/1.3/1.95% 2021/26/30 Bono auctions.
- (0530 ET/0930 GMT) Spain E0.5-1.0 bln 1.8% 2024 index-linked Bono auction.
- (0550 ET/0950 GMT) France E7-8 bln 0.25% and 1.25% 2026 and 2036 OAT auctions.
- (0600 ET/1000 GMT) UK High Court judges to give legal verdict on Brexit.
- (0800 ET/1200 GMT) BoE policy announcement, no changes/9-0 vote forecast, inflation report.
- (0845 ET/1245 GMT) BoE Gracie in panel discussion at Berlin conference.
- (0900 ET/1300 GMT) United States TsySec Lew at Washington, DC event.
- (0920 ET/1320 GMT) Riksbank DepGov Jansson in Geneva panel debate.
- (1000 ET/1400 GMT) EC Pres Juncker in Vienna panel discussion.
- (1100 ET/1500 GMT) ECB/Buba Weidmann speaks in Amsterdam.
- (1655 ET/2055 GMT) BoE DepGov Cunliffe speaks at London AFME annual dinner.
- (1700 ET/2100 GMT) ECB Coeure speaks at Harvard University.
FX Beat
DXY: The dollar weakened across the board as increasing concerns about next week's U.S. presidential election overshadowed Federal Reserve's latest policy review. The greenback against a basket of currencies trades 0.2 percent down at 97.15, having hit a more than 3-week low of 97.08 earlier in the session.
EUR/USD: The euro extended gains above the 1.1100 handle, as the dollar nursed its losses on increasing concerns about U.S. presidential election scheduled next week. Recent polls showed Democratic candidate Hillary Clinton ahead of Republican Donald Trump, but some investors have priced in the chances of Donald Trump's victory on Nov. 8. On Wednesday, the Federal Reserve at its policy meeting left interest rates unchanged as widely expected and indicated it could raise rates in December as the economy continued to strengthen and inflation picked up. The European currency trades 0.2 percent up at 1.1120, having touched more than a 3-week high of 1.1125. Markets now await Eurozone's unemployment report and Bank of England rate decision, ahead of US ISM non-manufacturing release which could influence the pair. Immediate resistance is located at 1.1150, a break above could take it till 1.1190. On the downside, support is seen at 1.1070, a break below could drag it near 1.1000.
USD/JPY: The dollar slumped to a 1-month low below the 103.00 handle as a fresh bout of risk aversion strengthened the bid tone around the safe-haven Japanese yen. The major continues to remain on the downside in wake of increased nervousness heading into the U.S. elections scheduled next week, as markets now price a potential Donald Trump win. The major trades 0.5 percent lower at 102.71, hovering towards a low of 102.55, its lowest since Oct. 4. Meanwhile, volumes and volatility are likely to remain low with markets in Japan closed for a public holiday. The pair will continue to track overall market sentiment, ahead of series of the U.S. macro - fundamentals due later in the day. Immediate resistance is located at 103.80, a break above targets 104.20. On the downside, support is seen at 102.50, a break below could take it near 102.00.
GBP/USD: Sterling rose above the 1.2300 handle, as investors sold the greenback on concerns that Democrat Hillary Clinton could lose the U.S. presidential election next week. On Wednesday, the major jumped to its highest in 3-weeks on worries that a Trump victory could delay the U.S. interest rate hike as markets expect the Federal Reserve to deliver it in December. Sterling trades 0.2 percent higher at 1.2327, after rising as high as 1.2354 the previous day, its strongest since Oct. 11. Investors now await Bank of England rate decision, Quarterly Inflation Report (QIR) and BoE Gov Carney’s speech which could trigger sharp moves in the EUR/GBP cross, that could influence the major. Immediate resistance is located at 1.2400, a break above could take it near 1.2500. On the downside, support is seen at 1.2236 (10-DMA), a break below targets 1.2100. Against the euro, the pound trades flat at 90.14 pence, having hit more than a 2-week low of 90.49 the day before.
AUD/USD: The Australian dollar advanced, extending gains for the fifth consecutive session after a report showed the economy's trade deficit shrank to the lowest in 20 months. Data released by the Australian Bureau of Statistics showed the trade deficit narrowed to A$1.23 billion in September, compared with expectations of A$1.7 billion, while exports rose 2 percent and imports declined 1 percent. However, the major stalled its rebound and fell back into losses as a renewed bout of risk aversion weakened the bid tone around the Aussie. The pair trades flat at 0.7663, having touched an early high of 0.7683. Investors' sentiment will be driven by the U.S election-related news, ahead of U.S. economic releases. Immediate support is seen at 0.7628 (10-DMA), a break below could drag it near 0.7600. On the upside, resistance is located at 0.7690, a break above targets 0.7720.
NZD/USD: The New Zealand dollar hovered near 1-month highs after rising more than 1 percent in the previous session on upbeat employment data, which reduced RBNZ easing expectations. The major was also supported by New Zealand's October ANZ commodity price index, which gained 0.7 percent m/m, and 4 percent y/y. Moreover, upbeat Caixin China services PMI, a rise in international milk prices, positive employment data kept the bid tone around the major intact. The Kiwi trades 0.2 percent higher at 0.7307, having hit a fresh high of 0.7310, its highest level since Oct. 4. Markets will continue to track overall markets sentiment, ahead of series of U.S. economic data. Immediate resistance is located at 0.7250, a break above targets 0.7270. On the downside, support is seen at 0.7165 (10-DMA), a break below could drag it near 0.7130/ 0.7100.
Equities Recap
Asia shares were on the defensive as a tightening U.S. presidential race rattled financial markets globally, which strengthened demand for safe-haven buying.
MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.3 percent.
Tokyo markets were closed for a holiday.
Australia's S&P/ASX 200 index fell 0.04 percent to 5,227.00 points and South Korea's KOSPI was trading 0.47 percent higher at 1,988.28 points.
Shanghai composite index rose 0.91 percent at 3,131.12 points, while CSI300 index was trading 1.07 percent higher at 3,369.06 points.
Hong Kong’s Hang Seng was trading 0.10 percent down at 22,789.34 points. Taiwan shares shed 0.8 percent at 9,067.27 points.
Commodities Recap
Crude oil prices steadied, after declining to a 1-month low on Wednesday, supported by a weaker U.S. dollar buoyed sentiment across the market. International benchmark Brent crude was trading 0.74 percent higher at $47.40 per barrel at 0400 GMT, having hit a 1-month low of $46.45 in the previous session. U.S. West Texas Intermediate crude rose 0.57 percent at $45.74 a barrel, pulling away from a low of $44.95, its lowest since Sept 28.
Gold extended gained, after rising as much as 1.5 percent in the previous session, as uncertainty over the outcome of the U.S. election overshadowed the Federal Reserve's signals that it could hike interest rates next month. Spot gold advanced 0.73 percent at $1,305.69 an ounce at 0409 GMT, hovering towards a high of $1,307.89 hit on Wednesday, its highest since Oct 4. U.S. gold futures were down 0.8 percent at $1,298.50 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 1.8008 percent higher by 0.002 bps, while 5-year was 0.004 bps up at 1.2646 percent.
The Australian government bonds rallied ahead of the Reserve Bank of Australia’s (RBA) monetary policy statement, which is scheduled to be released Friday morning. The yield on the benchmark 10-year Treasury note fell 4 basis points to 2.309 percent, the yield on 15-year note also dipped 4 basis points to 2.675 percent and the yield on short-term 2-year slid 1/2 basis point to 1.638 percent.
The New Zealand government bonds closed modestly firmer as investors poured into safe-haven instruments at the end of the trading session after S&P/NZX 50 stock index declined more than 1 percent on subdued risk appetite ahead of the U.S. presidential election. The yield on the benchmark 10-year bond fell 1 basis point to 2.755 percent, the yield on 5-year note ended nearly 1 basis point lower at 2.263 percent and the yield on short-term 2-year note slid 1 basis point to 2.065 percent.
Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The 2-year price firmed 2 Canadian cents to yield 0.543 percent and the benchmark 10-year climbed 22 Canadian cents to yield 1.184 percent. The 10-year yield hit its lowest intraday since Oct. 26 at 1.170 percent.
