Market Roundup
- Japan Post IPO successful, shares surge on debut, JP Insurance Y2200 to Y3300, JP Holdings Y1400 to Y1617, JP Bank Y1450 to Y1680 - Financial Times.
- Japan Oct monetary base new record high trln end-October, +32.7% y/y.
- China Oct Caixin services PMI 52.0, 3-month high, Sept 50.5, 14-month low, new business jumped, employment improved, business expectations moderated.
- US Oct total vehicle sales 18.24 mln AR, +13.6% y/y, Sept 18.17 mln.
- Japanese automakers break new car sales records in US in October - Kyodo.
- UK NIESR nudges down UK '15 growth forecast to 2.4% from 2.5%, '16 to 2.3% from 2.4% - Reuters.
- Australia Sept retail sales +0.4% m/m, Q3 chain volume +0.6% q/q, +0.4% and +0.7% eyed.
- Australia Sept trade trade deficit A$2.317 bln, A$3 bln eyed, exports +3% m/m, imports +2%.
- Australia Oct AIG PSI off 3.3 pts to 48.9, 1st contraction in 4-months.
- NZ Q3 unemployment 6.0%, employment -0.4% q/q, participation 68.6%, 6.0%, +0.4% and 69.3% eyed, Q3 LCI priv-sector wages ex-overtime +0.4%, +0.5% eyed.
- NZ Fonterra GDT price index -7.4%, volumes down too.
- Japan Post Nagato - Could accelerate shift from JGBs to other assets, cites Japanese and overseas equities, EM, high-yield bonds but no drastic changes.
- (0230 ET/0730 GMT) Sweden Oct PMI services; last 57.0.
- (0315 ET/0815 GMT) Spain Oct PMI services, 55.3 eyed; last 55.1.
- (0345 ET/0845 GMT) Italy Oct PMI services, 53.6 eyed; last 53.3.
- (0350 ET/0850 GMT) France Oct PMI services, 52.3 eyed; flash 52.3.
- (0350 ET/0850 GMT) France Oct PMI composite, 52.3 eyed; flash 52.3.
- (0355 ET/0855 GMT) Germany Oct PMI services, 55.2 eyed; flash 55.2.
- (0355 ET/0855 GMT) Germany Oct PMI composite, 54.5 eyed; flash 54.5.
- (0400 ET/0900 GMT) EZ Oct PMI services, 54.2 eyed; flash 54.2.
- (0400 ET/0900 GMT) EZ Oct PMI composite, 54.0 eyed; flash 54.0.
- (0400 ET/0900 GMT) Norway Oct housing prices; last +6.9% y/y.
- (0430 ET/0930 GMT) GB Oct PMI services, 54.5 eyed; last 53.3.
- (0500 ET/1000 GMT) EZ Sep producer prices, -0.4% m/m, -3.3% y/y eyed; last -0.8%, -2.6%.
- (0815 ET/1315 GMT) US Oct ADP national employment, +180k eyed; last +200k.
- (0830 ET/1330 GMT) US Sep int'l trade bal, $41.1 bln deficit eyed; last $48.3 bln deficit.
- (0945 ET/ 1445 GMT) US Oct Markit PMI services/composite - final; flash 54.4, 54.5.
- (1000 ET/ 1500 GMT) US Oct ISM non-mfg business activity index, 59.5 eyed; last 60.2.
- N/A BoE MPC begins two-day meeting, ECB Governing Council meeting.
- N/A ECB Pres Draghi, Fed Gov Brainard, et al at Frankfurt ECB conference.
- N/A EuroGroup Pres Dijsselbloem speech at Bratislava conference (till Nov 6).
- N/A Sweden NDO SEK10 bln 3-month, Greece E875 mln 26-week t-bill auctions.
- (0300 ET/0800 GMT)Iceland CB policy announcement.
- (0845 ET/ 1345 GMT) Philly Fed Harker speech at Philadelphia event.
- (1000 ET/ 1500 GMT) FOMC Chair Yellen House testimony on bank regulation.
- (1000 ET/ 1500 GMT) NY Fed Dudley at New York briefing on economy.
- (1715 ET/ 2215 GMT) RBA Gov Stevens speech in Sydney.
- (1830 ET/ 2330 GMT) FOMC ViceChair Fischer speech Washington, DC economists dinner.
USD: The dollar firmed on Wednesday in line with higher U.S. Treasury yields, as a regional rally in equities whetted investors' appetite for risk. The dollar index, which tracks the U.S. currency against a basket of six major rivals, last stood at 97.342, up about 0.2 percent, adding to its 0.3 percent gain the previous session and moving back toward a 2-1/2-month high of 97.818 touched on Oct. 28.
AUD/USD: The pair broke above the stiff 0.72 resistance and is currently trading at 0.7206, slightly lower that day's highs at 0.7224. Upside in the pair seems to be capped at 20 DMA BY 0.7225, breach above could see the pair at 0.7260 levels and then to 0.7280. Daily price action has edged above the cloud, Stochs and RSI point North, the is scope for further upside towards 200 DMA at 0.7281. Better-than-expected Chinese data has boosted Asian equities and risk appetite across markets. China October Services PMI came in at 52.0 vs 50.5 last, a 3-month high, while the composite stood at 49.9 vs 48.00 last. Australian retail sales also came in line with expectations at 0.4% for the month of September.
NZD/USD: A further decline in dairy prices and soft New Zealand jobs data battered the kiwi. Against the greenback, the kiwi slid about 0.1 percent to $0.6658 after bumping to a session low of $0.6633, peeling back from highs near 68 U.S. cents set in the past three sessions. NZD/USD was at the time of writing trading at 0.6658, recovering slightly from session lows at 0.6632. Immediate support is located at 0.6621 (trendline), and then at 0.6617 (55 EMA). Resistance is seen at 0.6713 (Oct 29 high) ahead of 0.6715 (Oct 13 high)
USD/JPY: The pair is currently trading at 121.19 after making a high of 121.38 on the day on short-covering, day's low was at 121.03. Supports on the downside are seen at 120.99 hourly kijun, and further below at 120.81 daily tenkan. Lack of data in Asia turns market attention to Fed speakers and the ADP report in the US session for cues on further direction. The pair has a major resistance level around 121.48, its 200 DMA, a convincing break above could see a strong upward continuation towards the 122.00 region.
EUR/USD: The single currency remains heavy on dovish Draghi talk, carry demand. EUR/USD opened Asian Session at 1.0963, day's range 1.0968/0938. The pair currently trades -0.13% lower at 1.0950, retreating from fresh session lows of 1.0938 and is poised to test 1.0895-1.0900 support. Firm resistance eyed above at 1.1005 10-DMA. Persisting risk-on sentiment amid rallying Asian equities also weighng on the pair. More from Draghi coming in ahead of a raft of final services PMI from Euro zone and US ADP data will influnce the pair's direction ahead.
Equities Recap
Asian shares rallied on Wednesday with Japanese stocks leading the way, while investors' bigger risk appetite pushed up U.S. debt yields and lifted the dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 1.7 percent.
Shanghai stocks advanced 1.9 percent, Australian shares gained 0.7 percent and Hong Kong's benchmark jumped 3.0 percent.
Tokyo's Nikkei surged 2.4 percent after three firms affiliated with Japan Post made strong trading debut with investors rushing to get a piece of the group's $12 billion initial public offering.
Australia's S&P/ASX 200 index unofficially closed down 0.04 pct at 5,236.90 points
Commodities Recap
Crude oil took a breather after surging overnight when U.S. gasoline and diesel rallied following an outage on a key pipeline system. The outage added support to oil markets already boosted by strike in Brazil.
U.S. crude was effectively flat at $47.86 a barrel after rallying 4 percent on Tuesday. Brent crude dipped 0.1 percent to $50.50 a barrel after surging 3.6 percent.
Gold firms after 5-day slide, but stayed within striking distance of a four-week low as investors positioned for a U.S. rate hike this year.
Spot gold had ticked up 0.4 percent to $1,121.80 an ounce by 0327 GMT, but was not far from an overnight low of $1,114.10, its weakest since Oct. 2.
Platinum slid to its lowest in nearly four weeks on Tuesday, while palladium fell to a five-week low. Both metals were slightly higher on Wednesday.
Treasuries Recap
New Zealand government bonds were mixed, with yields 2.5 basis points lower at the short end of the curve.
While the market pushed back the risk of a December rate cut by the RBA to 26 percent, the margin between 10-year and 3-year government bond yields grew to 85 basis points, the widest since mid-September.
Australian government bond futures held near three-week lows, with the three-year bond contract off 1 tick at 98.140. The 10-year contract shed 3.5 ticks to 97.2550, while the 20-year contract fell 4 ticks to 96.6900.
Investor appetite for riskier assets drove safe-haven U.S. Treasury yields higher, with the benchmark 10-year note yield climbing to a 1-1/2-month high of 2.225 percent overnight.
