Market Roundup
- UK Oct RICS house price balance +49, +45 eyed, Sept +44.
- Australia Oct employment +58.6k, unemployment 5.9%, participation 65.0%, +15k, 6.2% and 64.9% eyed, full-time employment +40.0k, report stellar.
- Australia Nov MI expected inflation +2.7% weighted mean, +3.5% trimmed mean.
- New Zealand Nov ANZ/RM consumer confidence index 122.7, 6-month high, Oct 114.9.
- New Zealand Oct PMI 53.3, Sept 55.0; Oct food prices -1.2% m/m, -0.5% y/y.
- Japan Sept core machinery orders +7.5% m/m, -1.7% y/y, +3.3% and -4.0% eyed, Q3 -10.0% q/q, first q/q fall in five quarters, Q4 eyed at +2.9%.
- Japan Oct domestic corp goods prices -0.6% m/m, -3.8% y/y, -0.4/-3.5% eyed.
- Most Japanese firms do not see economic recovery soon, 44% of manufacturers undershooting targets, most sticking to current CAPEX plans, wage hikes to match last year, 59% want extra budget to boost economy - Reuters poll.
- MoF flow data week-ended Nov 7 - Japanese sell net Y34.0 bln foreign stocks, buy trln bonds, Y121.0 bln bills; foreign investors buy net Y170.4 bln Japanese stocks, Y56.0 bln bonds, trln bills.
- Deutsche Bank prices Y92 bln 3-tranche samurai despite plunging currency basis swap - IFR.
- Foreign funds to follow IMF lead with yuan bond holdings - Reuters.
- ECB Coeure - Debate open on boosing QE, Fed December decision won't have direct effect on ECB decision, risks now to both growth-inflation -Le Figaro.
- German FinMin Schaeuble - Loose monetary policy carries risks - Reuters.
- (0200 ET/ 0700 GMT) Germany Oct CPI/HICP - final, +0.3% and +0.2% y/y eyed; flash +0.3%, +0.2%.
- (0245 ET/ 0745 GMT) France Oct HICP - final, unch m/m, +0.1% y/y eyed; flash -0.4%, +0.1%.
- (0245 ET/ 0745 GMT) France Sep current account balance; last E200 mln surplus.
- (0330 ET/ 0830 GMT) Sweden Oct CPI, +0.1% m/m, +0.1% y/y eyed; last +0.4%, +0.1%.
- (0330 ET/ 0830 GMT) Sweden Oct CPIF, +0.2% m/m, +1.1% y/y eyed; last +0.4%, +1.0%.
- (0500 ET/ 1000 GMT) EZ Sep ind production, -0.1% m/m, +1.3% y/y eyed; last -0.5%, +0.9%.
- (0830 ET/ 1330 GMT) US w/e initial jobless claims, 270k eyed; last 276k.
- (1000 ET/ 1500 GMT) US Sep JOLTS job openings, 5.37 mln eyed; last 5.37 mln.
- (1400 ET/ 1900 GMT) US Oct Treasury budget, $130.0 bln deficit eyed; last $121.7 bln deficit.
- N/A ECB Pres Draghi EU parliamentary testimony.
- N/A Riksbank Gov Ingves, Ohlsson parliamentary testimony.
- (0400 ET/ 0900 GMT) Norges Bank Financial Stability Report.
- (0500 ET/ 1000 GMT) Italy E1.5-2/2-2.5/0.5-1 bln 0.3/1.45/5.0% 2018/22/39-40 BTP auctions.
- (0530 ET/ 1030 GMT) UK DMO GBP1.5 bln 4.25% 2039 Gilt auctions.
- N/A St Louis Fed Bullard et al speak at Cato Institute conference.
- N/A FOMC Chair Yellen, ViceChair Fischer speak at Fed conference.
- (1015 ET/ 1515 GMT) Chicago Fed Evans speech in Chicago.
- (1100 ET/ 1600 GMT) ECB/Buba Weidmann speech in Paris.
- (1200 ET/ 1700 GMT) BoE ChiefEcon Haldane speech at London Trades Union Congress.
- (1215 ET/ 1715 GMT) NY Fed Dudley speaks before Economic Club of New York.
- (1400 ET/ 1900 GMT) ECB/Austria CB Nowotny at Vienna seminar.
USD: Dollar was consolidating recent gains, was down against the euro and yen on Thursday after a recent rally. The dollar index last traded at 98.760, drifting down from a 7-month peak of 99.504 set on Tuesday.
AUD/USD: The biggest mover in Asia was the Aussie, which was last up 1.1 percent at $0.7142 after Australian employment came in at 58,600 new jobs in October versus forecasts of a modest increase of 15,000. Australian dollar surged and interbank futures slid on Thursday after the strong jobs report led markets to widen the odds of an interest rate cut. The Aussie pulled away from a one-month low of $0.7016 touched this week. A sustained break above $0.7170 would target $0.7220. AUD/USD is currently trading at 0.7136, paring some gains from session highs at 0.7154. Immediate resistance for the pair is seen at 0.7153 (20 DMA), while support is located at 0.7120 (Daily Tenkan).
NZD/USD: The kiwi dollar was vulnerable to a further easing to official cash rates, especially after the country's central bank highlighted growing risks to its financial system from a dairy slowdown. The New Zealand dollar was dragged higher to $0.6570, from $0.6553 in early trade, but remained within reach of a one-month trough around 65 cents touched recently. The pair is currently trading at 0.6549, immediate resistance at 0.6605 (10 DMA) and support at 0.6525 (Nov 11 low)
AUD/NZD has pulled out of the consolidation phase and re-entered its wide range channel between 1.0895 and 1st July highs of 1.1429. AUD led rally in response to surprisingly strong Australian jobs data has buoyed the pair higher. The pair has broken above 200 DMA at 1.0767 and is currently trading at 1.0907, with next hurdle seen at 1.0921 (50% of Sep/Oct fall) then 1.0982 (Oct 13 high). We would be bullish on convincing breaks above channel-base. AUD/NZD bulls could then target the 55 DMA at 1.0923 for a recovery back above the 1.10 handle.
EUR/USD: The euro added about 0.2 percent against a broadly weak US dollar to 1.0769, recovering from this week's nearly seven-month low of 1.0674. EUR/USD opened Asia at 1.0745, after a quiet, holiday-affected overnight session. Pair is essentially in a consolidation mode. Push back towards 1.0760-65 could be seen in the day. Resistance still at 1.0800-20 former support, 10-DMA at 1.0845. Support on the downside is at 1.0706 (Nov 11 low).
GBP/USD: Sterling was another standout performer, which climbed as far as 1.5220 against the Greenback, pulling further away from six-month lows of 1.5027 set on Friday. Data showing UK wages growing at a slower-than-expected pace in the third quarter was offset by a fall in the jobless rate to its lowest since early 2008. The pair is currently trading at 1.5219, with next hurdle at 1.5254 (10 DMA) and support at 1.5206 (session lows).
Equities Recap
Asian shares shrugged off early losses as crude oil prices pulled away from their overnight lows. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.6 percent, erasing its early modest losses.
Japan's Nikkei stock index was slightly higher, erasing earlier losses. unpfficially closed up 0.03 pct at 19,697.77.
South Korean shares were down 0.1 percent. Earlier on Thursday, the Bank of Korea kept rates steady for a fifth straight month as expected.
Australia's S&P/ASX 200 index unofficially closes up 0.07 pct at 5,126.20 points.
Commodities Recap
Crude oil prices edged away from over two-month lows in early Thursday trading, after a sharp slide on concerns the market would take much longer than many anticipated to rebalance as supplies far outstrip demand.
Benchmark U.S. crude futures were at $43.25 a barrel at 0242 GMT, up 32 cents from Wed. Internationally traded Brent crude futures were at $46.18 a barrel, up 37 cents following a 3.4-percent fall the previous day.
Gold languished near a three-month low on Thursday. Spot gold edged up 0.2 percent to $1,087.70 an ounce by 0334 GMT as the dollar eased slightly from a seven-month high. The metal had dropped to $1,083.65 in the previous session, the lowest since Aug. 7.
Other precious metals have also taken a hit from a stronger dollar. Silver was trading near a 2-1/2-month low of $14.22 reached in the previous session. Platinum fell to $974 on Thursday, its lowest in nearly seven years.
Treasuries Recap
Australian government bond futures tumbled to multi-month lows, with the three-year bond contract off 15 ticks to 97.820. It went as far as 97.810, the lowest since June. The 10-year contract fell 11.5 ticks to 96.9850, while the 20-year contract dropped 9 ticks to 96.4650.
New Zealand government bonds eased sending yields 4.5 basis points higher at the long end of the curve.
JGBs modestly firmer after decent 30-yr auction. Yields were down by 0.5bp to 1bp from yesterday in the 7-yr and longer zone. As of this writing, yields on the current 10-yr JGBs are down 0.5bp from yesterday's final close (17:00JST) at 0.31%, while the 20s are down 0.5bp at 1.08%, vs 1.085% earlier. The current and new 30s are down 0.5bp at 1.385%, vs 1.38% earlier, while the 40s are flat at 1.535, vs 1.54% earlier.
