Market Roundup
- FBI obtains search warrant to search newly discovered e-mails potentially relevant to Clinton investigation - Washington Post.
- US Sen. Harry Reid accuses FBI director playing politics with email probe - Washington Post.
- Mark Carney stands ready to serve full 8-year term at BoE - Financial Times.
- BoE Gov Carney likely to leave in 2018 – Times.
- Mark Carney may announce decision to quit as early as Thursday – Guardian.
- CFTC IMM CTA data – Specs lift USD bets to highest since late Jan, EUR net shorts largest since then but GDP net shorts lowest since Sept, JPY net longs still, up on week.
- Japan Sept industrial output unch m/m, +1.0% forecast, Aug +1.3%, +1.1% and +2.1% forecast for October and November, previous October estimate +1.2%.
- Japan Sept retail sales -1.9% y/y, -1.8% forecast, follows weak household spending data Friday.
- Japan Sept housing starts +10.0%v y/y, +5.2% forecast, constrct spending +4.3%.
- PBOC Fan Gang – To continue with exchange rate reform – Securities Times.
- Australia Sept private-sector credit +0.4% m/m, housing credit +0.5%, Aug +0.4%, +0.5%, Sept +5.4% and +6.4% y/y.
- New Zealand Oct ANZ biz confidence +24.5%, own activity +38.4%, Sept +27.9%, +42.4%.
- New Zealand Sept new dwelling consents +0.2% m/m, +13.7% y/y, Aug -1.5% m/m.
- Coal price rally comes to the rescue of commodity trading giants – Reuters.
Economic Data Ahead
- (0300 ET/0700 GMT) Norway Sep credit indicator, +5.0% y/y forecast; last +5.0%.
- (0400 ET/0800 GMT) Spain Sep retail sales; last +3.4% y/y.
- (0500 ET/0900 GMT) Spain Aug current account balance; last E3.0 bln surplus.
- (0530 ET/0930 GMT) Great Britain Sep mortgage approvals, 61.5k forecast; last 60.06k.
- (0530 ET/0930 GMT) Great Britain Sep mortgage lending, GBP3.0 bln forecast; last GBP2.94 bln.
- (0530 ET/0930 GMT) Great Britain Sep consumer credit, GBP1.5 bln forecast; last GBP1.57 bln.
- (0530 ET/0930 GMT) Great Britain Sep money supply M4; last +0.9%.
- (0600 ET/1000 GMT) Eurozone Q3 GDP – prelim, +0.3% q/q, +1.6% y/y forecast; flash +0.3%, +1.6%.
- (0600 ET/1000 GMT) Eurozone Oct inflation – flash, +0.5% y/y forecast; last +0.4%.
- (0600 ET/1000 GMT) Eurozone Oct – ex-food/energy, +0.8% y/y forecast; last +0.8%.
- (0600 ET/1000 GMT) Italy Oct CPI - flash, +0.2% m/m, +0.1% y/y forecast; last -0.2%, +0.1%.
- (0600 ET/1000 GMT) Italy Oct HICP – flash, +0.1% m/m, +0.4% y/y forecast; last +0.1%, +1.9%.
- (0700 ET/1100 GMT) Italy Sep producer prices; last -0.2% m/m, -1.1% y/y.
- (0830 ET/1230 GMT) United States Sep personal income, +0.4% m/m forecast; last +0.2%.
- (0830 ET/1230 GMT) United States Sep personal consumption, +0.5% m/m forecast; last unch, real -0.1%.
- (0830 ET/1230 GMT) United States Sep core PCE price index, +0.1% m/m forecast; last +0.2 m/m, +1.7% y/y.
- (0945 ET/1345 GMT) United States Oct Chicago PMI, 54.0 forecast; last 54.2.
- (1030 ET/1430 GMT) United States Oct Dallas Fed mfg business index; last -3.7.
- (1300 ET/1700 GMT) United States Sep Dallas Fed PCE; last +1.6%.
Key Events Ahead
- N/A BoJ Policy Board begins two-day meeting, no changes forecast.
- (0500 ET/0900 GMT) Norges Bank November net currency purchases, -NOK900 mln forecast, unch m/m.
- (0530 ET/0930 GMT) ECB zero% 7-day refi, E34 bln allotment forecast, E36 bln maturing.
- (0700 ET/1100 GMT) NZ Fonterra dairy auction, GDP price index last +1.4%, vol 2965 tons.
- (0950 ET/1350 GMT) France E2.9-3.3/1.0-1.4/0.9-1.3 bln 3/6/12-mont BTF note auctions.
- (1200 ET/1600 GMT) US TsySec Lew speaks at Oxford Union.
FX Beat
DXY: The dollar steadied after declining on news that the U.S. Federal Bureau of Investigation revealed its probe of newly found emails related to Clinton's use of a private server. The greenback against a basket of currencies trades 0.1 percent up at 98.46, after falling to 98.24 on Friday from a near 9-month high of 99.11 hit last week.
EUR/USD: The euro declined, after rising to a 1-week high in the previous session as investors eagerly await the upcoming Federal Reserve meeting for further insights on the timing of a U.S. interest rate hike. On Friday, the major gained almost 0.9 percent, its largest 1-day rise in nearly two months after the U.S. Federal Bureau of Investigation revealed it reopened an investigation of Democratic presidential candidate Hillary Clinton's use of a private email system, triggering fresh turmoil in markets, just days before the Nov. 8 presidential vote. The major trades 0.1 percent down at 1.0969, after rising as high as 1.0991 the prior day. Investors now await Eurozone's preliminary gross domestic product, consumer price index data and U.S. Personal Consumption Expenditures figures for further cues on the pair. Immediate resistance is located at 1.1013 (20-DMA), a break above could take it till 1.1040. On the downside, support is seen at 1.0928 (5-DMA), a break below could drag it lower 1.0900.
USD/JPY: The dollar recovered the bearish opening gap and strengthened against major peers as markets eye crucial central bank’s decision later in the week. The major posted a solid comeback from the opening bearish gap on diminishing expectations that FBI concerns would not damage Clinton’s chances of election victory. Moreover, divergent monetary policy outlooks between the Federal Reserve and the Bank of Japan kept the sentiment underpinned around the greenback. The BoJ is widely expected to stand pat at its 2-day policy review starting on Monday, while the Fed is also widely expected to keep its policy on hold at its policy meeting ending on Wednesday. The pair trades 0.1 percent up at 104.80, having touched an early high of 104.93. Immediate resistance is located at 105.30, a break above targets 105.60/ 106.00. On the downside, support is seen at 104.26 (10-DMA), a break below could take it near 104.00.
GBP/USD: Sterling steadied after declining to a 3-day low versus the dollar and 8-day low against the euro in the previous session on Northern Ireland High Court's ruling on Article 50. The major has lost almost a fifth of its value since the Brexit vote on growing worries that the economy would suffer from the single market withdrawal. However, data released last week showed the economy grew 0.5 percent between July-September, with growth accelerating to 2.3 percent on an annual basis. Sterling trades flat at 1.2189, having touched a high of 1.2214 earlier in the session. Markets will closely watch the UK's consumer credit and mortgage approvals for further direction on the major. Immediate resistance is located at 1.2270, a break above could take it over 1.2300. On the downside, support is seen at 1.2100, break below targets 1.1900. Against the euro, the pound trades 0.1 percent higher at 89.98 pence, after falling to an early 11-day low of 90.24 pence.
AUD/USD: The Australian dollar rose above the 0.7600 handle, filling up the bearish opening gap helped by a rebound in the prices of iron ore and coal - Australia's biggest exports. On Friday, the major hit a 2-week low as the greenback strengthened on stronger-than-expected economic growth data, which bolstered the case for a U.S. interest rate hike by the Federal Reserve. Moreover, the cautious tone ahead of a central bank policy meeting this week and nervousness about the outcome of the U.S. elections will continue to weigh on the Aussie. The pair trades 0.2 percent up at 0.7613, retreating from a low of 0.7557 hit in the previous session, its lowest since Oct.14. The movement in the major will be driven by board based market sentiment, ahead of series of U.S. economic data. Immediate support is seen at 0.7580, a break below could drag it lower 0.7550. On the upside, resistance is located at 0.7631 (10-DMA), a break above targets 0.7660.
NZD/USD: The New Zealand dollar declined, as increased nervousness ahead of the FOMC interest rates decision due later this week, triggered risk-off market sentiment. Markets are refraining from taking big positions following the reports of Clinton’s FBI probe, with over a week remaining ahead of the US presidential elections. The Kiwi trades 0.1 percent lower at 0.7154, after declining to an early low of 0.7137. Investors will continue to track overall market sentiment ahead of U.S. macro fundamental drivers for further cues on the direction of the major. Immediate resistance is located at 0.7180, a break above targets 0.7200. On the downside, support is seen at 0.7120, a break below could drag it lower 0.7100.
Equities Recap
Asian shares traded in a volatile trade as investors worried over news that the FBI is scheduling to review more emails related to Democratic presidential candidate Hillary Clinton's private server, ahead of the U.S. presidential election.
MSCI's broadest index of Asia-Pacific shares outside Japan hit a 6-week low before recovering up 0.2 percent.
Tokyo's Nikkei fell 0.12 percent at 17,425.02 points, Australia's S&P/ASX 200 index rose 0.7 percent to 5,321.00 points and South Korea's KOSPI was trading 0.5 percent lower at 2,009.12 points.
Shanghai composite index lost 0.27 percent at 3,095.97 points, while CSI300 index was trading 0.22 percent lower at 3,333.41 points.
Hong Kong’s Hang Seng was trading 0.17 percent up at 22,994.18 points. Taiwan shares edged down 0.2 percent at 9,290.12 points.
Commodities Recap
Crude oil prices declined after non-OPEC producers made no specific commitment to join OPEC in reducing oil output levels to balance prices. International benchmark Brent crude was trading 0.4 percent lower at $50.45 per barrel at 0412 GMT, having hit a near 1-month low of $49.35 in the previous session. U.S. West Texas Intermediate crude declined 0.25 percent at $48.49 a barrel, after falling to an early 4-week low of $48.16.
Gold prices held ground, after rising 0.6 percent in the previous session, amid a firm dollar and weaker equities, with markets awaiting the upcoming Federal Reserve meeting for further clues on the timing of the interest rate hike. Spot gold was trading 0.1 percent up at $1,276.90 an ounce at 0421 GMT, having fallen about 3 percent so far this month. U.S. gold futures were up 0.06 percent at $1,277.60 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 1.8433 percent lower by 0.002 bps, while 5-year was at 1.3229 percent.
The Australian government bond gained as investors remained cautious ahead of Tuesday’s monetary policy meeting for the Reserve Bank of Australia (RBA), where it is widely expected to keep interest rates on hold. The yield on the benchmark 10-year Treasury note fell 3 basis points to 2.355 percent, the yield on 15-year note dipped 2-1/2 basis points to 2.723 percent and the yield on short-term 2-year slid 4-1/2 basis points to 1.655 percent.
The New Zealand government bonds closed modestly higher as business confidence dipped in October. Investors now await the RBNZ’s survey of inflationary expectations report, which is scheduled to be released this week, which could be the catalyst for a rate cut from the central bank. The yield on the benchmark 10-year bond fell 1 basis point to 2.725 percent, the yield on 7-year note ended nearly 1 basis point lower at 2.408 percent and the yield on short-term 2-year note also slid 1 basis point to 2.020 percent.
