Market Roundup
- FBI tells Congress it has not changed conclusion on Clinton e-mails, clears Clinton – Reuters.
- NBC-WSJ poll has Clinton leading Trump by four points, 44% vs 40%.
- Jump in Florida, Nev early voting could reap Latino gains for Clinton
- CFTC IMM CTA data - Specs up USD bets in the latest week, highest since Jan, EUR net shorts 137k, JPY net longs 43k, GBP net shorts 82k, lowest since Sept.
- BoJ Sept 20-21 Policy Board minutes – Most see a delay in meeting inflation target, to continue with current policy, two usual dissenters proffer anti arguments, nothing to counter market expectations of December ease.
- Japan MoF Asakawa – Eyeing impact of US election on market, will take appropriate steps if needed – Jiji, Reuters.
- Japan Sept real wages +0.9% y/y, total cash earnings +0.2%, overtime -1.3%.
- China replaces reformist FinMin Lou Jiwei, Xiao Jie new FinMin – FT.
- China moves to stop elected independence-advocating Hong Kong lawmakers from taking seats – Financial Times.
- FOMC Vice Chair Fischer– Labor market strong, Fed could overshoot goals.
- ECB VP Constancio - EZ inflation could rise to 1.3% by March – Reuters.
- Australia Oct overall job ads +1.0% m/m, +5.2% y/y, Sept unch, +3.8%.
- Australia Oct PCI 45.+, -5.5% m/m, lowest in 20 months.
- New Zealand Stats Bureau corrects Q3 CPI to +0.3% q/q, from +0.2%, +0.4% y/y vs +0.2%.
Economic Data Ahead
- (0200 ET/0700 GMT) Norway Sep manufacturing output, +3.8% m/m forecast; last -6.2%.
- (0200 ET/0700 GMT) Germany Sep industrial orders, +0.3% m/m forecast; last +1.0%.
- (0300 ET/0800 GMT) Spain Sep industrial output; last +4.0% y/y.
- (0315 ET/0815 GMT) Switzerland Oct CPI, -0.2% y/y forecast; last +0.1% m/m, -0.2% y/y.
- (0430 ET/0930 GMT) Eurozone Nov Sentix index, 9.0 forecast; last 8.5.
- (0500 ET/1000 GMT) Eurozone Sep retail sales, -0.3% m/m, +1.3% y/y forecast; last -0.1%, +0.6%.
- (1000 ET/1500 GMT) United States Oct employment trends index; last 128.5.
- (1500 ET/2000 GMT) United States Sep consumer credit, $18.0 bln forecast; last $25.87 bln.
Key Events Ahead
- N/A Norway NOK4 bln zero% March ’17 NST-34 bill auction.
- (0415 ET/0915 GMT) ECB VP Constancio speaks at EC Commission public hearing in Brussels.
- (0540 ET/1040 GMT) Netherlands E1-2 bln 3 and 6-month DTC auctions.
- (0545 ET/1045 GMT) ECB/Belgium CB Smets speaks at Brussels Belgian Financial Forum.
- (0850 ET/1350 GMT) France E3.1-3.5/1.0-1.4/1.1-1.5 bln 3/6/12-month BTF note auctions.
- (0900 ET/1400 GMT) EZ FinMin meeting in Brussels.
- (1100 ET/1600 GMT) ECB Lautenschlaeger speaks at Buba Munich event.
FX Beat
DXY: The dollar rallied, strengthening investors’ confidence across the financial markets after the FBI stated that no criminal charges were warranted against Democrat Hillary Clinton. The greenback against a basket of currencies rose 0.7 percent to 97.55, hitting a 5-day high of 97.62 and off from a 3-week low of 96.89 hit in the prior session.
EUR/USD: The euro declined, retreating from a 4-week high of 1.1141 hit in the previous session, as the dollar strengthened after the FBI found no criminal charges in the case of Democrat Hillary Clinton's use of a private email server. According to NBC-Wall Street Journal poll released on Sunday, Hillary Clinton held a four-point lead over Republican Donald Trump, following the FBI clearance. The major trades 0.5 percent lower at 1.1082, having opened on a bearish gap at 1.1056. Investors will continue to track developments surrounding U.S. elections, ahead of the ECB Vice President Vitor Constancio speech, Eurozone's sentiment survey and retail sales data. Immediate resistance is located at 1.1141 (Previous Session High), a break above could take it till 1.1200. On the downside, support is seen at 1.1013 (10-DMA), a break below could drag it lower 1.1000.
USD/JPY: The dollar opened on a bullish gap above the 104.00 handle, after the FBI director cleared Hillary Clinton of the emails case, restoring investors’ confidence across the financial markets. The news also boosted chances of a Clinton win at Wednesday’s U.S. presidential elections, which gave her a lead of 1.8 points according to Real Clear Politics' polling average. The major trades 1.11 percent up at 104.24, having touched a 1-week high of 104.47 earlier in the session. The pair will continue to get influenced by U.S. election news flow ahead of the U.S. LMCI and consumer credit change data due later in the day. Immediate resistance is located at 104.80, a break above targets 105.20/ 105.50. On the downside, support is seen at 103.57 (5-DMA), a break below could take it near 103.00.
GBP/USD: Sterling declined below the 1.2500 handle, as the greenback rallied across the board after the FBI concluded that there have been no criminal activities in Clinton's emails. On Friday, the major rose to a near 1-month high on the back of better economic data, less dovish BoE and England's high court ruling that the government required parliamentary approval to trigger Article 50. Sterling trades 0.5 percent down at 1.2454, having hit a high of 1.2557 in the previous session, its highest since Oct. 7. The pair is likely to remain on the downside, as the U.S. presidential election looms. Immediate resistance is located at 1.2550, a break above could take it near 1.2600. On the downside, support is seen at 1.2394 (5-DMA), a break below targets 1.2350. Against the euro, the pound trades flat at 88.93 pence, having hit near 1-month high of 88.57 pence in the prior session.
AUD/USD: The Australian dollar edged down, as the U.S. dollar gained after FBI said no charges would arise on the U.S. presidential contender Hillary Clinton. Earlier in the session, the major declined to an intra-day low of 0.7656, however, it staged solid recovery on the back of Australia's upbeat ANZ Job Advertisement data, which rose 1.0 percent in October from -0.3 percent in September amid persisting risk-on market sentiment. The Aussie trades flat at 0.7672, after rising to an early high of 0.7685. The upside in the pair is likely to remain capped as markets wary over Wednesday's U.S. presidential elections’ outcome as both presidential candidates are tied almost neck-to-neck for the elections’ victory. Immediate support is seen at 0.7685 (Session Low), a break below could drag it near 0.7642 (10-DMA). On the upside, resistance is located at 0.7690, a break above targets 0.7720.
NZD/USD: The New Zealand dollar rose to a 1-1/2-month high, but soon edged lower as the greenback gained over the FBI news. Markets remain cautious ahead of U.S. presidential election, where a Trump victory will trigger a high degree of uncertainty about his policies on geopolitics, immigration and free trade. Moreover, investors also wary over Reserve Bank of New Zealand (RBNZ) rates decision on Thursday, which is expected to ease rates by 25 basis points to an all-time low of 1.75 percent. The Kiwi trades 0.2 percent lower at 0.7307, having hit a high of 0.7347, it’s strongest since September 10. The pair will be driven by the U.S election-related news flow, ahead of U.S. economic releases. 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 the dollar strengthened after the FBI stated that no criminal charges were warranted in the case of Democrat Hillary Clinton's use of a private email server.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.7 percent.
Tokyo's Nikkei advanced 1.61 percent at 17,177.21 points, Australia's S&P/ASX 200 index rose 1.31 percent to 5,248.70 points and South Korea's KOSPI was trading 0.77 percent higher at 1,997.51 points.
Shanghai composite index rose 0.22 percent to 3,132.46 points, while CSI300 index was trading 0.1 percent higher at 3,357.06 points.
Hong Kong’s Hang Seng was trading 0.62 percent up at 22,781.98 points. Taiwan shares ended added 1.3 percent at 9,189.84 points.
Commodities Recap
Crude oil prices steadied, after declining to a near 3-month low on Friday, as traders saw opportunistic buying following sharp declines in the previous week. International benchmark Brent crude was trading 0.9 percent higher at $45.99 per barrel by 0354 GMT, having hit a low of $45.06 on Friday, its lowest since Aug 11. U.S. West Texas Intermediate crude gained 0.98 percent at $44.53 a barrel, pulling away from a 6-week low of $43.55 hit in the previous session.
Gold prices slumped, halting its 6-days winning streak as the U.S. dollar and global equities strengthened after the FBI cleared charges against Democrat Hillary Clinton just two days ahead of the U.S. election. Spot gold was trading 0.9 percent down at $1,292.00 an ounce at 0406 GMT, having hit a low of $1,287.62 earlier in the session. U.S. gold futures fell 0.7 percent to $1,295.80 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 1.8243 percent higher by 0.041 bps, while 5-year was 0.053 bps up at 1.2955 percent.
The Australian government bonds slumped 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 Treasury note rose 2 basis points to 2.377 percent (high intraday), the yield on 15-year note also climbed 2 basis points to 2.747 percent and the yield on short-term 2-year bounced 3 basis points to 1.681 percent.
The New Zealand government bonds closed modestly higher on rising speculation that the Reserve Bank of New Zealand will lower its official cash rate by 25 basis points to a new record low of 1.75 percent in its Thursday's monetary policy meeting. The yield on the benchmark 10-year bond fell 1 basis point to 2.800 percent, the yield on 5-year note ended nearly 1 basis point lower at 2.338 percent and the yield on short-term 2-year note slid 1 basis point to 2.100 percent.
