Market Roundup
- South Africa Nov Gross Gold & Forex Reserves Decrease to 45.14 Bln $ (Forecast 45.825 Bln $) vs previous 46.051 Bln $
- South Africa Nov Net Gold & Forex Reserves Decrease to 40.471 Bln $ (Forecast 40.998 Bln $) vs previous 41.308 Bln $
- Saudi Arabia Nov Emirates NBD Composite PMI Increase to 56.3 vs previous 55.7
- Japan Oct Leading Indicator Increased to +1.3 vs previous -2.1
- Japan Oct Coincident Indicator MM Increased to +2.0 vs previous -0.3
- BoJ Gov Kuroda - QQE working, not causing significant financial imbalances, will continue policy course, excessive regulation not good
- BoJ Policy Board Sato - Long list of negatives including likely low energy prices near-term, China growth-assets/deflationary effects, Europe debt, higher USD funds costs for Japanese firms, low CAPEX intentions, diminishing impact of BoJ QE - Reuters.
- EconMin Amari - Revised Q3 GDP likely around zero, -0.8% AR prelim - NHK.
- Foreign shoppers, deposit withdrawals add to Japan's cash supply - Nikkei.
- Japan end-Nov foreign reserves $1.233 trln, end-Oct $1.244 trln.
- Reuters Tankan Japan Dec mfg index +9, non mfg +18, Nov +3 and +22, +10 and +18 forecast in March, mood up, sign of slow recovery.
- Global investors venture into China bonds after IMF boost - IFR.
- SIC - China to grow 6.5%+ in '16, CPI to rise about 1.5% - China Sec Journal.
- BIS - Foreign claims on Chinese borrowers below peak - Reuters.
- BIS - Uneasy calm in markets about upcoming US rate hike, EZ non-performing loans far too high, EM vulnerabilities have not gone away - Reuters.
- St Louis Fed Bullard - Time for liftoff, concerned over low global rates, Fed must be willing to pause/speed pace of rate hikes - Reuters.
- Minny Fed Kocherlakota - Fed aimed for slow recovery - Reuters.
- Hillary Clinton - Markets have already processed a possible Fed hike - RTRS.
- United Kingdom PM Cameron - May be forced to campaign for Brexit - Daily Telegraph.
- United Kingdom mfg outlook darkens, output-orders hit six-year low - EEF survey.
- ECB lowered stimulus ambitions after hitting opposition - Reuters.
- Ex-SNB Rich - No ideal solution for SNB - NZZ am Sonntag.
- Australia Nov overall job ads +1.3% m/m, newspapers -4.3%, internet +1.4%.
- Australia Nov PCI -1.4 pt to 50.7, expansion moderates as new orders fall.
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Oct industrial output, +0.7% m/m forecast; last -1.1%.
- (0400 ET/0900 GMT) Norway Oct manufacturing output; last +0.9% m/m.
- (0430 ET/0930 GMT) Eurozone Dec Sentix index, 17.0 forecast; last 15.1.
- (1000 ET/1500 GMT) United States Nov employment trends index; last 129.5.
- (1500 ET/2000 GMT) United States Oct consumer credit, $20.0 bln forecast; last $28.92 bln.
Key Events Ahead
- N/A EuroGroup meeting in Brussels.
- N/A UN COP 21 conference in Paris (till December 11).
- N/A Netherlands E1-2 bln 2 and 3-month DTC auctions.
- N/A France E0.1-5/3.3-3.7/1.4-1.8/1.1-1.5 bln 3/3/6/12-month BTF auctions.
- N/A United States TsySec Lew, IMF Furusawa meetings with Brazil FinMin Levy.
- (0900 ET/1400 GMT) Bank of England Gov Carney Brussels EZ parliamentary testimony.
- (1230 ET/1730 GMT) St Louis Fed Bullard speech at Ball St University, Indiana luncheon.
USD: The dollar index against a basket of major currencies steadied on Monday and stood at 98.444 after bouncing back 0.75 percent on Friday, having recovered a bit of ground late last week after nonfarm payrolls increased by 211,000 last month which strengthened the case for an imminent hike in U.S. interest rates.
EUR/USD: The euro edged down 0.2 percent at $1.0859 but was within the range of Thursday's peak of $1.0981 rallying there from a near 8-month low of $1.0523. Upbeat US Nonfarm Payrolls last Friday, failed to move the pair, the greenback was unable to gain on a good Payroll, the pair may continue rallying this week. The vicious short-covering rally in the euro last week was a blow to euro bears and could discourage them from re-establishing short positions anytime soon. The pair is easing to session lows in quiet Asian trading. Support is located at Friday's 1.0851 low and break below targets 1.0805 (38.2 % Fibo of 1.0523/1.0981). Resistance on the upside is seen at 1.0897 (Nov 5th high)
USD/JPY: The U.S. dollar was stronger across the board though the DXY failed to recoup more than about a quarter of Thursday's heavy EUR-led losses. The pair trades above the 123 handle, with a high of 123.32 and a low of 123.15 on the day. The pair is stuck between narrowing 21-day Bollis. Orders to continue to reflect this range but bias up on solid US NFP. Options to bracket- 122.00 USD2.3 bln, 123.00-50 848 mln, 124.00-10 1.5 bln. Market focus this week will be on a slew of Chinese data which are expected to show a sluggish economy. Trade figures are due on Tuesday, followed by inflation on Wednesday and industrial output and retail sales on Saturday. Immediate support for the pair is seen at 122.94 (21 DMA), while resistance lies at 123.37 (Dec 4 high).
AUD/USD: The antipodeans kept just below recent peaks on Monday. The Australian dollar was a touch softer against the Greenback at 0.7223, having touched 0.7386 on Friday, a level not seen since August. This week, the focus will be on Australia's job report, a bevy of Chinese data and the Reserve Bank of New Zealand's (RBNZ) rate review. Trading in the pair has been capped below 0.7342 (Dec 2 highs) which is initial resistance on the topside ahead of 0.7362 (Doudle top Dec 3 & Oct 15). Support on the downside is seen at 0.73 (psychological level) and further below at 0.7293 (Dec 2 low).
NZD/USD: The New Zealand dollar edged down to 0.6609, from a 1-month peak of 0.6787 set on Friday. Investors are expecting the RBNZ to cut interest rates on Thursday as the economists polled by Reuters expect rates to be trimmed a quarter of a percentage point to 2.50 percent.Gains in the pair were capped at 0.6787 (76.4 % Fibo of Fib of Oct-Nov slide). The pair is on the day struggling at the 0.67 handle. Breaks below cloud top at 0.6667 could take the pair to 0.6650 (daily Tenkan) and further below to 0.66 levels. Resistance was found around 0.6787 (76.4 % Fibo of Fib of Oct-Nov slide) ahead of 0.6800 (Oct 26 high). Stochs are at overbought and show a bearish crossover, RSI is also biased lower.
GBP/USD: USD buoyed by risk-on rally in equities extends gains into Asia, supported by the impressive US jobs data on Friday. Cable trades slightly weak on Monday's Asian trade, down -20 pts in a quiet Asia. Conflicting signals suggest consolidation in the pair, momentum studies, 5, 10 & 20 DMAs conflicting - horizontal 20 day Bolli's. Later in the day, BOE Governor Carney's testimony will be closely monitored for fresh cues on the BOE interest rates outlook. At the time of writing GBP/USD is trading at 1.5096, with initial support at 1.5079 (session low) and then 1.4889 (76.4% of April/June rise). On the upside, resistance is located at 1.5160 (Fri's high) then 1.5204 (50% of Oct/Dec fall).
USD/CNY: China's yuan dropped against the dollar on Monday after the PBoC set a weaker midpoint to reflect dollar's strength on expectations of a U.S. interest rate hike this month. The spot market opened at 6.4021 per dollar and was trading at 6.4085 at midday, 0.1 percent weaker than the previous close. Offshore yuan was trading 0.77 percent weaker than the onshore spot at 6.4584 per dollar.
Equities Roundup
Asian share markets bounced back on Monday after upbeat U.S. jobs report suggested the U.S. was expected for its first increase in interest rates in almost a decade.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.15 percent while the CSI300 index edged up 0.2 percent.
Australia's S&P/ASX 200 Index ended up 0.19 pct at 5,161.30 points while Nikkei closed up 0.99 pct at 19,698.15 with Seoul Shares down by 0.21 pct.
Commodities Roundup
Gold lingered near a 3-week high on Monday, strengthened by short covering after strong U.S. nonfarm payrolls data bolstered the case for a Federal Reserve rate hike next week. Spot gold gained 2.5 percent to its highest since Nov. 16 at $1,088.70 an ounce and was up 2 percent at $1,082.96 an ounce by 1924 GMT while Silver was up 2.8 percent at $14.47 an ounce and platinum gained 4.3 percent to $878.89 an ounce.
Crude prices dropped on Monday in the first trading session after OPEC-members disagreed on output targets to reduce a bulging glut that has resulted in oil prices falling by more than 60 percent since June 2014. U.S. crude was trading at $39.58 a barrel at 0038 GMT, down 39 cents while Brent was l down 24 cents at $42.76 a barrel.
Treasuries Roundup
U.S. 10-Year Treasuries yield stood at 2.2888 percent up by 0.014.
Australian government bond futures lingered multi-month lows as the 3-year bond contract was steady at 97.820, having touched its lowest since May at 97.770 and the 10-year contract added half a tick at 97.0250, while the 20-year contract was up half a tick at 96.5150.
New Zealand government bonds were flat across the curve.
The Canadian Government 2-year bond price was up 4.5 Canadian cents to yield 0.629 percent as the benchmark 10-year rose 36 Canadian cents to yield 1.581 percent.
