Market Roundup
- Singapore Oct Industrial Production +2.5 Pct M/M Seasonally Adjusted (Reuters Poll +2.0 Pct)
- Singapore Oct Industrial Production -5.4 Pct Y/Y (Reuters Poll -5.3 Pct)
- Australia Q3 new CAPEX -9.2% q/q, record fall, -3.0% eyed, big miss, '15/16 estimate A$120.4 bln, Q3 bldg CAPEX -9.8% q/q, plant/machinery -8.2%.
- Japan PM Abe - Corporate tax to be cut more than planned next year - Reuters.
- Japan Keidanren - Y3 trln or 14% CAPEX growth over next three years if government adopts sweeping reform - Reuters.
- Japan Oct crude oil imports -3.7% y/y, LNG -12.8%, total coal -2.9%, copper-zinc exports up large.
- PBOC Sheng - Yuan appreciation trend intact in long run - MNI.
- Fed gives largest US banks extra year for debt rule calculation - Reuters.
- Europe's central banks in quandary as Fed tightening nears - Reuters.
- Australia APRA plans to simplify securitization rules - Reuters.
- NZ Oct trade deficit NZ$963 mln, annual deficit NZ$3.237 bln, imports NZ$4.79 bln, exports NZ$3.83 bln, NZ$937 mln/3.37 bln defs, NZ$5.01/4.02 bln expected.
Economic Data Ahead
- (0300 ET/0800 GMT) Spain Q3 GDP - final, +0.8% q/q, +3.4% y/y forecasted; prelim +0.8%, +3.4%.
- (0330 ET/0830 GMT) Sweden Oct trade balance, SEK2 bln surplus forecasted; last SEK3.3 bln surplus.
- (0330 ET/0830 GMT) Sweden Oct household lending, +7.4% y/y forecasted; last +7.3%.
- (0400 ET/0900 GMT) Eurozone Oct money supply M3, +4.9% AR forecasted; last +4.9%.
- (0400 ET/0900 GMT) Eurozone Oct money supply M3 - 3-mo moving average; last +5.0%.
- (0400 ET/0900 GMT) Eurozone Oct private loans; last +0.6%.
Key Events Ahead
- US Thanksgiving Day holiday.
- N/A Italy E5.5 bln 6-month BOT auction.
- (0540 ET/1040 GMT) Bank of Spain Gov Linde speech at Madrid conference.
- (0700 ET/1200 GMT) Euro Union Dombrovski, Moscovici, ZThyssen press conference in Brussels.
FX Beat
USD: Renewed weakness in the single currency helped the dollar index scale an 8-1/2-month peak of 100.170, it last stood at 99.777. Against the yen, the dollar was little changed at 122.60.
EUR/USD: The euro remained shaky early on Thursday, having slid to its lowest in over seven months on the prospect of further policy stimulus from the European Central Bank. The common currency skidded as far as 1.0565 against the Greenback, reaching a low not seen since mid-April. It has recovered overnight slump and last traded at 1.0624. Against the yen, it touched a seven-month low of 129.77 before edging back to 130.30. Overall bearish theme remains intact, immediate support for EUR/USD is seen at 1.0565 (Session low Nov 25) and resistance on the topside lies at 1.0634 (5 DMA).
USD/JPY: The greenback was little changed on the yen at 122.70, with the Yen consolidating its recent northerly trajectory, despite a broadly stronger greenback. The pair was largely rangebound on the day, with highs at 122.74 and lows at 122.56. The pair is for now holding above the 122 handle with strong support on the downside at 122.41 (21 DMA and 23.6 % Fibo of Oct 15-Nov 18 rise). Breaks below could take the pair to 121.63 (Nov 6 lows). Topside may be capped by daily Tenkan at 122.98, with minor resistance at 122.67 (5 DMA).
AUD/USD: Commodity currencies managed to hold their ground against the greenback, though the Australian dollar has stepped back to 0.7253 from a one-month high 0.7283. Australia's Capex data coming in well below the expected bracket of between - 2.9% / -4.% weighed on Aussie bulls. AUD/USD fell over 30 pips on the release as the actual number Q/Q for Q3 arrived at -9.2%. The data comes in stark contrast with the latest blockbuster employment report seen in Australia, which took everyone by surprise, making things more complicated for the RBA. Bears could target key 100 DMA at 0.7201, while 0.7250 is resistance on the upside.
AUD/NZD: AUD weakness prevalent across crosses after poor Australia Capex data. AUD/NZD pressured lower, hits session lows at 1.0972, and has hence pared some losses to currently trade at 1.0984. Rally in metals has helped peg further AUD slide. AUD/NZD downside has strong support by daily Tenkan at 1.0970. Breaks below could take the pair to 1.0935 levels. On the flipside immediate resistance is seen at 1.1026 (cloud base) and further at 1.1086 (Nov 25 highs).
AUD/JPY: Aussie was hammered on poor Australia capex data, pushing AUD/JPY lower. The pair failed near three-month highs and dropped sharply thereon, down around -0.39% to 88.67. Renewed weakness in USD/JPY on the back of a minor correction after Wednesday's rally, also accentuated the downside in the cross. Techs point lower, correction in the pair could extend upto 87.70 levels. Breaks above 89.15 could buoy bulls taking the pair higher.
Equities Recap
Asian shares advanced on Thursday, while the euro remained under pressure on growing bets that the European Central Bank will roll out more stimulus soon even as the U.S. Federal Reserve looks set to raise interest rates.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, after Wall Street put in a nearly flat performance ahead of the U.S. Thanksgiving holiday.
The Shanghai Composite Index was changed, while shares in Hong Kong and South Korea all climbed about 1 percent.
Japan's Nikkei closed Up 0.49 Pct At 19,944.41, with Australia's Index climbing up 0.35 Pct at 5,211.90 Points and Seoul closed up by 1.14 Pct.
U.S. markets will be closed on Thursday and most of Friday afternoon.
Commodities Recap
Gold hovered close to its lowest in nearly 6 years on Thursday, as the dollar held at multi-month highs. Spot gold held steady at $1,072 an ounce after dropping 0.4 percent on Wednesday. The metal dipped to $1,064.95 last week, the lowest since February 2010.
Brent climbed up 3 cents, or 0.06 percent, to $46.20 a barrel. It settled up 5 cents, or 0.11 percent, at $46.17 a barrel the day before, after falling more than $1 to a session low $45.03. U.S. crude's West Texas Intermediate (WTI) futures had increased 16 cents, or 0.37 percent, to $43.20 a barrel as of 0337 GMT. They closed the previous session up 17 cents, or 0.4 percent, at $43.04 a barrel.
Treasuries Recap
US 10-year Treasury yield stood at 2.2341 and the yield gap between U.S. 2-year and 10-year Treasuries narrowed to 1.30 percentage points, the narrowest since early February, according to Reuters data.
Australian government bond futures extended gains, with the three-year bond contract up 4 ticks at 97.930. The 10-year contract increased by 3.5 ticks to 97.1300, while the 20-year contract was 4.5 ticks higher at 96.6150.
New Zealand government bonds gained, with yields 3 basis point lower across the curve.
Canadian government bond prices were mixed across the maturity curve, with the 2-year price down 1.5 Canadian cents to yield 0.629 percent and the benchmark 10-year up 24 Canadian cents to yield 1.589 percent.
