Market Roundup
- Fed's Williams says post election sees no change in how he approaches monetary policy
- Fed's Williams says fiscal policy is just one factor on list of what affects U.S. Economy
- Mexico finance minister says will continue to monitor variables to be able to respond to any given scenario, when asked about interest rates
- Mexico finance minister says doesn't rule out more volatility in the peso
- New Zealand's reserve bank reduced OCR to 1.75 percent
- South Korea Sept l-money supply growth to increase to 7.9 % vs previous 7.7 %
- Australia Sept investment housing finance increased to 4.6 % vs previous 0.1 %
- Australia Sept housing finance increased to 1.6 % (forecast -2 %) vs previous -3 %
- United kingdom Oct RICS housing survey increase to 23 (forecast 19) vs previous 17
- Japan Sept machinery orders YY decrease to 4.3 % (forecast 3.5 %) vs previous 11.6 %
- Japan Sept machinery orders mm decrease to -3.3 % (forecast -0.8 %) vs previous -2.2 %
Economic Data Ahead
- (0200 ET/0700 GMT) Norway Consumer Price Index
- (0200 ET/0700 GMT) Norway Producer Price Index
- (0245 ET/0745 GMT) France Industrial Output
- (0245 ET/0745 GMT)Franc Non-Farm Payroll
- (0300 ET/0800 GMT) Denmark CPI
- (0400 ET/0900 GMT) Italy Industrial Output
- (0500 ET/1000 GMT) Greece CPI
- (0500 ET/1000 GMT) Greece Unemployment Rate
- (0600 ET/1100 GMT) Brazil Retail Sales
Key Events Ahead
- ( 0815 ET/1315 GMT) Federal Reserve Bank of St. Louis President James Bullard speech
FX Beat
DXY: The dollar recovered across the board as markets tried to interpret Donald Trump's surprise victory in the U.S. presidential election. The greenback against a basket of currencies trades 0.1 percent lower at 98.57, having hit a high of 98.70 on Wednesday, it’s highest since Oct. 28.
EUR/USD: The euro steadied after declining to a near 2-week low below the 1.1000 handle on Thursday as U.S. markets reacted positively to Republican candidate Donald Trump's victory in the presidential election. The major rose as high as 1.1299, hitting 2-months high in the previous session, however, it tumbled to a low of 1.0906 as the dollar rebounded on the back of a rise in U.S. Treasury yields strengthened by higher inflation expectations. The major trades 0.1 percent up at 1.0926, attempting to extend gains above the 1.0900 handle. In absence of macro-fundamental drivers from the Eurozone docket, markets attention will remain on U.S. weekly jobless claims and FOMC member Bullard’s speech for further momentum on the pair. Immediate resistance is located at 1.0978 (20-DMA) a break above could take it over 1.1000. On the downside, support is seen at 1.0900, a break below could drag it lower till 1.0850.
USD/JPY: The dollar edged down after rising to an early high of 105.95, its highest since July 27 as markets speculate that Donald Trump would enact protectionist trade policies and put upward pressure on U.S. wages and boost inflation. On Wednesday, the major fell to a 1-month low of 101.19 as global markets plunged on Trump's victory in the presidential election, however, retreated as the treasury yields rebounded. The pair trades 0.2 percent lower at 105.46, having hit an intra-day low of 104.96. Investors still expect the U.S. Federal Reserve to hike interest rates at its December policy meeting after holding them since December 2015 rate hike. Immediate resistance is located at 106.00, a break above targets 106.40/ 106.80. On the downside, support is seen at 104.77 (5-DMA), a break below could take it lower 104.25 (20-DMA).
GBP/USD: Sterling steadied above the 1.2400 handle after rising to a high of 1.2545 in the previous session following a surprise victory for Donald Trump in the U.S. presidential election. The major rose to an intra-day high of 1.2442 after data released overnight showed Britain's RICS Housing Price Balance rose 23 percent in October, surpassing estimates of 19 percent and previous 18 percent. Sterling trades flat at 1.2409, attempting to sustain gains above the 1.2400 level. Investors will continue track board based market sentiment, amid a lack of fundamental data from the UK docket. Immediate resistance is located at 1.2450, a break above could take it near 1.2500. On the downside, support is seen at 1.2353 (10-DMA), a break below targets 1.2300. Against the euro, the pound trades 0.1 percent lower at 88.01 pence, having hit an early high of 87.27 pence, it’s highest since Oct. 4.
AUD/USD: The Australian dollar gained, as riskier assets rebounded on hopes that a Donald Trump presidency could strengthen U.S. economic growth. On Wednesday, the major tumbled to a near 2-week low of 0.7579, however, it trimmed losses to close above the 0.7600 handle. The pair was also supported by better-than-expected Australia’s September Home Loan and investment lending for homes report, which rose 1.6 percent and 4.6 percent, respectively. The Aussie trades 0.5 percent up at 0.7666, having hit a high of 0.7729 earlier in the week, its highest since April 21. Investors will continue to track overall market sentiment, ahead of U.S. unemployment claims figures. Immediate support is seen at 0.7600, a break below could drag it near 0.7550. On the upside, resistance is located at 0.7691 (5-DMA), a break above targets 0.7740.
NZD/USD: The New Zealand dollars declined to a 1-week low after Reserve Bank of New Zealand cut its benchmark rate by 25 basis points to a record low of 1.75 percent, and stated that further easing may not be required. The central bank indicated that future rate cuts were unlikely as it forecast inflation headed back into its target range of 1 to 3 percent, however, did not entirely rule out further easing. The Kiwi trades 0.3 percent lower at 0.7257, having struck a low of 0.7236, it’s lowest since Nov 2. Investors will continue to digest RBNZ policy decision and Governor Graeme Wheeler's comments, ahead of U.S. economic data. Immediate resistance is located at 0.7318 (5-DMA), a break above targets 0.7350. On the downside, support is seen at 0.7236 (Session Low), a break below could drag it near 0.7200.
Equities Recap
Asian shares bounced back and the U.S. dollar firmed in a surprising rebound from the shock of Republican Donald Trump's presidential victory.
MSCI's broadest index of Asia-Pacific shares outside Japan bounced 1.7 percent after declining 2.4 percent in the previous session.
Tokyo's Nikkei lost 5.88 percent at 16,161.00 points, Australia's S&P/ASX 200 index gained 3.08 percent to 5,315.20 points and South Korea's KOSPI was trading 2.11 percent higher at 1,932.21 points.
Shanghai composite index rose 1.26 percent to 3,167.63 points, while CSI300 index was trading 1.15 percent higher at 3,391.98 points.
Hong Kong’s Hang Seng was trading 2.07 percent up at 22,872.65 points. Taiwan shares added 2.3 percent at 9,152.18 points.
Commodities Recap
Crude oil prices declined in early trade, weighed down by report showing U.S. crude inventories rose by 2.4 million barrels to 485 million barrels last week, while markets digested Republican candidate Donald Trump's victory in the presidential election. International benchmark Brent crude was trading 0.3 percent lower at $46.37 per barrel by 0356 GMT, having hit a 3-month low of $44.38 in the previous session. U.S. West Texas Intermediate crude declined 0.4 percent at $45.13 a barrel, after falling to a low of $43.06 on Wednesday, it’s lowest since Sept. 20.
Gold held gains after briefly rising to a 6-week high in the previous session, as global equity markets and the U.S. dollar showed an unexpected rebound in the wake of Republican Donald Trump's presidential victory. Spot gold was trading 0.6 percent higher at $1,284.72 an ounce at 0403 GMT, having hit a high of $1,337.16 on Wednesday, its highest since Sep. 27, U.S. gold futures were up 0.41 percent to $1,278.70 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 1.7269 percent lower by 0.135 bps, while 5-year yield was 0.164 bps down at 1.1656 percent.
Australian government bond futures slumped to 6-month lows, with the 3-year bond contract was down 14 ticks at 98.30. The 10-year contract fell 25 ticks to 97.56, the largest daily drop since mid-2013.
New Zealand government bonds tumbled, with yields jumping 15 to 23 basis points across the curve.
