Market Roundup
- China Jan-Oct non-financial outbound direct investment +53.3 pct y/y in U.S. dollar terms to $145.96 bln - Commerce Ministry
- China Jan-Oct FDI +0.2 pct y/y in U.S. dollar terms to $103.91 bln - Commerce Ministry
- BOJ says it received no bids for its special fixed-rate buying operations on Thursday
- Philippine Central Bank says no need to make further policy adjustments at this time
- BOJ Gov Kuroda: Don't think losses on BOJ's JGB holdings would hurt trust in yen
- BOJ Gov Kuroda: Don't have to accept JGB yield gains simply because treasury yields are rising
- BOJ Gov Kuroda: Possible to raise or lower 10-yr JGB yield target depending on economic situation
- Australia Oct participation rate decrease to 64.4 % (forecast 64.6 %) vs previous 64.5 %
- Australia Oct unemployment rate stays flat at 5.6 % (forecast 5.6 %) vs previous 5.6 %
- Australia Oct employment increase to 9.8 k (forecast 20.0 k) vs previous -29 k (revised from -9.8 k)
- Australia Oct full-time employment increase to 41.5 k vs previous -74.3 k (revised from -53 k)
Economic Data Ahead
- (0330 ET/0830 GMT) Sweden Unemployment Rate
- (0400 ET/0900 GMT) Italy Trade Balance
- (0430 ET/0930 GMT) Great Britain Retail Sales
- (0430 ET/0930 GMT) Great Britain Retail Sales Ex- Fuel
- (0500 ET/1000 GMT) Eurozone Inflation
- (0500 ET/1000 GMT) Eurozone Inflation Ex. Food & Energy
- (0500 ET/1000 GMT) Eurozone Inflation Ex.Tobacco
- (0500 ET/1000 GMT) Eurozone Infl. Exenerfoodalctob
Key Events Ahead
- (0850 ET/1350 GMT) New York Fed chief William Dudley speeh
- (1000 ET/1500 GMT) The U.S. Federal Reserve Chair Janet Yellen will testify before the Senate Banking Committee
FX Beat
DXY: The dollar edged down across the board as U.S. Treasury yields eased. The greenback against a basket of currencies traded flat at 100.30, having touched a 14-year high of 100.57 in the previous session. FxWirePro's Hourly Dollar Strength Index stood at 38.89 (Bias Neutral) by 0500 GMT.
EUR/USD: The euro edged up, halting its eight-day losing streak as the dollar took a breather after rising to a 14-year high against a basket of currencies on speculation that the Trump government will adopt inflationary policies. On Wednesday, the major hit an 11-month low after data showed U.S. manufacturing output increased for a second straight month in October. However, lower-than-expected reading in the PPI and in the industrial production report weakened the bid tone around the greenback, helping the major to recover some ground. The European currency traded 0.1 percent up at 1.0696, having struck a low of 1.0666 on Wednesday, its lowest level since December 3. FxWirePro's Hourly Euro Strength Index stood at -49.13 (Bias Neutral) by 0400 GMT. Markets now await Eurozone's consumer price index and series of U.S. economic data, ahead of Fed Chair Yellen’s testimony. Immediate resistance is located at 1.0739 (5-DMA) a break above could take it near 1.0800. On the downside, support is seen at 1.0650, a break below could drag it near 1.0500.
USD/JPY: The dollar declined against the Japanese yen after rising to a 5-1/2 month high on Wednesday, after U.S. data showed lower-than-expected producer price index and industrial production reading. The major hit an intra-day low of 108.55, but pared losses after the Bank of Japan announced special buying operations for Japanese government bonds. The dollar continues to remain underpinned by expectations that the U.S. Federal Reserve is on track to hike interest rates this year and Trump administration to enact a fiscal stimulus. The pair trades 0.1 percent lower at 108.96, having hit a high of 109.75 in the previous session, it’s strongest since Jun. 1. Investors’ attention now remains on series of U.S. economic data, including unemployment claims, consumer price index and housing starts, ahead of Fed Chair Yellen’s testimony for further clues on the strength of the U.S. economy and December rate hike. FxWirePro's Hourly Yen Strength Index stood at -134.32 (Bias Highly Bearish) by 0400 GMT. Immediate resistance is located at 109.75 (Previous Session High), a break above targets 110.00. On the downside, support is seen at 108.00 (5-DMA), a break below could take it lower 107.30.
GBP/USD: Sterling inched down against the dollar, extending losses for the fourth consecutive session, as investors focused on the risks surrounding Brexit and ignored Britain's upbeat unemployment rate, which fell to the lowest level in 11 years. The major is seen making a minor recovery largely on the back of weaker-than-expected U.S. fundamentals, amid ongoing weakness in the treasury yields. Sterling trades 0.1 percent down at 1.2431, hovering towards a low of 1.2379 hit on Tuesday, it’s lowest since Nov 10. FxWirePro's Hourly Sterling Strength Index stood at 1.06 (Bias Neutral) by 0400 GMT. Markets focus now shifts towards the UK retail sale, which is expected to post a solid growth. Immediate resistance is located at 1.2482 (5-DMA), a break above could take it over 1.2500. On the downside, support is seen at 1.2400, a break below targets 1.2357 (20-DMA). Against the euro, the pound trades 0.2 percent lower at 86.05 pence, after declining as low as 87.07 pence on Tuesday, it’s lowest since Nov. 10.
AUD/USD: The Australian dollar hovered near a 2-month low as the greenback continued to rise on expectations that inflation and interest rates will rise in the U.S. under President-elect Donald Trump administration. The major failed to benefit from Australian jobs data, which showed unemployment rate s.a. in October stood at a three-year low of 5.6 percent, while employment rose a net 9,800, but below forecast of 20,000 gain. Moreover, lower copper and oil prices also weakened the bid tone around the pair, which limited its recovery attempts. The Aussie trades flat at 0.7478, having touched a low of 0.7460 in the previous session, its weakest since Sept. 15. FxWirePro's Hourly Aussie Strength Index stood Neutral at - 40.55 by 0500 GMT. Investors will continue to digest domestic Jobs report, ahead of series of U.S. economic data and Fed Yellen's testimony. Immediate support is seen at 0.7460 (Previous Session Low), a break below could drag it lower 0.7420. On the upside, resistance is located at 0.7500, a break above targets 0.7550
NZD/USD: The New Zealand dollar gained, reversing most of its previous session losses after data released overnight showed Job advertisements in New Zealand rose 0.6 percent for the month of October. ANZ Bank survey showed a rise of 17.8 percent on a yearly basis and the gains were led by the construction and transport industry, followed by the tourism and retail sectors. The major hit a 1-month low on Wednesday as the U.S. dollar surged across the board on the back of higher Treasury yields and December rate hike expectations. The Kiwi trades 0.4 percent higher at 0.7099, hovering just above a low of 0.7035 hit in the day before, it’s weakest since Oct. 13. FxWirePro's Hourly Kiwi Strength Index was Neutral at 7.99 by 0500 GMT. Investors will continue to track board based market sentiment, ahead of U.S. CPI data and Fed Yellen’s testimony. Immediate resistance is located at 0.7130, a break above targets 0.7180. On the downside, support is seen at 0.7050, a break below could drag it near 0.7030/ 0.7000.
Equities Recap
Asian shares gained, while the greenback slipped from a more than 13-1/2 year peak set overnight as the U.S. Treasury yields eased.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent but was still down 1 percent on the week.
Tokyo's Nikkei declined 0.12 percent at 17,840.41 points, Australia's S&P/ASX 200 index edged up 0.03 percent to 5,329.20 points and South Korea's KOSPI was trading 0.08 percent higher at 1,981.03 points.
Shanghai composite index declined 0.27 percent to 3,196.13 points, while CSI300 index was trading 0.23 percent lower at 3,421.49 points.
Hong Kong’s Hang Seng was trading 0.08 percent down at 22,262.96 points. Taiwan shares added 0.4 percent at 8,995.26 points.
Commodities Recap
Crude oil prices edged up, despite industry report showing a larger-than-expected build in U.S. oil stocks. International benchmark Brent crude was trading 0.2 percent higher at $46.46 per barrel by 0402 GMT, having hit a high of $47.53 in the previous session, its highest since Nov. 2. U.S. West Texas Intermediate crude rose 0.22 percent at $45.41 a barrel, having touched a 2-week high of $46.38 on Wednesday.
Gold nudged up, reversing some of its previous session losses, as a rally in the U.S. dollar stalled after rising to its highest in nearly 14-year against a basket of currencies on Wednesday. Spot gold was up 0.1 percent at $1,226.04 an ounce at 0408 GMT, after declining 0.25 percent the day before. U.S. gold futures rose 0.27 percent to $1,227.20 an ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.2031 percent lower by 0.02 bps, while 5-year yield was 0.021 bps down at 1.6509 percent.
The Australian government bonds gained as investors remained cautious ahead of the United States consumer inflation data and Federal Reserve Chair Janet Yellen’s testimony, in an attempt to estimate the Fed's most likely policy step. The yield on the benchmark 10-year Treasury note fell 6 basis points to 2.59 percent, the yield on 15-year note dipped 5 basis points to 3.012 percent and the yield on short-term 2-year slid 5 basis points to 1.77 percent.
The New Zealand government bonds closed higher as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year bond fell 10 basis point to 3 percent, the yield on 7-year note ended nearly 9 basis points lower at 2.673 percent and the yield on short-term 2-year note slid 7-1/2 basis points to 2.060 percent.
Canadian government bond prices rose across a flatter yield curve in sympathy with U.S. Treasuries. The 2-year rose 0.5 Canadian cents to yield 0.66 percent and the benchmark 10-year climbed 32 Canadian cents to yield 1.502 percent. However, the 10-year yield touched its highest intraday level since December, at 1.602 percent, as markets expect U.S. president-elect Donald Trump's economic policies to boost inflation.
