Market Roundup
- ECB's Draghi- We will do what we must to raise inflation as quickly as possible.
- Draghi says monetary policy will remain accommodative for as long as needed to secure a sustained adjustment in the path of inflation.
- Weidmann sees no reason to talk down economic outlook or paint gloomy picture.
- UK Oct PSNCR m/m decreases to -3.997 bln gbp vs previous 17.877 bln gbp.
- UK Oct PSNB, m/m decreases to 7.467 bln gbp vs previous 8.628 bln gbp.
- UK Oct PSNB ex-banks decreases to 8.245 bln gbp (forecast 6.000 bln gbp) vs previous 9.406 bln gbp.
- Swiss National Bank's Jordan says Franc is overvalued and an overvaluation is corrected over time, remains to be seen when -Paper.
- Germany Oct Producer Prices yy decrease to -2.3 % (forecast -2.0 %) vs previous -2.1 %.
- Germany Oct Producer Prices mm stays flat at -0.4 % (fcast -0.2 %) vs previous -0.4 %.
- Turkey Nov Consumer Confidence increases to 77.15 vs previous 62.78.
- Swedish CBank's Jochnick says still room to act through repo rate, bond buys.
- Greek September Current Account Balance +0.838 bln eur from +0.61 bln eur in same month last year- Cen Bank.
- Greek Government targets primary budget deficit of 0.2 pct of GDP in 2015 - final budget.
- Danish Nov Consumer Confidence 5.6 points - Statistics Denmark.
- (0830 ET/1330 GMT) Investors will be watching out for Canada's inflation and retail sales data. The annual inflation rate is expected to remain flat at 1.0 percent in October from September, according to a survey of economists. Retail sales probably rose 0.2 percent in September.
- (0900 ET/1400 GMT) Mexico's economy is expected to have expanded 0.6 percent in the third quarter from the previous three-month period, according to a survey of economists. On an annual basis, the economy probably expanded 2.4 in the third quarter from the same period in 2014.
- (1000 ET/1500 GMT) European Commission releases consumer confidence index for the month of November, which is likely dropped to 7.5 against a dip of 7.7 in the previous month.
- (1400 ET/1900 GMT) Argentina's economic activity likely grew 2.5 percent in September, compared with the same month a year earlier.
- (0900 ET/1400 GMT) Federal Reserve Bank of St. Louis President James Bullard speaks on the economy and monetary policy before the Fort Smith Chamber of Commerce/University of Arkansas Fort Smith joint event.
- (1115 ET/1615 GMT) Federal Reserve Bank of New York President William Dudley will participate in a discussion on the economy with Hofstra University students in Hempstead, N.Y.
- (1345 ET/1845 GMT) U.S. Treasury Assistant Secretary Mark Mazur will participate in a panel before the National Tax Association 108th Annual Conference on Taxation in Boston.
- (1415 ET/1915 GMT) Dudley is scheduled to visit Canon U.S.A. to discuss with company leaders the impact of the firm's presence in the community and its recent innovations, and to tour the facility, in Melville, N.Y.
USD: The dollar traded at $1.0683 per euro, was also up 0.2 percent at 123.00 yen and rose 0.4 percent against the basket of currencies at 99.336.
EUR/USD: Comments from Mario Draghi sent the euro down half a percent to below $1.07 on Friday after two days of gains which dealers now put down to a closing of trading positions by a handful of major investors. Draghi said the ECB would do what it had to to raise inflation as fast as possible and pointed to the benefits of a cut in deposit rates to aid an expansion of its QE programme. The single currency also fell almost half percent against sterling and 0.3 percent against the Swiss franc. It traded at 69.90 pence and 1.0849 francs respectively. The pair retreated till 1.06639 from a high of 1.07625 at the time of writing. Its minor support is around 1.0660 and break below will drag the pair further down till 1.0630/1.0600 level. It is facing major resistance around 1.0720 and break above targets 1.0770/1.0830. Overall bearish invalidation is only above 1.0830.
USD/JPY: The pair has broken a major support 122.80 and declined till 122.62 and is currently trading around 122.75. Intraday trend is weak as long as resistance 123.20 holds. Any break above 123.20 will take the pair to new level 123.75/124.15.
GBP/USD: Sterling climbed towards a 3-months high against the euro and on a trade-weighted basis on Friday, as investors preferred sales in the single currency after ECB President strengthened expectations of further easing in the near term. The euro fell 0.5 percent to 69.85 pence, within striking distance of a 3-month low of 69.82 pence hit on Wednesday. Sterling's gains against the euro saw the trade-weighted index rising to 94.1, having hit a peak of 94.2 on Thursday. Against the dollar, sterling was trading flat at $1.5288. Overall trend is still weak as long as resistance 1.5370 holds. On the lower side minor support is around 1.5250 and break below targets 1.5220 which will be acting as short term support and any break below will drag the pair till 1.5150/1.5080. Short term bullishness is only above 1.5370 any break above 1.5370 will take the pair to 1.5395/1.5450.
USD/CHF: The pair has made a low of 1.0122 and jumped till 1.01673 level. Today SNB's Jordan said Switzerland's currency is overvalued but will weaken over time. On the downside minor support is around 1.0120 and break below targets 1.0075/1.0040. The major support is around 0.9980 and break below will drag the pair till 0.9950/0.9930. The minor resistance is around 1.0710 and break above targets 1.0220/1.0300.
AUD/USD: The Australian dollar fetched $0.7207 on Friday after rising from Thursday's low of $0.7103. It has gained 1 percent for the week, having proved resilient to sliding commodity prices. A sustained break above the 100-day moving average of $0.7213, a level tested three times this month would be a bullish signal and open the way to $0.7384. It made even bigger strides against the euro which fell to A$1.4912, not far from a three-month low of A$1.4865 touched on Thursday. It held near 3-month highs against the yen. The pair's major resistance is around 0.7225 and break above targets 0.7300/0.7350. On the lower side minor support is around 0.7150 and break below targets 0.7115/07080. Short term bullish invalidation is only below 0.7150.
NZD/USD: The New Zealand dollar gained 0.5 percent to $0.6597, adding to a gain of 1.4 percent on Thursday when upbeat domestic producer prices data triggered a rally, It was up 0.4 percent this week. Resistance was found near $0.6580. Short-covering flows dominated in thin trading.
Equities Recap
World shares were on track to post their best week in over a month on Friday, despite metal markets tumbling, especially copper near 6-1/2-year lows, nickel near 2003 low, and Baltic sea freight index at all-time low
European shares were flat near 3-month highs with a benchmark index set for its best week in a month. The FTSEurofirst 300 was down 0.1 percent to 1,499.92 points, having touched its highest since August on Thursday. It was up 3 percent so far this week, putting it on track for its best week since October. The STOXX Europe 600 dropped down 0.1 percent, while the Euro STOXX 50 drifted 0.4 percent lower.UK's FTSE, France's CAC, Germany's DAX rose 0.4 pct, 0.3 pct and 0.4 pct respectively.
Japan's Nikkei closed up 0.10 pct at 19,879.81. Mainland Chinese shares were flat on the day, CSI300 Index rose 0.8 pct for the week and Shanghai Composite Index ended the week with 1.4 pct gain. Seoul shares ended the day up 0.01 pct. Australia's S&P/ASX 200 Index closed up 0.09 pct at 5,247.50 points.
MSCI's broadest index of Asia-Pacific shares outside Japan was almost unchanged on the day, though has recorded gains of 1.7 percent so far this week.
Treasuries Recap
U.S. 2-year Treasury yields were up for their fourth week in the last five. 10-year Treasury yield stood at 2.250 percent vs U.S. close of 2.246 percent on Thursday, while 30-year yield at 3.011 percent.
Japanese government bonds mostly weakened on Friday, as investors refrained from active buying ahead of Monday's national holiday in Japan. The yield on the 10-year cash bond added 2 bps to a 1-week high of 0.315 percent. In the superlong sector, the yields on 30-year JGBs and 40-year JGBs both rose 1.5 bps to 1.395 percent and 1.555 percent, respectively. Led by weaker cash prices, the 10-year JGB futures price ended down 0.15 point at 148.39.
UK Gilts opened 3 ticks lower than the settlement of 117.95 and have been operating in a rather narrow 8 tick range. Not much in the way of drama so far with 10-year cash respecting support from yesterday's low of 1.881%.
Germany's benchmark 10-year Bund yield touched a new 3-week low at 0.47 percent. Greek bond yields headed back towards their lowest levels in more than a year below 7 percent after Greece's parliament approved a reform bill to secure further bailout funds from international lenders.
Australian government bond futures climbed, with the 3-year bond contract up a tick at 97.880. The 10-year contract added 3.5 ticks to 96.0850, while the 20-year contract gained 4 ticks to 96.5600. New Zealand government bonds were mixed. Yields inched higher among the shorter-dated bonds.
Commodities Recap
Spot gold was set to finish the week near its cheapest in more than five years as the metal struggles against a stronger dollar ahead of a widely expected U.S. rate rise next month. Spot gold rose 0.4 percent to $1,085.80 an ounce by 0609 GMT. U.S. gold rose 0.7 percent to $1,086 an ounce.
Oil futures lost early gains to trade near 3-month lows on Friday on a persistent supply glut that has cut prices by up to 13 percent since the start of November. U.S. crude West Texas Intermediate dropped 11 cents to $40.43 a barrel as of 0731 GMT, after edging up in earlier trades.
