Market Roundup
- Eurozone Nov Markit Composite Flash PMI increases to 54.4 (forecast 53.9 ) vs previous 53.9.
- Eurozone Nov markit Manufacturing flash PMI increases to 52.8 (forecast 52.3 ) vs previous 52.3.
- Eurozone Nov Markit Services flash PMI increases to 54.6 (forecast 54.1 ) vs previous 54.1.
- Germany Nov Markit Composite flash PMI increases to 54.9 vs previous 54.2.
- Fed's Dudley expects U.S. economy to do "OK" in 2016, 2017.|
- Fed's Dudley: Modest U.S. rate hike would have tiny consequences for China.
- Fed's Dudley: 'Very good chance' U.S. will return to 2 pct target, avoid deflationary cycle.
- Germany Nov Markit Services flash PMI increases to 55.6 (fcast 54.3 ) vs previous 54.5.
- Germany Nov Markit Manufacturing flash PMI increases to 52.6 (forecast 52.0 ) vs previous 52.1.
- Czech Central Banker: Central bank must be forward-looking in macro-prudential policy.
- France Nov Markit Composite flash PMI decreases to 51.3 vs previous 52.6
- France Nov Markit Manufacturing flash PMI increases to 50.8 (forecast 50.8 ) vs previous 50.6.
- France Nov Markit Services flash PMI decreases to 51.3 (forecast 52.6 ) vs previous 52.7.
- Hong Kong October underlying CPI +2.3 pct from year earlier.
- Hong Kong October headline CPI +2.4 pct from year earlier.
- Taiwan October industrial output -6.15 pct y/y.
- Singapore October core CPI +0.3 pct y/y .
- Brazil's 2015 inflation forecast 10.33 pct vs 10.04 pct previous week - Weekly Central Bank Survey.
- Brazil's 2015 year-end selic rate forecast 14.25 pct vs 14.25 pct previous week - Weekly Central Bank Survey.
Economic Data Ahead
- (0900 ET/1400 GMT) Mexico is scheduled to release the retail sales data for September. Retail sales rose 1.5 percent in August from the previous month, marking four consecutive months of increases, pointing to a modest recovery in domestic spending in Latin America's No. 2 economy.
- (0945 ET/1445 GMT) Financial data firm Markit's preliminary U.S. manufacturing Purchasing Managers' Index probably dropped to 53.9 in November from 54.1 in October.
- (1000 ET/1500 GMT) U.S. home resales likely dropped 2 pct in October to an annual rate of 5.40 million units after hefty gains in the prior month, according to a survey of economists. September's sales pace of 5.55 million units was the second highest since 2007.
FX Beat
EUR/USD: The euro was steady in early trade in Europe after hitting its lowest in more than 7 months in Asian session, traders with interest from options markets repelling a first attack on $1.0600. It inched down 0.1 percent on the day to $1.0632, after trading as low as $1.0600. The pair has recovered till 1.0645 after the release of upbeat Euro zone PMI but declined from that level on account of fears of more ECB easing and rumours of US Fed to increase discount rates today. Minor support is around 1.0600 and break below will drag the pair further down till 1.0525/1.0500 level. It is facing minor resistance around 1.0680 and break above targets 1.0720/1.0770. Overall bearish invalidation is only above 1.0830. The euro hit a 4-month low against the Australian dollar at A$1.4679 earlier on Monday, but later recovered as a slide in commodity prices weighed on the Aussie. It held near 5-month lows at NZ$1.6276 and a break of NZ$1.6152 would be the weakest since June.
USD/JPY: The Japanese yen was weaker against the dollar ahead of a week lightened in trading terms by a holiday in Japan on Monday and the Thanksgiving holiday in the United States. By 0855 GMT, it was down 0.3 percent at 123.125 yen. The pair recovered till 123.26 at the time writing, Intraday trend is weak as long as resistance 123.60 holds. Any break above 123.60 will take the pair to new level 124.15/125. On the downside major support is at 122.48 and break below targets 122/121.50.
GBP/USD: Sterling dropped down against both the dollar and euro on Monday, with investors focusing on testimony from the heads of the British finance ministry and Bank of England later in the week for direction. It fell by a third of a percent to $1.5148, taking it closer to a 7-month trough of $1.5027 hit earlier this month. Against the euro, it inched down 0.1 percent, to 70.10 pence. Cable has broken minor trend reversal level at 1.5150 a short term decline till 1.5080/1.5030 is possible. On the higher major resistance is around 1.5220 (support turned into resistance) and break above targets 1.5250/1.5300. Overall bearish invalidation is only above 1.5335 (19 th Nov 2015 high), minor resistance is around 1.5175.
USD/CHF: Economists told several Swiss newspapers that the Swiss National Bank should make more efforts to protect Switzerland's economy from the impact of an overvalued franc. The pair has recovered till 1.02168 after making a low of 1.01200. Overall trend reversal can happen only below 1.0120. On the downside major upport is around 1.0120 and break below targets 1.0075/1.0040. Its minor support is around 1.017/1.0150 and the major resistance is around 1.0220 and break above targets 1.0300.
AUD/USD: The Australian dollar held near 4-month highs against a soggy euro as expectations of further easing by the European Central Bank(ECB) underpinned demand for carry trades. The euro dropped to A$1.4679, its lowest since July, after shedding 1.5 percent on Friday. The Aussie stood at $0.7185, having fallen from an early peak of $0.7249 in part due to a drop in copper prices. Support was found at $0.7185 and resistance near $0.7250, a level tested four times in as many weeks. The pair's further bullishness can be seen only above 0.7250 and break above targets 0.7300/0.7380. On the lower side minor support is around 0.7150 and break below targets 0.7115/07080. Intra day bullish invalidation is only below 0.7150.
Equities Recap
European shares started the day lower dragged down by a steep fall in commodities and energy stocks on demand fears. The pan-European FTSEurofirst 300 was down 0.8 pct, after ending at 3-month highs on Friday, while the Euro STOXX 50 index was 0.7 pct lower, Germany's DAX was down 0.09 pct, Britain's FTSE 100 slipped 0.6 pct and France's CAC 40 fell 0.2 pct in early trades.
Japan's Nikkei was closed for a holiday. MSCI's broadest index of Asia-Pacific shares outside Japan closed off 0.2 pct, China's CSI300 Index ended down 0.6 pct at 3,753.34 points, HK's Hang Seng Index finished down 0.4 pct at 22,665.90 points, Shanghai Composite Index lost 0.6 pct while closing at 3,610.31 points.
Commodities Recap
Oil prices slipped, pulled by the rise in the USD to 7-month highs, more losses are seen triggered by the mismatch between global supply and demand. U.S. WTI crude futures dropped $1.26 a barrel to $40.64 a barrel. Benchmark January Brent futures were also down 90 cents at $43.76 a barrel.
Gold stretched losses on Monday, falling towards a near 6-year low reached last week, weighed on by a robust USD and upbeat comments from US Fed officials on a possible U.S. rate hike next month. Spot gold dropped 0.7 pct to $1,070.01 an ounce, down for a 13th session in the 16 trading days this month.
Treasuries Recap
US 10-year Treasury yeild stood at 2.2905, rising +0.028 pct.
Euro zone bond yields rose as Belgium kicked off a week of long-dated bond sales that could dampen a recent rally born out of expectations for more European Central Bank easing. German 10-year yields rose 2 basis points (bps) to 0.50 percent, coming off a 3-week low of 0.47 percent last week.
UK Gilts opened 27 ticks lower than the settlement of 118.17 as market talk of the possible Fed lift off gathered pace
Japan markets are closed due to national bank holiday.
New Zealand government bonds eased a tick, pushing yields 2 bps higher across the curve. Australian government bond futures dropped, with the 3-year bond contract down 3 ticks at 97.830, pulling close to 5-month lows. The 10-year contract lost 3.5 ticks to 97.0300, while the 20-year contract shed 4 ticks to 96.5000.
