Market Roundup
- EUR/USD -0.23%, USD/JPY 0.27%, GBP/USD 0.21%, EUR/GBP -0.37%
- DXY 0.13%, DAX 0.48%, FTSE 0.01%, Brent -0.36%, Gold -0.02%
- U.S. Congress poised for a major test on tax legislation
- Need for Brexit transition seen in UK and Europe - Carney
- Markets should not expect ECB to raise asset buys: Mersch
- Great Britain Oct Retail Sales YY -0.3% vs 1.2%, forecast -0.6%, revised 1.3%
- Great Britain Oct Retail Sales Ex-Fuel YY -0.3% vs 1.6%, forecast -0.4%
- EZ inflation not greatly impacted by oil price surge: ECB's Jazbec
- Still appears to be a disconnect between growth and inflation: ECB's Praet
- EZ Oct Inflation, Final YY 1.4% vs 1.4%, forecast 1.4%
- EZ Oct Inflation Ex Food & Energy YY 1.1% vs 1.1%, forecast 0.9%
- BOJ should consider selling put options on Japan stocks: Japan Post Bank CIO
- Banking body head warns about impact of BOJ negative rate policy
- China c. bank adviser expects less forceful deleveraging in 2018
Economic Data Ahead
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 4,000 to a seasonally adjusted 235,000 for the week ended Nov. 10, while continuing claims for the week ended Nov. 3 is expected to decline to 1.895 million from previous 1.901 million.
- (0830 ET/1330 GMT) The U.S. Labor Department publishes import and export prices index for the month of October. The import prices are likely to have gained 0.4 percent after rising 0.7 percent in September, while exports are also expected to have edged up 0.4 percent after increasing 0.8 percent in the prior month.
- (0830 ET/1330 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity index decreased to 25.0 in November from 27.9 in October.
- (0830 ET/1330 GMT) Statistics Canada releases manufacturing shipments data for the month of September. Manufacturing sales are likely to have decreased 0.3 percent after rising 1.6 percent in August.
- (0830 ET/1330 GMT) The Statistics Canada will report foreign portfolio investment in domestic stocks for the month of September.
- (0830 ET/1330 GMT) The Statistics Canada will release investment in foreign securities figures for the month of September.
- (0915 ET/1415 GMT) The Federal Reserve is likely to report that industrial production rose 0.5 percent in October, after increasing 0.3 in the prior month.
- (0915 ET/1415 GMT) The Federal Reserve Board is expected to report that capacity utilization edged up to 76.3 percent in October from 76.0 percent in September.
- (1000 ET/1500 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index rose to 68 in November, after posting a similar increase in October.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending November 10.
- (1030 ET/1530 GMT) The Bank of Canada releases its semi-annual publication featuring articles related to the Canadian economy and to central banking.
- (1630 ET/2130 GMT) New Zealand will release its Business PMI index for the month of October. The index stood at 57.5 in the previous month.
- (1645 ET/2145 GMT) The Statistics New Zealand will report its producer price index input and output data for the third quarter. PPI input rose 1.2 percent and output increased 1.3 percent during the second quarter.
Key Events Ahead
- (0900 ET/1400 GMT) Bank of England Governor Mark Carney, Deputy Governor for Monetary Policy Ben Broadbent, Deputy Governor for Financial Stability Jon Cunliffe, Chief Cashier Jo Place, Deputy Governors Dave Ramsden and Sam Woods participate in Future Forum, St George's Hall Liverpool.
- (0910 ET/1410 GMT) Cleveland Federal Reserve Chief Loretta Mester is scheduled to speak before the Cato Institute 35th Annual Monetary Conference in Washington.
- (1145 ET/1645 GMT) FedTrade Operation 15-year Fannie Mae / Freddie Mac (max $515 mn)
- (1310 ET/1810 GMT) Fed President Robert Kaplan participates in a moderated Q&A session before the CFA Society Houston.
- (1500 ET/2000 GMT) European Central Bank (ECB) Vice President Vítor Constâncio's Speech.
- (1545 ET/2045 GMT) Federal Reserve Board Governor Lael Brainard speaks on "Fintech" before the Third Annual Financial Stability Conference hosted by the U.S. Treasury Department Office of Financial Research and the University of Michigan Center on Finance, Law, and Policy, in Ann Arbor.
- (1630 ET/2130 GMT) San Francisco Federal Reserve Bank President John Williams speaks at the San Francisco Fed's Asia Economic Policy Conference.
FX Beat
DXY: The dollar steadied after falling to a 4-week low in the previous session, as upbeat U.S. economic data bolstered the possibility of the Federal Reserve raising interest rates next month and beyond. The greenback against a basket of currencies traded 0.1 percent up at 93.97, having touched a low of 93.40 on Wednesday, its lowest since Oct. 20. FxWirePro's Hourly Dollar Strength Index stood at -4.38 (Neutral) by 1100 GMT.
EUR/USD: The euro declined, extending previous session losses, as the greenback rebounded from 4-week lows ahead of the key U.S. House vote on the tax reform plan. The European currency traded 0.2 percent down at 1.1765, having touched a high of 1.1860 on Wednesday; its highest since Oct. 13. FxWirePro's Hourly Euro Strength Index stood at 61.19 (Bullish) by 1100 GMT. The near-term resistance is around 1.1800 and any break above will take the pair to next level till 1.1825/1.1860. On the lower side, major support is around 1.17360 (100- day MA) and any break below will drag it to next level till 1.1700/1.1660/1.1600/1.1553 (Nov 7th, 2017 low).
USD/JPY: The dollar rebounded, reversing most of its prior day losses, boosted by renewed strength seen in the shorter duration Treasury yields, in response to heightened prospects of a December Fed rate hike on upbeat U.S. CPI figures. The major was trading 0.3 percent up at 113.17, having hit a low of 112.48 on Wednesday, its lowest since Oct. 19. FxWirePro's Hourly Yen Strength Index stood at 6.13 (Neutral) by 1100 GMT. On the lower side, any close below 112.20 confirms minor weakness, a decline till 111.60 (55- day EMA)/111.13 likely. Any convincing close above 114.50 (161.8% fib) confirms minor bullishness, a jump till 116 likely.
GBP/USD: Sterling rose, extending gains for the third consecutive session after data showed UK’s headline retail sales expanded at a monthly 0.3 percent in October, reversing the previous monthly contraction. However, Brexit negotiations and rising UK political concerns continued to drive the sentiment around the British Pound. Sterling traded 0.2 percent higher at 1.3197, having hit a low of 1.3061 on Monday, its lowest since Nov. 6. FxWirePro's Hourly Sterling Strength Index stood at 141.70 (Highly Bullish) by 1100 GMT. The pair should close above 1.3230 for further bullishness. Any daily close above 1.3230 (61.8% retracement of 1.3320 and 1.30390) will take it to next level till 1.3300/1.3380. On the lower side, near-term support is around 1.31300 and any break below will drag it to next level till 1.3100/1.3060/1.30270. Against the euro, the pound was trading 0.4 percent up at 89.16 pence, having hit a low of 89.80 pence the day before, its lowest since Oct. 20.
USD/CHF: The Swiss franc eased after rising to a 3-week high in the previous session, as the greenback gained on renewed upside seen in U.S. Treasury yields and a solid rebound staged by the European stocks. The major trades 0.4 percent up at 0.9922, having touched a low of 0.9846 the day before, it’s lowest since Oct. 24. FxWirePro's Hourly Swiss Franc Strength Index stood at 37.11 (Neutral) by 1100 GMT. The near-term support is around 0.9850 (233- day MA) and any convincing break below will drag the pair to next level till 0.9805 (38.2% retracement of 0.9420 and 1.00390)/0.9770. The major resistance is around 0.9938 (20- day MA) and any break above will take it to next level till 0.9980/1.000/1.0040.
AUD/USD: The Australian dollar bounced from near 4-month lows as an upbeat employment report boosted the bid tone around the Aussie. The Aussie trades flat at 0.7591 having hit a low of 0.7569 earlier; it’s lowest since Jun. 27. FxWirePro's Hourly Aussie Strength Index stood at -107.52 (Highly Bearish) by 1100 GMT. On the lower side, the pair has broken 0.7600 and any close below targets 0.7550/0.7500. The near-term resistance is around 0.7651 (233- H MA) and any break above targets 0.7680/0.7730/0.7780.
Equities Recap
European shares rebounded, snapping their longest losing streak since October 2016, while the greenback steadied after falling to a 4-week low the prior day as investors awaited the key U.S. House Republicans vote on tax reforms.
The pan-European STOXX 600 index rose 0.7 percent to 384.50 points, while the FTSEurofirst 300 index gained 0.6 percent to 1,512.94 points.
Britain's FTSE 100 trades 0.01 percent higher at 7,373.94 points, while mid-cap FTSE 250 rallied 0.4 percent to 19,767.76 points.
Germany's DAX rose 0.6 percent at 13,058.39 points; France's CAC 40 trades 0.7 percent up at 5,336.62 points.
Commodities Recap
Crude oil prices slightly eased, giving back some of its previous session gains, as investors turned cautious following a rise in U.S. crude production and inventories. International benchmark Brent crude was trading 0.2 percent down at $61.70 per barrel by 1046 GMT, having hit a low of $61.19 on Tuesday, its lowest since Nov. 3. U.S. West Texas Intermediate was trading 0.1 percent down at $55.25 a barrel, after falling as low as $54.87 on Wednesday, its lowest since Nov. 3.
Gold prices gained, reversing some of its previous session losses, as investors’ awaited series of speeches from global central bank officials'. Spot gold was 0.1 percent up at $1,278.11 per ounce at 1051 GMT, having declined from Wednesday's 3-1/2-week high of $1,289.34. U.S. gold futures for December delivery dipped 0.1 percent to $1,276.70.
Treasuries Recap
The U.S. Treasuries plummeted as investors wait to watch the country’s initial jobless claims, scheduled for release today by 13:30GMT. The yield on the benchmark 10-year Treasuries jumped nearly 3 basis points to 2.36 percent, the super-long 30-year bond yields climbed 2 basis points to 2.80 percent and the yield on short-term 2-year note traded 2-1/2 basis points higher at 1.71 percent.
The UK gilts slumped after the country’s retail sales beat market expectations during the month of October. The yield on the benchmark 10-year gilts, rose 1-1/2 basis points to 1.29 percent, the super-long 30-year bond yields also climbed nearly 1-1/2 basis points to 1.87 percent and the yield on the short-term 2-year too traded nearly 1 basis point higher at 0.48 percent.
The German bunds plunged after Eurozone’s consumer price-led inflation index (CPI) for the month of October, met market expectations, coming in at 1.4 percent y/y and 0.1 percent m/m, albeit unchanged from that in September. The German 10-year bond yields, which move inversely to its price, climbed 1-1/2 basis points to 0.39 percent, the yield on 30-year note jumped nearly 3 basis points to 1.28 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.74 percent.
The New Zealand bonds closed higher as the country’s ongoing political and policies uncertainties continue to weigh. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 4 basis points to 2.865 percent, the yield on 20-year note also slid 5 basis points to 3.430 percent and the yield on short-term 2-year ended 3 basis points lower at 2.005 percent.
The Japanese bonds gained following firmness in the U.S. Treasuries, bolstered by rising risk aversion as equities slumped and also taking their cue from a flattening U.S. Treasury yield curve. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 0.045 percent, the yield on long-term 40-year declined nearly 1 basis point to 0.987 percent and the yield on short-term 2-year declined 1 basis point to -0.184 percent.
The Australian bonds remained volatile after October employment report portrayed a mixed picture of the economy. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1/2 basis point to 2.595 percent, the yield on the long-term 30-year note jumped 1 basis point to 3.376 percent and the yield on short-term 2-year declined 1 basis point to 1.806 percent.
