Market Roundup
- Nate Silver 538 gives Clinton a 72% chance of winning election
- USD/JPY +0.2%, EUR/USD +0.04%, GBP/USD +0.11%
- DXY -0.03%, DAX -0.15, Brent +0.35%, Iron +2.0%
- Germany Sept Industrial Output -1.8% m/m vs revised 3.0% previous, -0.5% expected
- Germany Sept Trade Balance EUR21.3 billion vs revised 21.6 billion previous, 23.0 billion expected
- UK Sept Industrial Output +0.3% y/y vs 0.7% previous, 0.8% expected
- UK Sept Manufacturing Output +0.2% y/y vs 0.5% previous, -0.1% expected
- Switzerland Oct Jobless adjusted 3.3% vs 3.3% previous, 3.3% expected
- NY Times – 84% chance Hillary win, Democrats 55% chance of Senate control
- Japan FinMin – FX stability important, may respond to JPY spike on US poll result
- UK Oct BRC like-for-like retail spending +1.7% y/y, total spending +2.4%,
- Australia Oct NAB business conditions index +6, confidence +4, Sept +8, +6.
Economic Data Ahead
- (1000 ET/1500 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of September. The report is expected to show that job openings rose 65,000 to a seasonally adjusted 5.5 million from 5.4 million in August.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
- (1645 ET/2145 GMT) The Statistics New Zealand will release Electronic Card Retail Sales figures for the month of October. The index posted a rise of 1.9 percent in the previous month.
- (1830 ET/2330 GMT) The Faculty of Economics and Commerce Melbourne Institute will release Australia's Westpac consumer confidence for the month of November. The index rose 1.1 percent in October.
- (1850 ET/ 2350) Japan's Customs Office will release Trade Balance (BOP Basis) figures for the month of September. The economy posted a trade surplus of 243.2 billion yen in the earlier month.
- (1850 ET/ 2350) Japan's Ministry of Finance is likely to report that Current Account (N.S.A) surplus narrowed to 1,960.2 billion yen in September from 2,000.8 billion yen in August.
Key Events Ahead
- (0745 ET/1245 GMT) Chicago Fed President Charles Evans will speak on current economic conditions and monetary policy at the Council on Foreign Relations in New York.
- (0945 ET/1445 GMT) FedTrade ops 30-Yr Fannie Mae/Freddie Mac max $2.250 billion
- (1105 ET/1605 GMT) Bank of Canada Deputy Governor Lawrence Schembri will give a speech in Halifax on the prospects for Canadian exports.
- (1145 ET/1645 GMT) FedTrade ops 15-Yr Fannie Mae/Freddie Mac max $650 million
- (1220 ET/1720 GMT) Chicago Fed President Charles Evans speech
FX Beat
DXY: The dollar stood firm as markets wagered on a victory for Hillary Clinton in the U.S. presidential election. The greenback against a basket of currencies traded flat at 97.74, having hit an intra-day low of 97.55.
EUR/USD: The euro steadied as the dollar edged down on profit taking ahead of the U.S. presidential elections outcome. The bid tone around the major weakened despite Democratic candidate Hillary Clinton remaining in the lead by 2-4 points, according to recent polls. Moreover, trading in the pair remained more subdued, as investors were reluctant to take too many big positions as Americans prepared to vote. The European currency traded 0.1 percent up at 1.1047, having hit an early low of 1.1029. The pair breaks major support daily Kijun-Sen 1.1055 and any close below 1.1055 confirms minor weakness, a decline till 1.1000 is possible. On the higher side, any break above 1.1178 (200- day MA) targets 1.1200 (Trendline joining 1.1630 and 1.13663) and any close above 1.1200 will take it to next level till 1.1300/1.13663.
USD/JPY: The dollar rose, extending previous session gains as markets braced for the U.S. presidential elections outcome, with the likelihood of a win for Democratic candidate Hillary Clinton. The bid tone around the major intensified after the FBI cleared Hillary Clinton over the emails probe. However, a Trump victory could cause a sudden spike in the safe-haven yen. The pair trades 0.2 percent higher at 104.66, having touched fresh 1-week high of 104.71. The major resistance is around 105.53 and break above targets 106.25/106.80. On the lower side, major support is around 104.10 (10- day MA) and any break below targets 103.35 (daily Kijun-Sen)/ 102.15 (38.2% retracement of 100.08 and 105.53).
GBP/USD: Sterling rose above the 1.2400 handle after data showed Britain's manufacturing growth picked up, indicating that the economy has coped well so far with the Brexit vote shock. However, an unexpected drop in the industrial production capped the major's upside. Industrial output fell 0.4 percent m/m in September, replicating its August performance, while manufacturing production grew 0.6 percent, recording it’s the biggest rise since April. Sterling trades 0.1 percent up at 1.2412, having touched an intra-day high of 1.2439. The major support stands at 1.2350 and any indicative break below targets 1.2290 (5- day MA)/1.2265 (21- day MA). On the higher side, any break above 1.2560 will take the pair to next level till 1.2600/1.2680 (55- day EMA). Against the euro, the pound trades flat at 88.99 pence.
USD/CHF: The Swiss franc declined as the dollar attempted a minor recovery ahead of the U.S. presidential election outcome. The major trades 0.2 percent up at 0.9762, hovering towards a high of 0.9729 hit in the previous session. Data released earlier showed Switzerland's October adjusted unemployment rate came in at 3.3 percent, while unadjusted stood at3.2 percent, in line previous reading. The short term trend is weak as long as pair struggles to close above 200 –day MA 0.9780 holds. Any violation above 0.9780 confirms further bullishness, a jump till 0.9860/0.9900 is possible. On the lower side, support stands at 0.9690 and any indicative close below targets 0.9630/0.9580
AUD/USD: The Australian dollar declined below the 0.7700 handle, extending its corrective slide after the release of sluggish Chinese trade balance data. The major fell as low as 0.7689 following the data release, but it attempted a minor recovery to trade above the 0.7700 level. However, the recovery appears to be fragile as uncertainty over U.S. presidential election outcome, weak Australian business sentiment and downbeat Chinese data triggered a fresh bout of risk-off sentiment. The Aussie trades 0.4 percent lower at 0.7702, after rising to a near 3-week high of 0.7728 earlier in the session. On the higher side, major resistance is around 0.7730 and any break above will take the pair till 0.7760/0.7800. The major support is around 0.7678 (5- day MA) and a break below will drag it till 0.7620/0.7580.
NZD/USD: The New Zealand dollar nudged down as investors worried over the divergent monetary policy outlook between the Federal Reserve and the Reserve Bank of New Zealand. The RBNZ meets on Thursday to decide on the monetary policy, where it is expected to lower its official cash rate by 25 basis points to a new record low of 1.75 percent. Moreover, weak Chinese trade data also weakened the bid tone around the major. The Kiwi trades 0.1 percent lower at 0.7333, having hit an intra-day low of 0.7317. Immediate resistance is located at 0.7350, a break above targets 0.7370. On the downside, support is seen at 0.7280, a break below could drag it near 0.7250.
Equities Recap
European shares advanced, having posted its biggest gain in two months on Monday, as world markets braced for the U.S. presidential election outcome.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.6 percent and MSCI's global index of world shares added 0.2 percent.
The pan-European STOXX 600 index increased 0.14 percent at 334.30 points, while the FTSEurofirst 300 index added 0.13 percent at 1,320.06 points.
Britain's FTSE 100 trades 0.14 percent up at 6,816.07 points, while mid-cap FTSE 250 trades flat at 17,457.42 points.
Germany's DAX declined 0.1 percent at 10,446.71 points; France's CAC 40 trades 0.1 percent higher at 4,465.25 points.
Tokyo's Nikkei lost 0.03 percent at 17,171.38 points, Australia's S&P/ASX 200 index rose 0.03 percent to 5,252.40 points and South Korea's KOSPI jumped 0.29 percent at 2,003.38 points.
Shanghai composite index rose 0.5 percent to 3,147.89 points, while CSI300 index edged up 0.4 percent at 3,371.12 points. Hong Kong’s Hang Seng added 0.5 percent at 22,909.47 points.
Commodities Recap
Crude oil prices rose, extending previous session gains as markets cautiously positioned themselves for a Hillary Clinton victory in the U.S. presidential elections. Global benchmark Brent crude was trading 1.02 percent higher at $46.57 per barrel by 0949 GMT, pulling further away from a near 3-month low of $45.06 hit on Friday. U.S. West Texas Intermediate crude rose 0.94 percent at $45.16 a barrel, having gained nearly 1.9 percent the day before.
Gold prices edged up, after falling nearly 2 percent in its previous session as investors remained uncertain about the outcome of the U.S. presidential election. Spot gold was up 0.2 percent at $1,283.70 an ounce by 0954 GMT, having hit a 6-day low of 1278.07 on Monday. U.S. gold futures were up 0.45 percent at $1,285.10 per ounce.
Treasuries Recap
The U.S. Treasuries traded mixed as investors await the outcome of the United States presidential elections of 2016. The yield on the benchmark 10-year Treasury note fell 1-1/2 basis points to 1.81 percent, the yield on long-term 30-year Treasury dipped 2-1/2 basis points to 2.57 percent and the yield on short-term 2-year note bounced 1 basis point to 0.826 percent.
The UK gilts traded modestly firmer after recent data showed that industrial production fell unexpectedly in September following the Brexit vote. The yield on the benchmark 10-year gilts fell 1 basis point to 1.20 percent, the super-long 30-year bond yield dipped 1 basis point to 1.87 percent and the yield on short-term 2-year slid ½ basis point to 0.192 percent.
The German bunds plunged as market hopes that Democratic presidential candidate Hillary Clinton will win the United States election has boosted investors risk appetite. The yield on the benchmark 10-year bond rose 1 basis point to 0.16 percent, the yield on long-term 30-year note also climbed 1 basis point to 0.76 percent and the yield on short-term 2-year bond bounced 1/2 basis point to -0.63 percent.
The Japanese government bonds traded modestly firmer following strong demand from investors at the 10-year debt auction. Also, we expect debt prices to remain volatile ahead of the United States 2016 presidential election result. The benchmark 10-year bond yield fell 1 basis point to -0.062 percent.
The New Zealand government bonds closed lower as investors bet on Hillary Clinton to claim the White House after FBI Director James Coney said that the case against U.S. Democrat presidential candidate Hillary Clinton mishandling classified emails is closed again. The yield on the benchmark 10-year bond rose 1-1/2 basis points to 2.825 percent, the yield on 5-year note ended nearly 2 basis points higher at 2.363 percent and the yield on short-term 2-year note bounced 1 basis point to 2.110 percent.
The Australian government bonds traded narrowly mixed as investors await the United States 2016 presidential election result. The yield on the benchmark 10-year Treasury note rose 1/2 basis point to 2.361 percent, the yield on 15-year note also climbed 1 basis point to 2.736 percent and the yield on short-term 2-year slid 2 basis points to 1.660 percent.
