Market Roundup
- USD/JPY +0.5%, EUR/USD -0.10%, GBP/USD +0.45%
- DXY +0.16%, DAX -0.04%, Brent -1.9%, Iron -6.3%, Gold -0.5%
- Germany Oct Import Prices -0.6% y/y vs revised -0.6% previous, -0.8% expected
- Switzerland Q3 payrolls 4.918 mln vs 4.903 mln previous
- UK Oct BoE Consumer credit GBP1.618 bln, vs revised 1.484 bln previous, 1.5 bln expected
- UK Oct Mortgage Approvals 67.518k vs revised 63.594 k previous, 65k expected
- EZ Nov Business Climate 0.42 vs revised 0.56 previous, 0.57 expected
- EZ Nov Economic Sentiment 106.5 vs revised 106.4 previous, 107.00 expected
- EZ Nov Final Consumer Confidence -6.1 vs -8.0 previous, -6.1 expected
- Sweden Q3 GDP 2.8% vs revised 3.6% previous, 3.1% expected, Riksbank estimate 2.8%
- Sky N 'have our cake and eat it' note. ' suggests no single market for the UK after Brexit'
- South Africa Zuma reportedly wins own party vote of confidence: ZAR sold hard
- Trump fiscal impact negative for U.S creditworthiness over medium-term
- Fund managers cut S&P 500 futures net long positions in latest week – CFTC
- Foreigners rush to buy into not-Abenomics narrative – Financial Times
- Israel CB Gov – Small countries bracing for protectionist turn – Nikkei
- UK consumer morale edges up but worry about finances – YouGov, CEBR.
- China CB branches said to ask banks to step up mortgage controls – Bloomberg
Economic Data Ahead
- (0800 ET/1300 GMT) Germany reports its preliminary consumer price index for the month of November. The index is expected to edge up 0.1 percent, after gaining 0.2 percent in the previous month. On an annualized basis, it is likely to rise 0.9 percent from 0.8 percent in October.
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that preliminary gross domestic product increased at a 3.0 percent annual rate in the third quarter after expanding at a 2.9 percent pace in the second quarter.
- (0830 ET/1330 GMT) The U.S. Commerce Department releases the preliminary personal consumption expenditures (PCE) price index for the third quarter. The index rose 1.4 percent in the previous quarter, while core PCE increased 1.7 percent in the same period.
- (0830 ET/1330 GMT) The Statistics Canada is likely to report that current account deficit narrowed to C$16.80 billion in the third quarter, compared with a deficit of C$19.86 billion in the previous quarter.
- (0900 ET/1400 GMT) The S&P/Case-Shiller is expected to report that U.S. home price index of 20 metropolitan areas rose at an annualized rate of 5.2 percent in September.
- (1000 ET/1500 GMT) The U.S. consumer confidence index is expected to have increased to 100.0 in November from a reading of 98.6 recorded in October.
- (1500 ET/2000 GMT) The Reserve Bank of New Zealand will release its Financial Stability Report.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
- (1645 ET/2145 GMT) The Statistics New Zealand releases seasonally adjusted building permits data for the month of October. The index posted a rise of 0.2 percent in September.
- (1850 ET/2350 GMT) Japan's preliminary Industrial Production is expected to have edged down 0.1 percent in October, after increasing 0.6 percent in September.
Key Events Ahead
- (0815 ET/1315 GMT) New York Fed President William Dudley will speak on opportunities for economic growth in San Juan, Puerto Rico
- (1145 ET/1645 GMT) FedTrade operation 30-yr F.Mae/Fr.Mac max $2.500 bln
- (1240 ET/1740 GMT) Federal Reserve Board Governor Jerome Powell speaks on the economic outlook before an Economic Club of Indiana luncheon, in Indianapolis.
FX Beat
DXY: The dollar inched higher versus its major peers after the Organization for Economic Cooperation and Development (OECD) upgraded U.S. economic growth projection for 2017 and 2018. The greenback against a basket of currencies trades 0.1 percent up at 101.32, recovering from a low of 100.64 hit on Monday, its lowest since Nov. 17. FxWirePro's Hourly Dollar Strength Index stood at -98.51 (Slightly Bearish) by 1100 GMT.
EUR/USD: The euro declined, weighed down by a bounce back in the greenback and downbeat Eurozone's economic sentiment report. The continent's economic sentiment indicator rose to 106.5 in October from a revised 106.4 in September, however, below estimates of an increase to 107.0, while business climate indicator fell to 0.42 in November from October's 0.56. Moreover, mounting worries about Italian banking system and Sunday's constitutional referendum will continue to weaken the bid tone around the major. The European currency trades 0.17 percent lower at 1.0594, having touched a high of 1.0658 on Monday, its highest since Nov. 17. FxWirePro's Hourly Euro Strength Index stood at 8.81 (Neutral) by 1000 GMT. Any violation above 1.0685 will take the pair to next level till 1.07450/ 1.0820 level. On the lower side, any break below 1.0560 will drag it down till 1.05180/ 1.04750.
USD/JPY: The dollar gained, reversing most of Monday's corrective slide as a recovery in European equities strengthened overall market sentiment. Additionally, increasing expectations of higher inflation from the fiscal policy under the Trump’s administration and prospects of December rate hike by the Federal Reserve renewed the buying interest in the major. The pair traded 0.5 percent higher at 112.48, hovering away from a low of 111.35 hit in the previous session. FxWirePro's Hourly Yen Strength Index stood at -78.68 (Slightly Bearish) by 1000 GMT. The major resistance is around 114.08 (161.8% retracement of 113.53 and 112.73) and a break above targets 115/115.53. On the lower side, minor support is around 111.19 (10- day MA) and any break below targets 110.25 (Nov 22nd low)/109.05 (38.2% retracement of 113.89 and 101.19).
GBP/USD: Sterling rose, regaining some ground against the dollar, following the release of better-than- expected consumer credit report. Britain's lending to individuals expanded at the fastest annual pace in 11 years in October, while mortgage approvals were stronger-than-expected, which indicated that consumer demand strengthened despite June's Brexit vote. Sterling trades 0.5 percent higher at 1.2483, drifting towards a high of 1.2531 hit in the previous session, its highest since Nov. 14. FxWirePro's Hourly Sterling Strength Index stood at -21.18 (Neutral) by 1100 GMT. The immediate resistance is around 1.2530 and any violation above this level will take the pair to next level till 1.2600/1.2675 in the near term. The short term bottom is around 1.23000and any break below will drag it till 1.2202 (61.8% retracement of 1.19048 and 1.26738). The minor support is around 1.2375/1.23000. Against the euro, the pound trades 0.5 percent higher at 84.99 pence, hovering away from a low of 85.67 pence hit on Monday, its lowest since Nov. 23.
USD/CHF: The Swiss franc edged down, extending previous session losses, as the greenback strengthened after the Organization for Economic Cooperation and Development (OECD) upgraded U.S. economic growth projection for 2017 and 2018. The dollar trades 0.3 percent higher at 1.0147, retreating from a low of 1.0078 hit on Monday, its lowest since Nov. 22. FxWirePro's Hourly Swiss Franc Strength Index stood at -123.10 (Highly Bearish) by 1100 GMT. The immediate resistance is at 1.02260 (88.6% retracement of 1.03284 and 0.94439) and any violation confirms minor jump till 1.0270/1.03280 in the short term. The minor resistance is around 1.0180 and any close above 1.03285 confirms major bullishness. On the lower side, minor support is around 1.0097 (10- day MA) and any break below will drag the pair to next level till 1.00367/1.000.
AUD/USD: The Australian dollar declined, as investors preferred to remain on the sidelines amid uncertainty surrounding OPEC output deal and the Italian constitutional referendum on Sunday. Moreover, renewed greenback buying interest also weakened the bid tone around the major. The Aussie trades 0.22 percent lower at 0.7464, retreating from an early high of 0.7497, its strongest since Nov. 17. FxWirePro's Hourly Aussie Strength Index stood at 117.87 (Highly Bullish) by 1100 GMT. On the higher side, minor resistance is around 0.7500 and any break above will take the pair till 0.7520/0.7580. The minor support is around 0.7450 and a break below will drag the pair till 0.7410 (61.8% retracement of 0.7365 and 0.74937) /0.73500. The short-term weakness is below 0.7300.
NZD/USD: The New Zealand dollar advanced, extending gains for the third straight day, amid weaker commodities and renewed strength in the U.S. dollar across the board. However, the upside in the major is likely to remain limited amid persisting risk-off market sentiment. The Kiwi trades 0.4 percent up at 0.7099, putting further distance between a low of 0.6971 hit last week, it’s lowest since Jul. 25. FxWirePro's Hourly Kiwi Strength Index was at 124.40 (Highly Bullish) by 1100 GMT. Immediate resistance is located at 0.7110, a break above could take it near 0.7149 (21-DMA). On the downside, support is seen at 0.7043 (5-DMA), a break below could drag it till 0.7000.
Equities Recap
European shares rose, reversing early session losses, supported by a recovery in Italian banking stocks, however, weak oil prices before OPEC producers meeting limited gains.
The pan-European STOXX 600 index increased 0.2 percent at 340.60 points, while the FTSEurofirst 300 index added 0.2 percent at 1,342.77 points.
Britain's FTSE 100 trades 0.5 percent down at 6,766.01 points, while mid-cap FTSE 250 edged up 0.1 percent at 17,536.31 points.
Germany's DAX gained 0.24 percent at 10,608.17 points; France's CAC 40 trades 0.8 percent higher at 4,546.36 points.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.27 percent after two days of gains.
Tokyo's Nikkei declined 0.27 percent to 18,307.04 points, Australia's S&P/ASX 200 index rose 0.03 percent to 5,466.30 points and South Korea's KOSPI edged up 0.01 percent at 1,978.39 points.
Shanghai composite index gained 0.2 percent at 3,282.92 points, while CSI300 index advanced 0.8 percent at 3,564.04 points. Hong Kong’s Hang Seng shed 0.4 percent at 22,737.07 points.
Commodities Recap
Crude oil prices declined on increasing concerns that leading oil exporters will fail to agree on a deal to cut production to reduce global oversupply. Global benchmark Brent crude was 0.77 percent down at $47.63 per barrel by 1000 GMT, after falling to a low of $46.31 in the previous session, its lowest since Nov. 18. U.S. West Texas Intermediate crude declined 1.1 at $46.36 a barrel, having hit a 10-day low of $45.17 the day before.
Gold prices slumped, pulling away from a 5-day high of $1197.46 an ounce hit in the previous session, as the dollar recovered from recent losses, with markets cautiously positioned ahead of an OPEC meeting this week that could see oil producers curb output. Spot gold was down 0.5 percent at $1,186.91 an ounce as of 1005 GMT, having gained 0.9 percent on Monday. U.S. gold futures were mostly unchanged at $1,191.60 per ounce.
Treasuries Recap
The U.S. Treasuries were pushed lower across the curve ahead of the preliminary third-quarter gross domestic product (GDP) data, which is expected to jump 3 percent. The yield on the benchmark 10-year Treasury note rose 1-1/2 basis points to 2.33 percent, the yield on long-term 30-year Treasury inched 1 basis point to 2.99 percent and the yield on short-term 2-year note bounced 1/2 basis point to 1.11 percent.
The UK gilts slumped as recent data showed that the country’s mortgage approvals hit 6-month high in October. The yield on the benchmark 10-year gilts rose nearly 2 basis points to 1.40 percent, the super-long 30-year bond yield climbed 1-1/2 basis points to 2.06 percent and the yield on short-term 2-year bounced 1-1/2 basis points to 0.114 percent.
The German bunds slumped as investors await the November consumer inflation data scheduled to be released today at 13:00 GMT. Also, doubts over OPEC ministerial gathering, in which oil-producing countries are expected to strike an agreement on output cut, limited the growth in bund yields. The yield on the benchmark 10-year bond rose 1 basis points to 0.20 percent, the yield on long-term 30-year note climbed 1-1/2 basis points to 0.85 percent and the yield on short-term 2-year bond bounced 1/2 basis point to -0.75 percent.
The Japanese government bonds traded nearly flat as investors await the OPEC ministerial gathering, in which oil-producing countries are expected to strike an agreement on output cut. On the other hand, 2-year bond yields fell following stronger auction demand. The benchmark 10-year bond yield hovered around 0.01 percent, the yield on long-term 30-year note remained steady at 0.57 percent and the yield on short-term 2-year note slid 2 basis points to -0.16 percent.
The New Zealand government bonds closed modestly firmer as investors remained cautious ahead of the OPEC ministerial gathering, in which oil-producing countries are expected to strike an agreement on output cut. The yield on the benchmark 10-year bond closed 1 basis point lower at 3.12 percent and the yield on short-term 2-year note fell 5-1/2 basis points to 2.12 percent.
The Australian government bonds traded narrowly mixed as investors await the OPEC ministerial gathering, in which oil-producing countries are expected to strike an agreement on output cut. The yield on the benchmark 10-year Treasury note fell nearly 1 basis point to 2.70 percent, the yield on the 15-year note climbed 1-1/2 basis points to 3.12 percent and the yield on short-term 2-year inched 1-1/2 basis points to 1.84 percent.
