Market Roundup
- USD/JPY -0.07%, EUR/USD +0.3%, GBP/USD -0.1%
- DXY -0.3%, DAX +0.3%, Brent +1.7%, Iron -1.6%, Gold +0.47%
- Swiss Sight deposits largest rise since Jun 24 Brexit latest week
- BoJ’s Masai – Concern over global uncertainties, market shocks
- APEC host says too soon to write off TPP after Trump victory
- APEC leaders vow to fight protectionism, look to China on trade
- APEC China delegation - More countries interested in joining RCEP trade deal
- China pledges further opening as leaders scramble for free trade
- France’s Fillon wins top spot in conservative primary, Sarkozy out
- Putin – Ready to freeze oil o/p, high probability OPEC deal but not 100%
- UK PM–New role for business in fairer UK: Wants to cut corporate tax
- UK May will unveil industrial strategy to spur ambitious ideas
- UK ChancExch Hammond – Budget options constrained by high debt
- Merkel to seek fourth term as Germany’s leader
- Malaysia CB will no longer tolerate MYR NDF trades
Economic Data Ahead
- (0830 ET/1330 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of October. The index stood at -0.14 in the prior month.
- (0830 ET/1330 GMT) Statistics Canada will release its wholesale trade report for the month of September. The indicator rose 0.8 percent in August.
- (0900 ET/1400 GMT) The Conference Board releases China's Leading Economic Index for the month of October. The index stood at 1.1 percent in the previous month.
- (1030 ET/1530 GMT) The Conference Board releases Australia's Leading Indicator for the month of September. The indicator remained unchanged in the month before.
- (1145 ET/1645 GMT) FedTrade 15-year Fannie Mae/Freddie Mac max $775 mln
- (1845 ET/2245 GMT) The Statistics New Zealand will release visitor arrivals report for the month of October. The indicator posted an annualized gain of 13.0 percent in the prior month.
Key Events Ahead
- (0800 ET/1300 GMT) Federal Reserve Vice Chair Stanley Fischer participates in a discussion on monetary policy, inflation rates, growth, and the Federal Reserve's long-term outlook on the U.S. economy before the Council on Foreign Relations, in New York.
- (1100 ET/1600 GMT) European Central Bank President Mario Draghi's Speech
FX Beat
DXY: The dollar eased versus its major peers, but traded within the sight of multi-month highs, as investors expect the Federal Reserve to hike rate next month. The greenback against a basket of currencies trades 0.2 percent lower at 100.98, after hitting a 13-1/2 -year high of 101.48 in the previous session. FxWirePro's Hourly Dollar Strength Index stood at 142.38 (Bias Highly Bullish) by 1000 GMT.
EUR/USD: The euro attempted a minor recovery after declining to an 11-month low in the previous session on the back of increasing political uncertainty in Europe and Trump led-dollar strength. However, the recovery mode appears to be fragile as expectations of a Fed interest rate hike next month and prospects of higher inflation in the U.S. economy supported the greenback. The European currency trades 0.5 percent up at 1.0637, retreating from a low of 1.0569 hit in the previous session, its lowest since Dec. 3. FxWirePro's Hourly Euro Strength Index stood at 50.33 (Bias Bullish) by 0900 GMT. Investors now await speeches by ECB’s President Draghi and board members B. Coeure and D. Nouy due later in the day. The pair faces strong trend line resistance at 1.0680 and any violation above will target 1.0750/1.0820. On the lower side, any break below 1.0580 will drag it till 1.0540 (161.8% retracement of 1.058 and 1.0649)/1.0500 in the short term.
USD/JPY: The dollar rose to a near-6 month high earlier in the session, on growing expectations that President-elect Donald Trump's administration would adopt expansionary fiscal policies that would strengthen growth and push interest rates higher. However, the major edged down to an intra-day low of 110.54, as a Trump-fuelled rally paused. The pair trades 0.1 percent lower at 110.75, but within the sight of a high of 111.18, its highest since May 31. FxWirePro's Hourly Yen Strength Index stood at -88.47 (Bias Slightly Bearish) by 1000 GMT. The major resistance is around 111.63 (161.8% retracement of 110.92 and 109.80) and a break above targets 112/112.60. On the lower side, minor support is around 109.51 (5- day MA) and any break below targets 108/107.65 (10- day MA).
GBP/USD: Sterling extended losses for the sixth straight day, as markets cautiously awaited the British government's autumn budget statement due on Wednesday. On Friday, the major fell towards the 1.2300 handle to hit a 2-week low, as weaker growth expectations and turbulence around talks on Britain leaving the European Union, weighed on market sentiment. Sterling trades 0.1 percent lower at 1.2334, drifting closer to a low of 1.2302 touched in the previous session, its lowest since Nov. 3. FxWirePro's Hourly Sterling Strength Index stood at -21.67 (Bias Neutral) by 1000 GMT. The short term trend is slightly bearish as long as resistance 1.2450 holds and should break below 1.2300 for further decline till 1.2200/1.2140 is possible. On the higher side, any break above 1.2450 will take the cable to next level till 1.2500/1.2530. Against the euro, the pound trades 0.5 percent down at 86.18 pence, having hit a 6-day low of 86.38 pence earlier in the session.
USD/CHF: The Swiss franc declined, extending losses for the tenth consecutive session, as the greenback strengthened on the back of rising Treasury yields and on the prospects of a December rate hike in the United States. The dollar traded 0.1 percent higher at 1.0110, after rising as high as 1.0122 on Friday, its strongest level since Feb. 3. FxWirePro's Hourly Swiss Franc Strength Index stood at -13.06 (Bias Neutral) by 1000 GMT. The short-term trend is bullish as long as support 1.0037 (5- day MA) holds and any violation below confirms minor weakness, a decline till 1.000/0.9950 is possible. On the higher side, resistance stands at 1.0125 and any indicative close above targets 1.0180/1.0220
AUD/USD: The Australian dollar retreated after declining to a near 5-month low earlier in the session, as the major found some buying interest amid rallying commodity prices. However, the recovery mode appears to be fragile, as growing expectations of aggressive fiscal stimulus by President-elect- Donald Trump administration and increasing prospects for a December Fed rate-hike action continued to underpin the greenback. The Aussie trades 0.3 percent higher at 0.7351, pulling away from an early low of 0.7311, it’s weakest since Jun. 24. FxWirePro's Hourly Aussie Strength Index stood at - 100.24 (Bias Highly Bearish) by 1000 GMT. On the higher side, minor resistance is around 0.7420 (23.6% retracement of 0.77783 and 0.7310) and any break above will take the pair till 0.7480/0.7520. The major support is around 0.7300 and break below will drag the pair till 0.7280/0.72500.
NZD/USD: The New Zealand dollar regained momentum, snapping its 8-day losing streak, as rising commodity prices boosted the bid-tone around the major. However, the recovery might be limited as growing expectations of a December Fed rate-hike and rising Treasury yields continue to weigh on the Kiwi. The pair trades 0.2 percent up at 0.7020, attempting to extend gains above the 0.7000 handle. FxWirePro's Hourly Kiwi Strength Index was at -79.00 (Bias Slightly Bearish) by 1000 GMT. Immediate resistance is located at 0.7045 (5-DMA), a break above targets 0.7070/ 0.7100. On the downside, support is seen at 0.6985 (Session Low), a break below could drag it near 0.6956.
Equities Recap
European shares declined, weighed down by health care and financial stocks, while the dollar edged lower against major peer as a Trump fuelled rally paused.
The pan-European STOXX 600 index decreased 0.5 percent at 337.68 points, while the FTSEurofirst 300 index shed 0.40 percent at 1,332.85 points.
Britain's FTSE 100 trades 0.2 percent down at 6,763.17 points, while mid-cap FTSE 250 lost 0.9 percent at 17,501.47 points.
Germany's DAX tumbled 0.17 percent at 10,645.70 points; France's CAC 40 trades 0.1 percent lower at 4,500.60 points.
MSCI's broadest dollar-based index of Asia-Pacific shares outside Japan fell 0.1 percent.
Tokyo's Nikkei rose 0.77 percent to 18,106.02 points, Australia's S&P/ASX 200 index nudged up 0.04 percent to 5,357.50 points and South Korea's KOSPI declined 0.43 percent at 1,966.05 points.
Shanghai composite index jumped 0.8 percent to 3,218.15 points, while CSI300 index added 0.7 percent at 3,441.11 points. Hong Kong’s Hang Seng edged up 0.1 percent at 22,357.78 points.
Commodities Recap
Crude oil prices advanced by more than 1 percent boosted, supported by OPEC's advancing plans to cut production to rein oversupply that weighed on prices for over two years. Global benchmark Brent crude was trading 1.5 percent higher at $47.49 per barrel by 0909 GMT, having touched a fresh high of $47.68, its highest since Nov. 2. U.S. West Texas Intermediate crude rose 3.12 percent at $46.96 a barrel, hitting a 3-week high of $47.17 earlier in the day.
Gold prices rose, reversing most of its previous session losses, buoyed by physical buying after falling to a 5-1/2-month low on Friday. Spot gold was up 0.72 percent at $1,216.10 an ounce by 0913 GMT, having declined as much as 1 percent to record its lowest since May 30 at $1,202.81 in the previous session. U.S. gold futures were up 0.4 percent at $1,213.30 per ounce.
Treasuries Recap
The U.S. Treasuries saw mixed performance during a relatively quiet session light on significant economic data, largely highlighted by Conference Board leading indicators data that came in around market expectations at +0.1 percent m/m. The yield on the benchmark 10-year Treasury note fell 1-1/2 basis points to 2.32 percent, the yield on long-term 30-year Treasury dipped 1-1/2 basis points to 3 percent and the yield on short-term 2-year note bounced 1/2 basis point to 1.064 percent.
The UK gilts traded nearly flat as markets receive no more important data of great significance today. The yield on the benchmark 10-year gilts hovered around 1.45 percent mark, the super-long 40-year bond yield remained steady at 1.86 percent and the yield on short-term 3-year stood flat 0.20 percent.
The German bunds traded nearly flat as investors remain sidelined in any big deal ahead of European Central Bank President Mario Draghi speech. The yield on the benchmark 10-year bond hovered around 0.27 percent, the yield on long-term 30-year note rose 2 basis points to 0.932 percent and the yield on short-term 3-year bond remained steady at -0.66 percent.
The Japanese government bonds traded mixed as markets were mostly quiet with little in the way of market-moving news, and with no important data scheduled for release in Asia today. The benchmark 10-year bond yield fell 1 basis point to 0.031 percent, the yield on long-term 30-year note climbed 3-1/2 basis points to 0.633 percent and the yield on short-term 2-year note dipped 1 basis point to -0.176 percent.
The New Zealand government bonds closed a tad higher Monday, succumbing to thin trading activity during a relatively quiet session that witnessed data of little significance. The yield on the benchmark 10-year bond fell ½ basis point to 3.105 percent, the yield on 7-year note also ended 1/2 basis point lower to 2.758 percent and the yield on short-term 2-year note slid 2 basis points to 2.115 percent.
The Australian government bonds gained as investors covered last week’s short positions. The yield on the benchmark 10-year Treasury note fell 2-1/2 basis points to 2.70 percent, the yield on 15-year note dipped 3 basis points to 3.11 percent and the yield on short-term 2-year slid 1 basis point to 1.82 percent.
