Market Roundup
- USD/JPY -0.85%, EUR/USD +0.45%, GBP/USD -0.45%
- DXY -0.1%, DAX -0.75%, Brent -0.15%, Iron +4.5%, Gold +0.6%
- EZ Nov Business Climate vs 0.55 previous, 0.57 expected
- EZ Nov Economic Sentiment Vs 106.3 previous, 107.00 expected
- EZ Nov Industrial Sentiment vs -0.6 previous, -0.5 expected
- EZ Nov Consumer Confidence Final vs -8.0 previous, -6.1 expected
- EZ Oct y/y M3 4.4% vs 5.0% Reuters poll, 5.0% previous
- Swiss sight deposit increase in latest week: Both total and domestic
- Swedish Oct Retail Sales surprise topside: +2.4% y/y vs +0.6% previous
- US crowds pick up slightly on Black Friday, online sales jump – Reuters
- BoE’s Carney wants lengthy Brexit transition for UK firms – Sunday Times
- Renzi faces pressure to stay in office as Italy referendum defeat looms
- Fears mount of multiple bank failures if Renzi loses referendum – FT
- ECB Coeure – Vital that Greece bailout succeeds, fourth not an option
- Saudi EnergyMin – Oil market would balance even without output cuts
Economic Data Ahead
- (1030 ET/1530 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of November. The index posted a decline of 1.7 percent in the previous month.
- (1830 ET/2330 GMT) Japan's Statistics Bureau is expected to report that unemployment rate remained unchanged at 3.0 percent for the month of October.
- (1830 ET/2330 GMT) Japan's overall household spending probably declined 0.6 percent in October after tumbling 2.1 percent in September.
- (1850 ET/2350 GMT) Japan's Ministry of Economy, Trade and Industry releases retail trade data for the month of October. The indicator is likely to post an annualized decline of 1.2 percent after falling 1.9 percent in the prior month.
Key Events Ahead
- (0945 ET/1445 GMT) FedTrade 30-yr F.Mae/Fr.Mac max $2.500 bln
- (1430 ET/1930 GMT) FedTrade 30-yr Ginnie Mae max $1.225 bln
- (1800 ET/2300 GMT) Bank of Canada Governor Stephen S. Poloz speech
FX Beat
DXY: The dollar extended losses versus its major competitors as the U.S. Treasury yields declined from their recent peaks. The greenback against a basket of currencies trades 0.2 percent down at 101.30, having touched an early low of 100.64, it’s lowest since Nov. 17. FxWirePro's Hourly Dollar Strength Index stood at -41.72 (Neutral) by 1100 GMT.
EUR/USD: The euro advanced, extending gains from the previous session, however, it failed to regain the 1.0700 handle as a minor-recovery in the U.S. treasury yields capped further upside. Data released earlier showed that Eurozone's M3 Money Supply rose at an annualized rate of 4.4 percent in October, however, missing expectations of 5.0 percent, while private loans stood at 1.8 percent in line with previous reading. The European currency trades 0.5 percent up at 1.0642, having touched a high of 1.0685 earlier in the session, its highest since Nov. 17. FxWirePro's Hourly Euro Strength Index stood at 61.77 (Bullish) by 1000 GMT. Any violation above 1.0660 will take the pair to next level till 1.0745/1.0820 level. On the lower side, any break below 1.0580 will drag the pair down till 1.0550/1.0518. Further weakness can be seen below 1.05180.
USD/JPY: The dollar extended losses, retreating from its highest levels since late March as U.S. Treasury yields eased from recent peaks. The selling pressure around the major intensified after renewed Italian banking concerns and tumbling oil prices triggered a fresh bout of risk-aversion, which boosted the bid tone around the safe-haven yen. However, the pair is seen making minor recovery amid prevalent risk-off market profile. The pair trades 0.7 percent lower at 112.38, drifting away from a low of 111.35 hit earlier in the session. FxWirePro's Hourly Yen Strength Index stood at -34.22 (Neutral) by 1000 GMT. The major resistance is around 114.08 (161.8% retracement of 113.53 and 112.73) and break above targets 115/115.53. On the lower side, minor support is around 110.80 (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 declined, after rising to a more than 1-week high against the dollar, as fresh buying in the EUR/GBP cross, weighed down the British currency. The bid tone around the pound also weakened as a minor recovery in the U.S. treasury yields boosted sentiments in the greenback. Sterling trades 0.3 percent down at 1.2428, retreating from an early high of 1.2531, its highest since Nov. 14. FxWirePro's Hourly Sterling Strength Index stood at -161.97 (Highly Bearish) by 1000 GMT. The immediate resistance is around 1.2530 and any violation above this level will take the pair till 1.2600/1.2675 in the short term. The short term bottom is around 1.2300 and any break below will drag it till 1.2202 (61.8% retracement of 1.19048 and 1.26738). The minor support is around 1.2375/1.2300. Against the euro, the pound trades 0.9 percent lower at 85.55 pence, hovering away from a high of 84.59 pence hit on Thursday, its highest since Sept.
USD/CHF: The Swiss franc rose to a 6-day high against the dollar, as a weaker tone around European equity markets and uncertainty over the Italian constitutional referendum drove investors towards safe-haven assets. The major trades 0.2 percent lower at 1.0110, having hit an early low of 1.0078, its lowest since Nov. 22. FxWirePro's Hourly Swiss Franc Strength Index stood at -27.21 (Neutral) by 1000 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 1.0150/1.0195 and any close above 1.03285 confirms major bullishness. On the lower side, minor support is around 1.0080 (10- day MA) and any break below will drag it till 1.00367/1.00
AUD/USD: The Australian dollar rose to a near 2-week high, as positive sentiment surrounding base metals boosted the major's recovery mode. The upbeat momentum in the pair was also supported by a board based U.S. dollar retreat, despite a risk-off market profile. The Aussie trades 0.5 percent higher at 0.7472, having touched a high of 0.7493 earlier in the session, it’s strongest since Nov. 17. FxWirePro's Hourly Aussie Strength Index stood at 129.03 (Highly Bullish) by 1000 GMT. On the higher side, minor resistance is around 0.7490 (23.6% retracement of 0.7778 and 0.73110) and any break above will take the pair till 0.7520/0.7580. The major support is around 0.7420 (21- 4H MA) and break below will drag it till 0.7380/ 0.7350. The short term weakness is only below 0.7300.
NZD/USD: The New Zealand dollar advanced, extending previous session's recovery mode, as a board based U.S. dollar retracement supported the upbeat sentiment surrounding the Kiwi. The major initially rose as high as 0.7101, however, it failed to extend gains above the 0.7100 handle amid persistent risk-off market sentiment. The pair trades 0.4 percent up at 0.7069, pulling away from a low of 0.6971 hit on Thursday, it’s lowest since Jul. 25. FxWirePro's Hourly Kiwi Strength Index was at 52.71 (Bullish) by 1100 GMT. Immediate resistance is located at 0.7115, a break above could take it near 0.7151 (21-DMA). On the downside, support is seen at 0.7032 (Session Low), a break below could drag it near 0.7000.
Equities Recap
European shares tumbled, as a drop in crude oil prices and Italian banks’ decline to their lowest level since end-September triggered a fresh bout of risk-aversion.
The pan-European STOXX 600 index decreased 0.86 percent at 339.50 points, while the FTSEurofirst 300 index shed 0.93 percent at 1,339.14 points.
Britain's FTSE 100 trades 0.75 percent down at 6,789.77 points, while mid-cap FTSE 250 lost 0.56 percent at 17,504.14 points.
Germany's DAX dropped 1.02 percent at 10,590.28 points; France's CAC 40 trades 0.97 percent lower at 4,506.26 points.
Tokyo's Nikkei declined 0.13 percent to 18,356.89 points, Australia's S&P/ASX 200 index fell 0.38 percent to 5,473.80 points and South Korea's KOSPI climbed 0.19 percent at 1,978.13 points.
Shanghai composite index gained 0.5 percent at 3,277.00 points, while CSI300 index advanced 0.4 percent at 3,535.08 points. Hong Kong’s Hang Seng added 0.5 percent at 22,830.57 points.
Commodities Recap
Crude oil prices declined, extending previous session's steep losses as markets raised concerns over the ability of major producers to agree output cuts at a meeting on Wednesday, which aims to restrict global oversupply. Global benchmark Brent crude was trading 0.7 percent down at $46.73 per barrel by 0921 GMT, having hit an early 10- day low of $46.26. U.S. West Texas Intermediate crude slumped 0.9 percent at $45.54 a barrel, after falling to a low of $45.12 earlier in the session, its lowest since Nov. 18.
Gold prices gained by over 1 percent, recovering from 9-1/2 month low struck in the previous session, as the U.S. dollar continued to decline after hitting a near 14-year high last week. Spot gold rose 0.9 percent to $1,193.16 an ounce by 0925 GMT, after advancing as high as $1,197.45 earlier in the day and putting distance between a low of $1,170.63 per ounce hit on Friday, its lowest since Feb. 8. U.S. gold futures were up 1.3 percent at $1,193.50 per ounce.
Treasuries Recap
The U.S. Treasuries pushed higher across the curve as crude oil prices tumble on output cut doubts. The yield on the benchmark 10-year Treasury note fell 6 basis points to 2.31 percent, the yield on long-term 30-year Treasury dipped 3-1/2 basis points to 2.98 percent and the yield on short-term 2-year note slid 1-1/2 basis points to 1.12 percent
The UK gilts rallied following developments in the U.S. debt market. The United States benchmark 10-year Treasury yield declined 6 basis points to 2.31 percent for the first time since the announcement of presidential election result. The yield on the benchmark 10-year gilts fell 6 basis points to 1.36 percent, the super-long 30-year bond yield dipped 4 basis points to 2.02 percent and the yield on short-term 2-year slid 3-1/2 basis points to 0.089 percent.
The German bunds gained as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year bond fell 2-1/2 basis points to 0.21 percent, the yield on long-term 30-year note dipped nearly 3 basis points to 0.86 percent and the yield on short-term 2-year bond slid 1/2 basis point to -0.75 percent.
The Japanese government bonds strengthened following gains in the U.S. Treasury prices. Also, we foresee that the U.S. 10-year bond yields likely to fall further as it forms three black crows candlestick pattern, predicting the reversal of the previous uptrend. The benchmark 10-year bond yield fell nearly 3 basis points to 0.011 percent, the yield on long-term 30-year note dipped more than 3 basis points to 0.576 percent and the yield on short-term 2-year note slid 2 basis points to -0.15 percent.
The New Zealand government bonds closed modestly firmer as investors moved towards safe-haven buying following gains in the global debt market. 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 rebounded as investors poured into safe-haven instruments amid losses in riskier assets including equities and crude oil. The yield on the benchmark 10-year Treasury note fell 6 basis points to 2.71 percent, the yield on 15-year note also dipped 6 basis points to 3.10 percent and the yield on short-term 2-year slid 2-1/2 basis points to 1.83 percent.
