Market Roundup
- USD/JPY -0.55%, EUR/USD +0.45%, GBP/USD +0.1%
- DXY -0.22%, DAX -0.01%, Brent -1.04%, Iron +4.5%, Gold +0.50%
- UK Second release Q3 GDP +2.3% y/y vs 2.3% previous, 2.3% expected
- UK Q3 Business investment -1.6% y/y vs -0.8% previous, -2.1% expected
- UK Nov Distributive Trades +26 vs 21 previous, 12 expected
- Japan Oct core CPI -0.4% y/y, Tokyo Nov core -0.4%, both as eyed
- SNB ViceChair Zurgruegg – Low-interest rate risks manageable
- Zurgruegg NIRP playing decisive role in checking CHF strength
- Japan to end preferential tariffs for China, four others – Nikkei
- Moody's - Japan's high level of government debt remains affordable
- China yuan fall sign of new central bank tack – South China Morning Post
- SoKorea CB Jang – Won’t sit still and just watch bond market deteriorate
- Foreigners pile back into Australia property, reignite bubble fears
- Australia’s Macquarie, ANZ to pay fines over Malaysia ccy cartel
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Commerce Department is likely to report that preliminary wholesale inventories rose 0.3 percent in October after edging up 0.1 percent in September.
- (0830 ET/1330 GMT) The United States releases goods trade balance data for the month of October. The economy's goods trade deficit is expected to expand to $59.2 billion from $56.1 billion recorded in the previous month.
- (0945 ET/1445 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index remained unchanged at 54.8 for the month of November.
- (0945 ET/1445 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of November. The index posted a final reading of 54.9 in the prior month.
Key Events Ahead
- No Significant Event Scheduled
FX Beat
DXY: The dollar eased on profit taking across the board, but traded within the sight of multi-month highs. The greenback against a basket of currencies trades 0.2 percent lower at 101.47, hovering just below a near 14 year high of 102.05 hit on Thursday. FxWirePro's Hourly Dollar Strength Index stood at 31.01 (Neutral) by 1200 GMT.
EUR/USD: The euro rose, recovering from a from a near 1-year low hit on Thursday, as the greenback eased across the board. However, the euro trimmed gains after rising to an intra-day high of 1.0614, as renewed buying interest in the shorter duration treasury yields boosted the bid tone around the dollar. The European currency trades 0.35 percent up at 1.0586, having hit a low of 1.0518 on Thursday, its lowest since Dec. FxWirePro's Hourly Euro Strength Index stood at -55.05 (Neutral) by 1200 GMT. Any violation above 1.0660 will take the pair to next level till 1.07450/1.0820 level. On the lower side, any break below 1.0580 will drag it till 1.0550/1.05180. Further weakness can be seen below 1.0518.
USD/JPY: The dollar edged down after rising to a fresh 8-month high of 113.89 earlier in the session, as investors seem to have adjusted their positions ahead of next week's U.S monthly employment report and prelim GDP figures, which could influence the Fed's monetary policy outlook. The major trades 0.35 percent lower at 112.91, attempting to regain the 113.0 handle, however, it was on track to gain 2.4 percent on the week. FxWirePro's Hourly Yen Strength Index stood at -174.25 (Highly Bearish)) by 1200 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 111.70 (5- day MA) and any break below targets 111.24/110.70 (200- H MA).
GBP/USD: Sterling stood firm versus the dollar and was on track for its best run of weekly gains against the euro since early 2015, as markets shifted their focus on political risks faced in the Eurozone. Data released earlier showed Britain's economy grew 0.5 percent in the third quarter, in line with estimates, while business investment expanded more than expected, however, it had less impact on the British currency. Sterling trades 0.1 percent higher at 1.2462, having recovered from an early low of 1.2415 and was set for a 0.7 percent gain on the week. FxWirePro's Hourly Sterling Strength Index stood at 8.38 (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 1.2300 and any break below will drag it till 1.2202 (61.8% retracement of 1.19048 and 1.26738). Against the euro, the pound was trading 0.4 percent lower at 85.01 pence, hovering away from a high of 84.59 pence hit in the previous session, its highest since Sept.
USD/CHF: The Swiss franc edged up against the dollar, as the greenback against a basket of currencies eased from a near 14-year high hit earlier in the week. The major trades 0.3 percent down at 1.0128, pulling away from a 9-month high of 1.0191 struck on Thursday. The immediate resistance is at 1.0226 (88.6% retracement of 1.03284 and 0.94439) and any violation confirms minor jump till 1.0270/1.03280 in the short term. On the lower side, minor support is around 1.0120 (5- day MA) and any break below will drag the pair to next level till 1.0090/ 1.0037/ 1.000. Any close above 1.03285 confirms major bullishness.
AUD/USD: The Australian dollar extended its recovery mode above the 0.7400 handle, as upbeat sentiment surrounding base metals, boosted the bid tone around the major. However, the pair's recovery appears fragile, as growing expectations of December Fed rate-hike and 2-3 more interest rate hikes in 2017 underpinned the U.S. dollar. The Aussie trades 0.5 percent higher at 0.7440, having touched a 1-week high of 0.7467 earlier in the session. FxWirePro's Hourly Aussie Strength Index stood at 73.89 (Bullish) by 1100 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 0.73000 and break below will drag it till 0.7280/0.72500.
NZD/USD: The New Zealand dollar rebounded from a 4-month low, snapping its three-day losing streak as prevalent risk-on market profile boosted the sentiments of the Kiwi bulls. Moreover, upbeat New Zealand's trade figures and rising commodities prices extended support to the major. The pair trades 0.6 percent up at 0.7042, pulling away from a low of 0.6971, it’s lowest since late July. FxWirePro's Hourly Kiwi Strength Index was at 67.20 (Bullish) by 1100 GMT. Immediate resistance is located at 0.7085 (Nov-22 High), a break above could take it near 0.7150. On the downside, support is seen at 0.6971 (Previous Session Low), a break below could drag it near 0.6900.
Equities Recap
European shares edged higher and were on track for a third consecutive week of gains, as earnings in healthcare index counterbalanced losses in energy and banking stocks.
The MSCI world equity index was up 0.2 percent in early trading and was set to end the week around 1 percent higher, while MSCI's broadest index of Asia-Pacific shares outside Japan added 0.7 percent.
The pan-European STOXX 600 index increased 0.06 percent at 342.06 points, while the FTSEurofirst 300 index added 0.15 percent at 1,349.81 points.
Britain's FTSE 100 trades 0.02 percent up at 6,830.60 points, while mid-cap FTSE 250 lost 0.23 percent at 17,550.09 points.
Germany's DAX gained 0.02 percent at 10,690.87 points; France's CAC 40 trades 0.06 percent higher at 4,545.47 points.
Tokyo's Nikkei rose 0.2 percent to 18,381.22 points, Australia's S&P/ASX 200 index rose 0.38 percent to 5,505.70 points and South Korea's KOSPI climbed 0.16 percent at 1,974.46 points.
Shanghai composite index gained 0.6 percent at 3,261.94 points, while CSI300 index advanced 0.9 percent at 3,521.30 points. Hong Kong’s Hang Seng added 0.5 percent at 22,723.45 points.
Commodities Recap
Crude oil prices declined by more than 1 percent, weighed down by a stronger dollar, coupled with rising Saudi supplies to Asian clients and a drop in Chinese imports. International benchmark Brent crude was trading 0.6 percent lower at $48.57 per barrel by 0927 GMT, having hit an intra-day low of $48.18. U.S. West Texas Intermediate crude fell 0.7 percent at $47.64 a barrel, after dropping to a low of $47.19 earlier in the session.
Gold prices edged up, after falling by 1 percent to its lowest in 9-1/2 months earlier in the session, but was on track for a third straight weekly decline, as increasing expectations of an imminent Federal Reserve rate hike strengthened the dollar. Spot gold was up 0.2 percent at $1,185.06 an ounce by 0944 GMT, having earlier dropped its lowest level since Feb. 8 at $1,170.67 per ounce. U.S. gold futures fell about 1 percent to $1,177.9 per ounce, after slipping earlier to its lowest since Feb. 5 at $1,170.30 per ounce.
Treasuries Recap
The U.S. Treasuries were pushed lower across the curve as heavy sell-off continued. The yield on the benchmark 10-year Treasury note rose 1-1/2 basis points to 2.37 percent and the yield on short-term 2-year note jumped 2-1/2 basis points to 1.15 percent.
The UK gilts continued to trade firmer as the country’s gross domestic product (GDP) data remained unchanged in the third quarter, failing to provide any direction. Also, weak crude oil prices drove investors toward safe-haven buying. The yield on the benchmark 10-year gilts fell 1-1/2 basis points to 1.42 percent, the super-long 30-year bond yield dipped 1 basis point to 2.06 percent and the yield on short-term 2-year slid 1 basis point to 0.13 percent.
The German bunds strengthened following weakness in crude oil prices. Also, subdued economic growth in the third quarter supported the cause. The yield on the benchmark 10-year bond fell 1-1/2 basis points to 0.25 percent, the yield on long-term 30-year note dipped 1 basis point to 0.90 percent and the yield on short-term 2-year bond slid 1 basis point to -0.74 percent.
The Japanese 10-year bond yields hit highest in 9 months following a heavy sell-off in U.S. Treasuries. The benchmark 10-year bond yield rose 2 basis points to 0.048 percent, the yield on long-term 30-year note also climbed 2 basis points to 0.66 percent and the yield on short-term 2-year note inched 2 basis points to -0.16 percent.
The New Zealand government bonds closed modestly firmer Friday, succumbing to thin trading activity during a relatively quiet session that witnessed data of little significance. The yield on the benchmark 10-year bond closed 1/2 basis point lower at 3.210 percent and the yield on short-term 2-year note fell 1 basis point to 2.17 percent.
The Australian government bonds traded nearly flat 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 yield on the benchmark 10-year Treasury note hovered around 2.77 percent, the yield on 15-year note remained steady at 3.16 percent and the yield on short-term 2-year stood flat at 1.86 percent.
