Market Roundup
- USD/JPY +1.22%, EUR/USD -0.8%, GBP/USD -0.6%
- DXY +0.55%, DAX +04%, Brent -0.3%, iron +4.0%
- Switzerland’s Oct Producer Prices y/y vs -0.1% previous
- Swiss Sight Deposit mixed; Total up, domestic banks down
- Siemens to buy U.S based Mentor Graphics for USD4.5bln
- New Zealand faces billions of dollars of damage from quakes
- EZ Sept Industrial Production y/y vs 1.8% previous, 1.0% expected
- BoJ Gov Kuroda – Will adjust policy as needed to achieve 2% inflation target
- China Oct industrial output +0.5% m/m, +6.1% y/y, +6.2% y/y forecast
- China Oct retail sales +0.71% m/m, +10.0% y/y, +10.7% y/y forecast
- New Zealand Oct REINZ median house price index +4% m/m, +10.9% y/y
Economic Data Ahead
- (1615 ET/2145 GMT) The Statistics New Zealand will release its Retail Sales figures for the third quarter. The indicator stood at 2.3 percent, while retail sales ex-autos were at 2.6 percent in the previous quarter.
- (1830 ET/2330 GMT) The Melbourne Institute will release Australia's Westpac Leading Index for the month of October. The index edged up 0.1 percent in the previous month.
Key Events Ahead
- (0945 ET/1445 GMT) FedTrade 15-yr Fannie Mae /Freddie Mac max $775 mln
- (1145 ET/1645 GMT) FedTrade 30-yr Ginnie Mae max $1.225 bln
- (1320 ET/1820 GMT) Dallas Fed President Robert Kaplan speaks at an event sponsored by the Wichita Falls Chamber of Commerce, in Texas.
- (1700 ET/2200 GMT) Federal Reserve Bank of Richmond President Jeffrey Lacker participates in a discussion on "Our Fiscal Health: How the National Debt Could Impact the Future for America's Youth" before a George Washington Leadership Series hosted by Washington College, in Chestertown, Maryland.
- (1830 ET/2330 GMT) Federal Reserve Bank of San Francisco President John Williams participates in Pacific Business and Investment Briefing: Panel Discussion, "Leveraging Regional Strengths to Grow Chinese Trade and Investment," in San Francisco, California.
FX Beat
DXY: The dollar rallied across the board on the back of rising U.S. Treasury yields, combined with expectations of a rate hike by the Federal Reserve in December. The greenback against a basket of currencies trades 0.6 percent higher at 99.61, having touched an 11-month high of 100.04 earlier in the session. FxWirePro's Hourly Dollar Strength Index stood at 49.15 (Neutral) by 1100 GMT.
EUR/USD: The euro slumped below the 1.0800 handle, hitting fresh 11-month low, as the greenback continued to strengthen on the back of rising U.S. Treasury yields following Donald Trump's U.S. presidential election win. The major attempted a minor recovery, as the dollar against a basket of currencies ran into 100 mark resistance, however, the recovery appears fragile, amid risk-on market profile spurred by increased expectations of a December interest rate hike. The European currency trades 0.8 percent lower at 1.0760, having touched a low of 1.0728, its lowest since Jan. 6. FxWirePro's Hourly Euro Strength Index stood Neutral at -31.66 by 1100 GMT (lower than the benchmark of -75 for bearish trend). On the higher side, any break above 1.0825 (daily Kijun-Sen) targets 1.0865 (55- H EMA)/1.0940/1.1000. Any close below 1.0710 will take the pair to next level till 1.0560.
USD/JPY: The dollar gained more than 1 percent to hit a fresh 5-month low against the Japanese yen, on expectations that Donald Trump's government would encourage spending and lift inflation, which boosted U.S Treasury yields. Trump's victory in the U.S. presidential election has underpinned risk-on sentiment in the equity markets, which weakened the bid to around the safe-haven yen. The major trades 1.2 percent higher at 107.88, after rising as high as 107.95, it’s highest since Jun. 3. FxWirePro's Hourly Yen Strength Index remained Highly Bearish at -115.45 by 1100 GMT. The major resistance is around 108.92 and break above targets 110. On the lower side, major support is around 106.50 (200- day MA) and any break below targets 105.73 (5- day MA)/ 104.06.
GBP/USD: Sterling tumbled below the 1.2500 handle, as the greenback tracked U.S. bond yields higher across the board on prospects of December Fed rate hike and a rise in inflation, following Donald Trump's U.S. presidential election victory. The major rose to a 5-week high of 1.2673 last week but dropped to an intra-day low 1.2463 as the greenback rallied. Sterling trades 0.6 percent lower at 1.2515, attempting to sustain gains above the 1.2500 level. FxWirePro's Hourly Sterling Strength Index stood Highly Bullish at 186.45 by 1100 GMT. The major support stands at 1.2440 (200- HMA) and any indicative break below targets 1.23770/1.2350. On the higher side, any break above 1.2680 will take the pair to next level till 1.2750/1.28490. Against the euro, the pound trades 0.2 percent higher at 85.94 pence, within the sight of a 7-week high of 85.66 pence struck on Friday.
USD/CHF: The Swiss franc declined, extending losses for the fifth consecutive session, amid persistent demand for the greenback, underpinned by a rise in the U.S. treasury yields. The dollar trades 0.8 percent higher at 0.9957, having touched a high of 0.9973, it’s highest since Oct. 25. Data released earlier showed Switzerland’s total sight deposit rose to 519.853 billion SFR in the week ending Nov. 11, against 518.55 billion SFR a week earlier. FxWirePro's Hourly Swiss Franc Strength Index stood Neutral at - 18.66 by 1100 GMT (lower than the benchmark of -75 for bearish trend). The short-term trend is bullish as long as support 0.9770 holds and any violation below confirms minor weakness, a decline till 0.9700/0.9650 is possible. On the higher side, resistance stands at 1.000 and any indicative close above targets 1.0092.
AUD/USD: The Australian dollar hit fresh 1-month low, weighed down by rising U.S Treasury yields and mixed Chinese data. The major initially hit an intra-day high of 0.7561 on the back of an extended rally in copper prices, however, reversed gains amid broader greenback strength. The Aussie trades 0.1 percent down at 0.7527, hovering towards a low of 0.7523, its lowest since Oct. 13. FxWirePro's Hourly Aussie Strength Index stood Neutral at - 66.78 by 1100 GMT (lower than the benchmark of -75 for bearish trend). On the higher side, major resistance is around 0.7580 and any break above will take the pair till 0.7650/0.7680. The major support is around 0.7500 and break below will drag it till 0.7440/0.74000.
NZD/USD: The New Zealand dollars declined to a 1-month low below the 0.7100 handle, as soaring U.S Treasury yields led broader greenback strength. Moreover, reports of two earthquakes struck in New Zealand also kept the bid tone around the major undermined. The Kiwi trades 0.3 percent lower at 0.7090, hovering towards an early low of 0.7074, it’s lowest since Oct.13. Immediate resistance is located at 0.7150, a break above targets 0.7200. On the downside, support is seen at 0.7047, a break below could drag it near 0.7000. FxWirePro's Hourly Kiwi Strength Index stood Neutral at - 73.66 by 1100 GMT (lower than the benchmark of -75 for bearish trend).
Equities Recap
European shares rose, strengthened by gains among banks and mining sector stocks, while the U.S. dollar hit an 11-month peak on Donald Trump's presidency plans.
The pan-European STOXX 600 index increased 1.24 percent at 341.62 points, while the FTSEurofirst 300 index added 1.22 percent at 1,348.64 points.
Britain's FTSE 100 trades 1.02 percent up at 6,799.16 points, while mid-cap FTSE 250 rose 0.79 percent at 17,583.23 points.
Germany's DAX advanced 1.16 percent at 10,794.72 points; France's CAC 40 trades 1.54 percent higher at 4,557.16 points.
MSCI's broadest index of Asia-Pacific shares outside Japan ended at its lowest since mid-July.
Tokyo's Nikkei added 1.71 percent at 17,672.62 points, Australia's S&P/ASX 200 index declined 0.61 percent to 5,337.90 points and South Korea's KOSPI lost 0.51 percent at 1,974.40 points.
Shanghai composite index jumped 0.4 percent to 3,210.37 points, while CSI300 index also advanced 0.4 percent at 3,430.25 points. Hong Kong’s Hang Seng shed 1.4 percent at 22,222.22 points.
Commodities Recap
Crude oil prices edged up, but within the sight of multi-month lows, as a record rise in OPEC's output in October and increasing U.S. rig count weighed on market sentiment. Global benchmark Brent crude was trading 0.1 percent higher at $44.57 per barrel by 0916 GMT, pulling away from a low of $44.18 hit on Friday, it’s lowest since Aug. 11. U.S. West Texas Intermediate crude rose 0.3 percent at $43.21 a barrel, having hit a 2-month low of $43.03 in the previous session
Gold prices slumped, after declining as much as 1 percent to hit its lowest in more than five months earlier in the session, as the U.S. dollar firmed on expectations that the Federal Reserve would hike interest rates in December. Spot gold was down 0.3 percent at $1,222.20 an ounce by 0927 GMT, having tumbled to $1,212.55 an ounce earlier in the day, its lowest since June 3. U.S. gold futures were unchanged at $1,224.00 per ounce.
Treasuries Recap
The United States benchmark 10-year Treasury yield bounced 12 basis points to 2.237 percent for the first time in 2016. Also, 30-year Treasury yields jumped above 3 percent mark for the first time since the start of this year.
The Eurozone periphery bonds plunged following global sovereign sell-off on rising speculation Donald Trump will increase spending to boost the world’s largest economy. The French 10-year bond yields rose 8 basis points to 0.832 percent, Irish 10-year bonds yield jumped 6-1/2 basis points to 1.069 percent, Italian equivalent bounced 9 basis points to 2.132 percent, Netherlands 10-year bonds yield inched 5 basis points higher to 0.537 percent, Portuguese equivalents up 9 basis points to 3.588 percent and the Spanish 10-year bonds yield climbed 9 basis points to 1.581 percent.
The UK 10-year gilt yields hit highest since May as investors moved away from safe-haven buying amid widespread global debt sell-off. The yield on the benchmark 10-year gilts rose 10 basis points to 1.460 percent (highest since May), the super-long 30-year bond yield jumped 9 basis points to 1.862 percent and the yield on short-term 2-year bounced 4 basis points to 0.270 percent.
The German 10-year bund yields hit highest this year following heavy sell-off in the global debt market. The yield on the benchmark 10-year bond rose 4-1/2 basis points to 0.350 percent (highest in 2016), the yield on long-term 30-year note jumped 6 basis points to 1 percent and the yield on short-term 3-year bond climbed 2-1/2 basis points to -0.554 percent.
The Japanese government bonds plunged following weakness in the U.S. Treasuries. The benchmark 10-year bond yield rose more than 1 basis point to -0.01 percent (highest since September), the yield on long-term 30-year note climbed nearly 1-1/2 basis points to 0.548 percent and the yield on short-term 2-year note jumped 1-1/2 basis points to -0.230 percent.
The New Zealand 10-year bond yields closed highest since February following heavy sell-off in global Treasury market. The yield on the benchmark 10-year bond rose 1/2 basis point to 3.135 percent (highest since February), the yield on 5-year note also ended 1/2 basis point higher at 2.523 percent and the yield on short-term 2-year note bounced 1/2 basis point to 2.135 percent.
The Australian 10-year Treasury yields hit highest since April as investors moved away from safe-haven buying as the probability of a December rate hike by the Federal Reserve jumped to 84 percent. The yield on the benchmark 10-year Treasury note rose 7 basis points to 2.660 percent (highest since April), the yield on 15-year note jumped more than 8 basis points to 3.097 percent and the yield on short-term 2-year climbed 2-1/2 basis points to 1.757 percent.
