Market Roundup
- USD/JPY -0.18%, EUR/USD +0.5%, GBP/USD -0.55%
- EUR/GBP lifts from 0.8603 to 0.9707
- DXY -0.16%, DAX +0.17%, Brent +2.3%, Iron -6.0%
- British Government has no overall plan for Brexit due to cabinet divisions-BBC
- UK- The government says it "does not recognize" a leaked memo
- BoE’s Carney says will leave at end of 2019
- SA’s main opposition has filed a criminal complaint against President Zuma
- Germany Flash Q3 GDP 1.5% y/y vs 3.1% previous, 1.8% expected
- Germany Nov ZEW Econ Sentiment 13.8 vs 6.2 last, 8.1 expected
- Germany ZEW Nov Current Conditions 58.8 vs 59.5 previous, 61.5 expected
- EZ Sept Trade NSA E26.5bln vs 18.4 bln previous, 22.5 bln expected
- EZ Flash Q3 GDP y/y vs 1.6% previous, 1.6% expected
- UK Oct CPI y/y +0.9% vs 1.0% previous, 1.1% expected
- UK Oct Core CPI +1.2% y/y vs 1.5% previous, 1.4% expected
- UK Oct Core Output Prices +1.9% y/y vs 1.4% previous, 1.7% expected
- CFTC IMM CTA data – Spec USD net longs at 9 ½-month high
- China PBOC to continue with net FX sales in October – Xinhua
- China FinMinistry – France to encourage Panda bonds – Reuters
- RBA- November meeting minutes – Risks broadly balanced
- RBA- inflation returning to “normal”, growth nearing potential
- IMF – Australia economy resilient, more government spending needed
Economic Data Ahead
- (0830 ET/1330 GMT) The Federal Reserve Bank of New York is expected to report that manufacturing activity in New York State declined 1.5 in November after posting a slump of 6.8 in October.
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that retail sales remained steady at 0.5 percent in October, after posting a similar rise in September. While excluding autos, retail sales are likely to have gained 0.4 percent, after rising 0.5 percent in September.
- (0830 ET/1230 GMT) The U.S. Labor Department publishes import and export prices for the month of October. The import prices are likely to have risen 0.3 percent after edging up 0.1 percent in September, while exports are expected to have gained 0.2 percent after rising 0.3 percent in the prior month.
- (1000 ET/1400 GMT) The U.S. Commerce Department is expected to report that business inventories remained unchanged at 0.2 percent in September, after a similar rise in August.
- (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.
- (1630 ET/2130 GMT) API reports its weekly crude oil stock.
- (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
- (0730 ET/1230 GMT) Federal Reserve Bank of Boston President Eric Rosengren speaks in Portland, Maine.
- (1145 ET/1645 GMT) FedTrade 30-year Fannie Mae / Freddie Mac max $2.500 bln
- (1330 ET/1830 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated Q&A before the North American Strategy for Competitiveness Conference, in Dallas, Texas.
- (1330 ET/1830 GMT) Federal Reserve Vice Chair Stanley Fischer is scheduled to convene a forum at the Brookings Institution.
- (1830 ET/2330 GMT) Federal Reserve Bank of San Francisco President John Williams participates in the Pacific Business and Investment Briefing's panel discussion on "Leveraging Regional Strengths to Grow Chinese Trade and Investment," in San Francisco, California.
FX Beat
DXY: The dollar edged lower versus the euro and the yen, but hovered within the sight of multi-month highs. The greenback against a basket of currencies trades 0.1 percent down at 99.85, having touched an 11-month high of 100.22 on Monday.
EUR/USD: The euro extended its recovery mode, halting its 6-day losing streak, on the back of upbeat economic data from the Eurozone. The economy’s preliminary gross domestic product for the third quarter came in line with estimates at 1.6 percent y/y and 0.3 percent, while ZEW Survey showed the continents’' economic sentiment strengthened to 15.8 in November, surpassing forecast of 14.3 and previous 12.3. The European currency trades 0.4 percent up at 1.0776, pulling further away from a low of 1.0709 hit in the previous session, its lowest level since December. FxWirePro's Hourly Euro Strength Index stood Neutral at -27.88 by 1100 GMT. Any slight break above 1.0850 will take the pair till 1.0950 (7- day EMA)/1.0970 (21-day MA). On the lower side, minor support 1.0750 and any indicative break below will drag the pair down till 1.0700/1.06400 (161.8% retracement of 1.07091 and 1.08163). Overall bearish invalidation is only above 1.1299.
USD/JPY: The dollar edged down after rising to a peak of 108.54 in the previous session, its strongest level since Jun. 3, amid prevalent cautious sentiment. However, increasing expectations of an eventual U.S rate-hike action at the Federal Reserve’s December meeting kept the major above the 108.00 handle. The pair trades 0.1 percent down at 108.26, having hit an intra-day low of 107.77. FxWirePro's Hourly Yen Strength Index stood at -82.48 (Bias Slightly Bearish) 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 declined below the 1.2400 handle after data showed British inflation fell unexpectedly in October. The economy's consumer prices rose 0.9 percent compared with a rise of 1.0 percent a year ago, while Core-CPI stood at 1.2 percent, missing expectations of 1.5 percent. However, producer price index - output rose by 2.1 percent, faster than expected and the biggest increase since April 2012, while PPI-input showed a record monthly rise in October, advancing by 4.6 percent. Sterling trades 0.4 percent lower at 1.2428, having slumped as low as 1.2396 earlier in the session. FxWirePro's Hourly Sterling Strength Index stood at -64.69 (Bias Neutral) by 1000 GMT. The short term trend is slightly bearish as long as resistance 1.2500 holds. The pair trades weak and a decline till 1.2300/1.2200 is possible. On the higher side, any break above 1.2500 will take the cable to next level till 1.2530/1.2600/1.2675. Against the euro, the pound trades 1.12 percent lower at 86.85 pence, having hit an intra-day low of 87.07.
USD/CHF: The Swiss franc gained, retreating from an 8-month low hit on Monday, as the greenback eased across the board. The dollar trades 0.3 percent lower at 0.9951, pulling away from a high of 1.0002 struck in the previous session, it’s highest since Mar. 10. FxWirePro's Hourly Swiss Franc Strength Index stood Neutral at 9.16 by 1000 GMT. The short-term trend is bullish as long as support 0.9860 holds. Any violation below 0.9860 confirms minor weakness, a decline till 0.9767/0.9700 is possible. On the higher side, resistance stands at 1.000 and any indicative close above targets 1.0092.
AUD/USD: The Australian dollar edged up, extending gains from the previous session, after the Reserve Bank of Australia released its latest policy meetings minutes. However, the major turned sharply lower as renewed weakness in copper prices and increasing expectations of an eventual Fed rate hike action in December added to the selling pressure. The Aussie trades 0.1 percent up at 0.7556, having hit an early high of 0.7581. FxWirePro's Hourly Aussie Strength Index stood Neutral at 4.08 by 0500 GMT. 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 0.7440/0.7400.
NZD/USD: The New Zealand dollar extended losses for the fifth consecutive session, weighed down by increasing speculation of an eventual Fed rate hike action in December. However, the major traded above the 0.7100 handle, as the U.S. dollar came under renewed selling pressure on profit taking. The Kiwi trades 0.1 percent down at 0.7109, having hit an early low of 0.7096. FxWirePro's Hourly Kiwi Strength Index was Neutral at -69.19 by 1100 GMT. Immediate resistance is located at 0.7165 (5-DMA), a break above targets 0.7200. On the downside, support is seen at 0.7070 (Previous Session Low), a break below could drag it near 0.7000.
Equities Recap
European shares advanced led higher by energy stocks as crude oil prices and bond-proxy sectors such as utilities rebounded after a marginal decline in yields.
The pan-European STOXX 600 index increased 0.13 percent at 338.68 points, while the FTSEurofirst 300 index added 0.1 percent at 1,336.47 points.
Britain's FTSE 100 trades 0.91 percent up at 6,815.52 points, while mid-cap FTSE 250 rose 1.00 percent at 17,647.36 points.
Germany's DAX advanced 0.05 percent at 10,703.53 points; France's CAC 40 trades 0.51 percent higher at 4,531.82 points.
Tokyo's Nikkei shed 0.03 percent at 17,668.15 points, Australia's S&P/ASX 200 index declined 0.33 percent to 5,328.10 points and South Korea's KOSPI lost 0.35 percent at 1,967.53 points.
Shanghai composite index edged down 0.1 percent to 3,206.99 points, while CSI300 index ended flat at 3,429.87 points. Hong Kong’s Hang Seng added 0.5 percent at 22,323.91 points.
Commodities Recap
Crude oil prices rose nearly 2 percent, retreating from multi-month lows on growing expectations that OPEC will agree to cut production later this month to reduce a supply glut. Global benchmark Brent crude was trading 1.4 percent higher at $45.34 per barrel by 0937 GMT, pulling further away from a 3-month low of $43.55 hit in the previous session. U.S. West Texas Intermediate crude rose 1.56 percent at $44.37 a barrel, having hit a low of $42.18 on Monday, its lowest since Aug. 11.
Gold prices edged higher as investors brought back the metal after it dropped to its lowest level in 5-1/2 months on Monday. Spot gold was up 0.26 percent at $1,223.96 an ounce at 0943 GMT, having declined to its weakest since June 3 at $1,211.41 an ounce in the previous session. U.S. gold futures climbed 0.2 percent to $1,224.30.
Treasuries Recap
The United States Treasuries traded narrowly mixed as markets await greater flow of data on Tuesday, highlighted by retail sales, Empire manufacturing, import prices and business inventories releases. The yield on the benchmark 10-year Treasury note fell 1/2 basis point to 2.217 percent, the yield on long-term 30-year Treasury dipped 2-1/2 basis points to 2.956 percent and the yield on short-term 2-year note rose 1/2 basis point to 0.993 percent.
The Eurozone periphery bonds strengthened following gains in the benchmark German bunds. The French 10-year bond yields fell 9 basis points to 0.730 percent, Irish 10-year bonds yield dipped 10 basis points to 0.914 percent, Italian equivalent slid 9 basis points to 2.001 percent, Netherlands 10-year bonds yield ticked 5-1/2 basis points lower to 0.460 percent, Portuguese equivalents down 10 basis points to 3.458 percent and the Spanish 10-year bonds yield tumbled 9 basis points to 1.440 percent.
The UK government gilts rallied after recent data showed that the country’s consumer inflation slowed unexpectedly in October. The yield on the benchmark 10-year gilts fell 4-1/2 basis points to 1.367 percent, the super-long 30-year bond yield dipped 5 basis points to 2.019 percent and the yield on short-term 2-year slid 1 basis point to 0.197 percent.
The German bunds gained after recent data showed that the country’s gross domestic product (GDP) growth slowed more than expected in the third quarter. The yield on the benchmark 10-year bond fell 3-1/2 basis points to 0.301 percent, the yield on long-term 30-year note dipped 4-1/2 basis points to 0.927 percent and the yield on short-term 3-year bond slid 1 basis point to -0.621 percent.
The Japanese 10-year bond yields hit the Bank of Japan’s zero percent target for the first time since September as the probability of a December rate hike by the Federal Reserve jumped to 92 percent from previous 30 percent before the presidential election. The benchmark 10-year bond yield rose more than 1 basis point to 0.00 percent, the yield on long-term 30-year note climbed 1-1/2 basis points to 0.566 percent and the yield on short-term 2-year note jumped 1-1/2 basis points to -0.199 percent.
The New Zealand government bonds closed marginally higher as the economy is still reeling from the impact of powerful earthquakes. The yield on the benchmark 10-year bond fell 1/2 basis point to 3.105 percent, the yield on 7-year note ended 2 basis points lower at 2.763 percent and the yield on short-term 5-year note slid 1/2 basis point to 2.488 percent.
The Australian government bonds traded a tad lower after the Reserve Bank of Australia in its November meeting minutes signaled no further rate cut in the coming months. The yield on the benchmark 10-year Treasury note rose 1 basis point to 2.671 percent, the yield on 15-year note jumped 3 basis points to 3.128 percent and the yield on short-term 2-year climbed 2 basis points to 1.823 percent.
