Market Roundup
- USD/JPY +1.27%, USD/CHF +0.85%, EUR/USD -0.65%
- DXY +0.28%, DAX +1.5%, Brent +1.25%, Iron +3.28%
- Germany September Ind. Orders -0.6% m/m vs revised 0.9% previous, 0.3% expected
- Switzerland Oct CPI -0.2% y/y vs -0.2% previous, -0.2% expected
- UK Oct Halifax House prices +5.2% 3mth/y/y vs 5.8% previous, 4.8% expected
- EZ Nov Sentix index 13.1 vs 8.5 previous, 9.0 expected
- EZ Sept Retail Sales 1.1% y/y vs revised 1.2% previous, 1.3% expected
- NBC-WSJ poll has Clinton leading Trump by four points, 44% vs 40%
- Jump in Florida, Nev early voting could reap Latino gains for Clinton
- CFTC IMM CTA data - Specs up USD bets in latest week, highest since Jan
- BoJ Sept 20-21 minutes – Most see delay in meeting inflation target
- Japan MoF Asakawa – Eyes impact of US polls, to take steps if needed
- FOMC ViceChair Fischer– Labor market strong, Fed could overshoot goals
- ECB VP Constancio - Eurozone inflation could rise to 1.3% by March
Economic Data Ahead
- (1000 ET/1500 GMT) The Fed releases its labor market conditions index (LMCI) for the month of October. The index posted a decline of 2.2 in the prior month.
- N/A The Federal Reserve releases its Loan Officer Survey.
- (1500 ET/2000 GMT) The U.S. Federal Reserve is likely to report that consumer credit declined to $18.0 billion in September from $25.87 billion the month before.
- N/A China releases Foreign Exchange Reserves report for the month of October.
- (1850 ET/2350 GMT) Japan releases Foreign Exchange Reserves report for the month of October.
- (1901 ET/0001 GMT) The British Retail Consortium (BRC) will report its Like-for-Like Retail Sales for the month of September. The index rose at an annualized rate of 0.4 percent in August.
Key Events Ahead
- (1145 ET/1645 GMT) FedTrade ops 30-Yr Ginnie Mae max $1.275 bln
FX Beat
DXY: The dollar gained versus its major peers as markets see Democratic candidate Hillary Clinton winning the U.S. presidential elections on Wednesday. The greenback against a basket of currencies rose 0.7 percent to 97.59, having touched a 5-day high of 97.77 earlier in the session.
EUR/USD: The euro tumbled below the 1.1100 handle, as the greenback boosted across the board following FBI news over Democratic candidate Hillary Clinton's case. The major failed to benefit from better-than-expected Eurozone's Sentix investor’s confidence index, which rose to 13.1 in November, surpassing estimates of 9.3, as markets continued to support the dollar. The European currency trades 0.7 percent lower at 1.1062, retreating from a 4-week high of 1.1141 hit on Friday. The pair has declined slightly below daily Kijun-Sen and recovered sharply from that level. Any further weakness can be seen below if it closes daily Kijun-Sen level. On the higher side, any break above 1.1178 (200- day MA) targets 1.1200 (Trendline joining 1.1630 and 1.13663). Any close above 1.1200 will take the pair to next level till 1.1300/1.13663.
USD/JPY: The dollar rose by more than 1 percent as FBI clearance strengthened chances of a Clinton win at Wednesday’s U.S. presidential elections. The U.S. elections-related news flows continued to influence market sentiment, triggering a fresh bout of risk on wave. Investors will continue to track developments surrounding the U.S. elections ahead of the U.S. labor market conditions index (LMCI) due later in the day. The major trades 1.25 percent higher at 104.38, pulling further away from a low of 102.55 hit last week. The major resistance is around 104.65 and break above targets 105/105.50. On the lower side, major support is around 102.15 (38.2% retracement of 100.08 and 105.53) and any break below targets 101/100.
GBP/USD: Sterling declined by over 1 percent as the dollar rebounded on news that FBI cleared criminal charges warranted against Hillary Clinton for using a private email server, strengthening her chances at the U.S. presidential vote. The major reversed its best weekly gains since 2009 against the dollar, recorded in the previous session on eased concerns that Britain would undergo a "hard" Brexit and lose its access to the single market. Sterling trades 0.7 percent lower at 1.2419, having hit a low of 1.2381 earlier in the day. The major support of cable stands at 1.2350 and any indicative break below targets 1.2265 (21- day MA). On the higher side, any break above 1.2560 will take the pair to next level till 1.2600/1.2680 (55- day EMA). Against the euro, the pound trades 0.1 percent down at 89.10 pence, after rising 1.5 percent the week before.
USD/CHF: The Swiss franc tumbled as the greenback rose across the board after FBI's review triggering risk-on market sentiment. The dollar trades 0.9 percent higher at 0.9771, having hit an intra-day high of 0.9789. Data released earlier in the day showed Switzerland's consumer price index declined at an annualized rate of 0.2 percent, in line with forecast and previous reading. The short term trend is weak as long as pair struggles to close above 200 –day MA 0.9780 holds. Any violation above 0.9780 confirms further bullishness, a jump till 0.9860/0.9900 is possible. On the lower side, support stands at 0.9690 and any indicative close below targets 0.9630/0.9580.
AUD/USD: The Australian dollar edged up as FBI Clinton’s clearances-led risk-on market sentiment boosted the bid tone around the major. However, the gained were capped as investors remained uncertain over Wednesday’s US presidential elections’ outcome as both presidential candidates are almost tied for the U.S. presidential elections victory. The Aussie trades 0.1 percent up at 0.7680, having touched an early high of 0.7691. On the higher side, major resistance is around 0.7710 and any break above will take the pair till 0.7730/0.7760. The major support is around 0.7650 (5- day MA) and a break below will drag it till 0.7620/0.7580.
NZD/USD: The New Zealand dollar slumped as the greenback rallied across the board following the FBI news. Markets anxiously await U.S. presidential election and Reserve Bank of New Zealand monetary policy decision, scheduled on Wednesday and Thursday, respectively. The major gained 2.3 percent last week on a slew of upbeat economic data that strengthened expectations that the RBNZ's easing cycle might come to an end after this week. The Kiwi trades 0.1 percent lower at 0.73013, having hit a 1-1/2-month high of 0.7347 earlier in the session. Immediate resistance is located at 0.7350, a break above targets 0.7370. On the downside, support is seen at 0.7288 (5-DMA), a break below could drag it near 0.7250.
Equities Recap
European shares posted their biggest gains in weeks after the FBI stated that no criminal charges were warranted against Democrat Hillary Clinton just two days before the U.S. presidential election.
The pan-European STOXX 600 index increased 1.2 percent at 332.75 points, while the FTSEurofirst 300 index added 1.29 percent at 1,313.07 points.
Britain's FTSE 100 trades 1.38 percent up at 6,785.66 points, while mid-cap FTSE 250 rose 0.76 percent to 17,402.39 points.
Germany's DAX soared 1.67 percent at 10,429.97 points; France's CAC 40 trades 1.82 percent higher at 4,456.63 points.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.9 percent, its biggest rise in three weeks.
Tokyo's Nikkei advanced 1.61 percent at 17,177.21 points, Australia's S&P/ASX 200 index gained 1.31 percent to 5,248.70 points and South Korea's KOSPI jumped 0.79 percent at 1,997.58 points.
Shanghai composite index rose 0.3 percent to 3,133.33 points, while CSI300 index edged up 0.1 percent at 3,356.59 points. Hong Kong’s Hang Seng added 0.7 percent at 22,801.40 points.
Commodities Recap
Crude oil prices advanced by over 1 percent, strengthened by a statement from the OPEC producers' that it was committed to execute a deal agreed upon in September in order to balance the market from the increasing glut. Global benchmark Brent crude was trading 1.27 percent higher at $46.13 per barrel by 0957 GMT, having hit a high of $46.36 earlier in the session. U.S. West Texas Intermediate crude gained 1.5 percent at $44.74 a barrel, having hit a 6-week low of $43.55 on Friday.
Gold prices declined, as the dollar and global equities rallied after FBI cleared criminal charges warranted against presidential candidate Clinton for using a private email server for government work. Spot gold was down 1.47 percent at $1,285.02 an ounce by 1004 GMT, having hit a low of $1,283.62 earlier in the session. U.S. gold futures fell 1.16 percent to $1,289.40 per ounce.
Treasuries Recap
The U.S. Treasuries were pushed lower across the curve as investors moved away from safe-haven buying after Democrat Hillary Clinton holds a four-point lead over Republican Donald Trump in the final national NBC News/Wall Street Journal poll of the 2016 presidential race. The yield on the benchmark 10-year Treasury note rose 5 basis points to 1.83 percent, the yield on long-term 30-year Treasury climbed 3 basis point to 2.60 percent and the yield on short-term 2-year note bounced 5 basis points to 0.842 percent.
The UK gilts slumped following weakness in the United States Treasury prices. Treasury yields rose after FBI Director James Coney said that the case against U.S. Democrat presidential candidate Hillary Clinton mishandling classified emails is closed again. The yield on the benchmark 10-year gilts rose 3 basis points to 1.817 percent, the super-long 30-year bond yield climbed 2-1/2 basis points to 2.593 percent and the yield on short-term 2-year bounced nearly 3 basis points to 0.826 percent.
The German bunds plunged as market hopes that Democratic presidential candidate Hillary Clinton will win the United States election has boosted investors risk appetite. The yield on the benchmark 10-year bond rose 3 basis points to 0.16 percent, the yield on long-term 30-year note also climbed 2 basis points to 0.753 percent and the yield on short-term 2-year bond bounced 1/2 basis point to -0.633 percent.
The Japanese government bonds slumped as market rejoiced the decision taken by the Federal Bureau of Investigation (FBI) to close the case against U.S. Democrat presidential candidate Hillary Clinton over mishandling classified emails. The benchmark 10-year bond yield rose 1 basis point to -0.054 percent, the yield on long-term 30-year Treasury also climbed 1 basis point to 0.50 percent and the yield on short-term 2-year ½ basis point to -0.25 percent.
The New Zealand government bonds closed modestly higher on rising speculation that the Reserve Bank of New Zealand will lower its official cash rate by 25 basis points to a new record low of 1.75 percent in its Thursday’s monetary policy meeting. The yield on the benchmark 10-year bond fell 1 basis point to 2.800 percent, the yield on 5-year note ended nearly 1 basis point lower at 2.338 percent and the yield on short-term 2-year note slid 1 basis point to 2.100 percent.
The Australian government bonds slumped after FBI Director James Coney said that the case against U.S. Democrat presidential candidate Hillary Clinton mishandling classified emails is closed again. The yield on the benchmark 10-year Treasury note rose 2 basis points to 2.377 percent (high intraday), the yield on 15-year note also climbed 2 basis points to 2.747 percent and the yield on short-term 2-year bounced 3 basis points to 1.681 percent.
