Market Roundup
• US Oct Existing home sales, 5.48 mln, 5.42 mln forecast, 5.39 mln 5.37 mln.
• US Oct Existing home sales % change, 2.0%, 0.7% forecast, 0.7% previous0.4% revised.
• US Nov 18 w/e Redbook m/m, -0.7%, -1.2% previous.
• US Nov 18 w/e Redbook y/y, 4.1%, 2.3% previous.
• CA Sept Wholesale trade m/m, -1.2%, 0.3% forecast, 0.5% prev 0.4% revised.
• NAFTA nations lock horns on U.S. auto demands as Mexico round ends.
• South Korea, Japan welcome U.S. relisting North Korea as the sponsor of terrorism.
• German political grandees press parties to compromise for stability.
• ECB's Coeure expects bond-buying pledge to be dropped by Sept.
• Bank of England rate-setters differ over chance of wage pick-up.
• Britain to detail Brexit bill when EU agrees to move talks forward.
Looking Ahead - Economic Data (GMT)
• No major economic events are scheduled
Looking Ahead - Events, Other Releases (GMT)
• 19:00 Fed FOMC will release the minutes from its Oct.31- Nov.1 policy meeting
Currency Summaries
EUR/USD is likely to find support at 1.1657 levels and currently trading at 1.1735 levels. The pair has made session high at 1.1751 and hit lows at 1.1712 levels. The euro edged higher against the U.S. dollar on Tuesday as greenback declined as investors awaited the minutes, due on Wednesday, of the Federal Reserve meeting held in November. The Fed’s meeting minutes due to be released on Wednesday will be evaluated for any new indications that a rate hike is likely in December. The U.S. central bank kept interest rates unchanged when it concluded its two-day meeting on Nov. 1 and pointed to solid U.S. economic growth and a strengthening labor market while playing down the impact of recent hurricanes. Investors are seen as reluctant to take the other side of the trade this week as volumes decline and with no major catalysts to change direction ahead of the holiday on Thursday. The euro steadied and was trading slightly higher after registering its biggest one-day fall in a month on Monday as investors looked beyond Germany's political impasse to focus on the euro zone's still-robust economy. Germany's Chancellor Angela Merkel raised the prospect on Monday of a new election after talks on forming a three-way coalition collapsed. The dollar index fell 0.14 percent, with the euro up 0.09 percent to $1.1742.
GBP/USD is supported in the range of 1.3182 levels and currently trading at 1.3231 levels. It reached session high at 1.3260 and dropped to session low at 1.3211levels. Britain's pound was little changed against the dollar on Tuesday as cautious optimism around Prime Minister Theresa May's Brexit bill kept investors from making big bets on the pound. Britain’s Brexit minister David Davis said on Tuesday that reaching a deal was the most likely outcome of talks, but added the British government was prepared for no agreement with the bloc. May met with senior members of her ministerial team on Monday amid expectations that she will offer the European Union more than she committed to during a speech in Florence in September that failed to provide a breakthrough in the stalled negotiations. Media reports said ministers had agreed to make a financial offer that would increase May's existing commitment, though there were differing accounts, which investors said was keeping a lid on any gains for the British currency. The Independent news website said May's opening offer could double to around 40 billion euros but it gave no details, while the BBC reported that no specific amounts had been discussed during the meeting. Sterling was flat at $1.3233, not far from a 2-1/2-week high of $1.3279 touched on Monday.
USD/CAD is supported at 1.2725 levels and is trading at 1.2775 levels. It has made session high at 1.2812 and lows at 1.2747 levels. The Canadian dollar firmed against its U.S. counterpart on Tuesday, with the currency recovering from an earlier three-week low as oil prices edged higher, while data showed a surprise drop in domestic wholesale trade. Prices of oil, one of Canada's major exports, rose as traders looked ahead to a meeting next week at which major crude exporters are expected to extend production cuts. U.S. crude prices were up 0.12 percent to $56.49 a barrel. Canadian wholesale trade fell by 1.2 percent in September from August, Statistics Canada said. Analysts had forecast a 0.3 percent increase. Negotiators from the United States, Mexico and Canada square off on Tuesday for the last time in a fifth round of talks to rework the North American Free Trade Agreement, with stalemate looming on a proposal to ramp up regional content for autos. Investors were also awaiting a speech by Federal Reserve Chair Janet Yellen later on Tuesday. Minutes from the Fed's November meeting will be released on Wednesday. The Canadian dollar was last trading at C$1.2775 to the greenback, up 0.2 percent. The currency's strongest level of the session was C$1.2749, while it touched its weakest since Nov. 2 at C$1.2837.
USD/JPY is supported around 111.85 levels and currently trading at 112.46 levels. It peaked to hit session high at 112.50 and made session lows at 112.15 levels. The U.S. dollar declined against the Japanese yen on Tuesday as investors awaited for minutes from the U.S. Federal Reserve's last meeting for clues on the outlook for potential rate rises. The minutes of the meeting, when it kept interest rates unchanged, will be released on Wednesday. Fed Chair Janet Yellen said on Monday she would resign her seat on the Fed's Board of Governors once Jerome Powell is confirmed and sworn in to replace her as head of the U.S. central bank. Traders were also keeping an eye on safe-haven demand for gold after U.S. President Donald Trump put North Korea back on a list of state sponsors of terrorism on Monday. The dollar index, which tracks the greenback against a basket of six major rivals, fell 0.14 percent to 93.971 but was still within sight of its overnight peak of 94.104, its highest since Nov. 14. The dollar fell 0.25 percent against the yen to 112.16 yen and 0.2 percent against the Swiss franc to 0.9916 franc, but remained within its trading range from the previous session against both currencies.
Equities Recap
European shares quickly recovered from a weaker open on Tuesday as continued faith in the underlying strength of the European economy and a synchronised global expansion overcame negative trading updates, notably in Britain.
UK's benchmark FTSE 100 closed up by 0.28 percent, the pan-European FTSEurofirst 300 ended the day up by 0.45 percent, Germany's Dax ended up by 0.82 percent, France’s CAC finished the day up by 0.47 percent.
U.S. stocks jumped and indexes hit record highs on Tuesday, led by gains in this year's top-performing technology sector.
Dow Jones closed up by 0.68 percent, S&P 500 ended up by 0.65 percent, Nasdaq finished the day up by 1.05 percent.
Treasuries Recap
The U.S. Treasury yield curve flattened to its lowest in a decade on Tuesday as investors awaited minutes from the Federal Reserve’s last meeting, with no major economic releases due this week and trading subdued before the U.S. Thanksgiving holiday.
Benchmark 10-year notes rose 2/32 in price to yield 2.36 percent, down from 2.37 percent on Monday.
The yield curve between two-year and 10-year notes flattened to a low of 57.4 basis points, the flattest level since late 2007.
Commodities Recap
Gold bounced up slightly on Tuesday, as a weaker U.S. dollar gave bullion a boost after the previous day's sharp decline and as investors awaited the minutes, due on Wednesday, of the Federal Reserve meeting held in November.
Spot gold was up 0.3 percent at $1,280.63 an ounce by 1:44 p.m. EST (1844 GMT). The metal fell about 1.4 percent on Monday, its biggest daily percentage drop since Sept. 11.
U.S. gold futures for December delivery settled up $6.40, or 0.5 percent, at $1,281.70 per ounce.
Oil edged up on Tuesday, supported by expectations of an extension next week to OPEC output cuts, but prices remained under pressure from signs of higher output in the United States.
Brent futures were up 26 cents, or 0.4 percent, at $62.48 a barrel by 11:56 a.m. EST (1656 GMT), while U.S. West Texas Intermediate (WTI) crude was up 37 cents, or 0.7 percent, at $56.79 per barrel.
