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America's Roundup: Dollar dips on Fed official rate talk, US stocks ends mixed, Gold jumps, Oil edges up in volatile session but headed for weekly loss-November 17th,2018

Market Roundup

• Trump says China wants trade deal, U.S. may not impose more tariffs.

• Fed's Evans says 'reasonable' to raise rates to 3.25 pct.

• Fed's Clarida says being at neutral 'makes sense'-CNBC.

• UK PM May defends Brexit deal as opponents plot no-confidence vote.

• EU states offer Britain "ambitious" ties after Brexit, but no frictionless trade.

• US Oct Industrial Production MM, 0.1%, 0.2% forecast, 0.3% previous, 0.2% revised.

• US Oct Capacity Utilization SA, 78.4%, 78.2% forecast, 78.1% previous, 78.5% revised.

• US Oct Manufacturing Output MM, 0.3%, 0.2% forecast, 0.2% previous, 0.3% revised.

• CA Sep Manufacturing Sales MM, 0.2%, 0.3% forecast, -0.4% previous, -0.5% revised.

• ECB can change rate path if inflation slows: Draghi.

• Oil and Bitcoin highlight growing risk of market crash - BAML

Looking Ahead - Economic Data (GMT)

• Nov 18 21:45 New Zealand Q3 PPI - Inputs QQ, 1.0% previous.

• Nov 18 21:45 New Zealand Q3 PPI - Outputs QQ, 0.9% previous.

• Nov 18 23:50 Japan Oct Exports YY, -1.2% previous -1.3% revised.

• Nov 18 23:50 Japan Oct Imports YY, 7.0% previous.

• Nov 18 23:50 Japan Oct Trade Balance Total (Yen), 139.6 bln previous, 131.6 bln revised.

Looking Ahead - Events, Other Releases (GMT)

• Nov 19 03:30 BoJ's Haruhiko Kuroda and Bank of France Governor Villeroy de Galhau speak at Europlace International Financial Forum - Tokyo

• Nov 19 08:00 Riksbank executive board meeting – Stockholm 

• Nov 19 09:00 BoE's James Proudman speaks on 'Cyborg Supervision - The Application of Advanced Analytics in Prudential Supervision' - London 

• Nov 19 10:30 Riksbank's Kerstin af Jochnick participates in panel discussion on Sweden’s experiences of application of macroprudential policy - Copenhagen

• Nov 19 12:00 BoE's Alex Brazier speaks at Danmarks Nationalbank Macroprudential Policy Conference - Copenhagen 

• Nov 19 13:30 Europe's Economic Commissioner Pierre Moscovici holds news conference at EU Commission's headquarters - Rome

• Nov 19 14:00 Norway Central Bank's Jon Nicolaisen speaks at conference hosted by Federation of Norwegian Industries – Oslo

• Nov 19 15:45 Fed New York's John Williams participates in discussion with NYC Hispanic Chamber of Commerce - Bronx, New York 

• Nov 19 17:00 BoC hosts media event to launch the new $10 bank note at Canadian Museum for Human Rights - Winnipeg, Canada 

• Nov 19 N/A European Union Foreign Affairs Council Meeting – Brussels

Currency Summaries

EUR/USD is likely to find support at 1.1306 levels and currently trading at 1.1409 levels. The pair has made session high at 1.1420 and hit lows at 1.1320 levels. The euro rose higher against US dollar on Friday as cautious comments from two U.S. Federal Reserve officials about global economic growth weighed on greenback. The greenback declined following comments from Fed Vice Chair Richard Clarida, who told CNBC television he saw some evidence that global growth was cooling. Traders perceived his comments to mean the No. 2 Fed official may be open for the Fed to pause its rate-hike campaign sooner than previously thought. Separately, Dallas Federal Reserve President Robert Kaplan said on Fox Business that global growth will be a bit of a headwind, which may spread to the United States. Clarida and Kaplan's remarks spurred selling in the dollar, which fell 0.7 percent against the euro at $1.141. Chicago Fed President Charles Evans acknowledged some economic risks ahead but he also raised the probability the Fed could raise rates above what would be neutral if U.S. data come in stronger than forecast.

GBP/USD is supported in the range of 1.2721 levels and currently trading at 1.2828 levels. It reached session high at 1.2877 and dropped to session low at 1.2776 levels. Sterling recovered some ground against the dollar on Friday after a leading eurosceptic minister pledged support for Britain's embattled premier Theresa May, who struck a defiant tone despite strong opposition to her Brexit deal. News that Environment Secretary Michael Gove would stay in the cabinet outweighed a growing plot to force May out of her job through a no-confidence vote. News that Environment Secretary Michael Gove would stay in the cabinet outweighed a growing plot to force May out of her job through a no-confidence vote. Sterling suffered its largest one-day drop in two years versus the euro and the dollar on Thursday after a wave of ministers opposed to May's Brexit deal with Brussels resigned. The resignations and May's precarious position left investors panicking that Britain could exit the European Union without any agreement. Trading on Friday was calmer, with the pound helped by some selling in the dollar, but the currency remains at the mercy of May's fortunes. Sterling was up 0.6 percent to $1.2824 at 2025 GMT after earlier hitting as high as $1.2877.

USD/CAD is supported at 1.3087 levels and is trading at 1.3152 levels. It has made session high at 1.3175 and lows at 1.3125 levels. The Canadian dollar strengthened one week high against greenback on Friday, as oil prices rose and domestic data showed that factory sales edged higher in September. The price of oil, one of Canada's major exports, rose on expectations that OPEC and its allies would agree to cut output next month but prices were still down on the week on concerns that the global market was oversupplied. Canadian factory sales rose 0.2 percent in September from August on higher shipments of autos as production ramped up after a series of assembly plant shutdowns, Statistics Canada said. Analysts had forecast a 0.3 percent gain. In separate domestic data, net foreign investment in Canadian securities jumped to C$7.70 billion in September from a year-low C$2.63 billion in August on higher purchases of money market paper. Gains for the loonie came as mounting uncertainty over Britain's draft Brexit deal with the European Union cast a shadow over foreign exchange markets, while comments by Fed policymakers about slowing global growth weighed on the greenback. The Canadian dollar was last trading 0.3 percent higher at 1.3150 to the greenback.

USD/JPY is supported around 112.54 levels and currently trading at 112.87 levels. It peaked to hit session high at 112.93 and made session lows at 112.62 levels. The U.S. dollar declined against the yen on Friday as cautions comments by Federal Reserve officials on interest rate hikes and Brexit turmoil increased demand for safe haven yen. The greenback fell to one-week lows versus the yen following comments from Fed Vice Chair Richard Clarida, who told CNBC television he saw some evidence of global growth cooling. Meanwhile, currency traders are keeping an eye on concrete signs that Washington and Beijing are seeking to de-escalate their trade dispute.A Financial Times report on Thursday said U.S. Trade Representative Robert Lighthizer had told some industry executives that another round of U.S. tariffs on Chinese imports had been put on hold. A U.S. Trade Representative spokesperson later denied the report. The dollar index, which measures the greenback against a basket of currencies, fell 0.49 percent. Against the yen, the greenback was down 0.71 at 112.87 yen.

Equities Recap

European shares wobbled and closed just in the red after a choppy session on Friday as traders waited to see if Britain's Prime Minister Theresa May would face a no-confidence vote over her draft European Union divorce deal.

UK's benchmark FTSE 100 closed down by 0.1 percent, the pan-European FTSEurofirst 300 ended the day down by 0.09 percent, Germany's Dax ended flat, France’s CAC finished the day down by 0.1 percent.

The S&P 500 and Dow Industrials rose on Friday after President Donald Trump said the United States may not have to impose further tariffs on Chinese goods, but declines in shares of Nvidia Corp, Amazon.com Inc and Facebook Inc helped to drag down the Nasdaq.

Dow Jones closed up by 0.51 percent, S&P 500 ended up by 0.24 percent, Nasdaq finished the day down by 0.14 percent.

Treasuries Recap

U.S. Treasury yields retreated on Friday after a top Federal Reserve official said U.S. interest rates are nearing the central bank's estimates of a neutral level, suggesting that the current tightening cycle may soon end.

In afternoon trading, U.S. 10-year note yields fell as low as 3.066 percent, a two-week low, from 3.118 percent late Thursday. Yields were last at 3.077 percent.

U.S. 30-year bond yields were down at 3.331 percent, from 3.366 percent on Thursday. Earlier in the session, 30-year yields dropped to two-week troughs of 3.323 percent.

On the short end of the curve, U.S. two-year yields slid to a two-week trough of 2.804 percent, compared with Thursday's 2.862 percent. Two-year yields were last at 2.812 percent.

Commodities Recap

Gold rose as much as 1 percent on Friday as the dollar fell after U.S. Federal Reserve officials made cautions comments on the outlook for interest rate hikes, while palladium hit a record high driven by worries about short supplies.

Spot gold   rose 0.7 percent to $1,221.60 an ounce by 13:52 p.m. EST (1852 GMT). The session high was the highest since Nov. 8 at $1,225.29. Gold has gained over 1 percent so far this week, its best in five weeks. U.S. gold futures   settled up $8, or 0.7 percent, at $1,223.

Oil traded up slightly in a volatile session on Friday, supported by expectations that the Organization of the Petroleum Exporting Countries would agree to cut output next month, though prices were set to for a weekly drop on underlying oversupply worries.

Brent was up 19 cents, or 0.3 percent, at $66.81 a barrel by 1:39 p.m. EDT (1839 GMT). The global benchmark looked set for a third day of gains since hitting an eight-month low on Tuesday, but was down more than 4.7 percent on last week's close.

U.S. crude rose 8 cents, or 0.1 percent, to $56.54 a barrel after earlier hitting a session high of $57.96 and falling to as low as $55.89 a barrel. The contract had its steepest one-day loss in more than three years on Tuesday. U.S. crude is on track to fall nearly 6 percent in the week, the sixth straight week of declines.
 

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