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Americas Roundup: Dollar pares losses against euro after U.S. data,Wall Street dips , Oil prices settle lower after U.S. crude stocks rise,gold falls

Market Roundup

• U.S. Senate Republicans add Obamacare gamble to tax plan.

• Fed's Evans will go into December meeting with open mind.

• Central banks can't fight rise in asset prices explicitly - Fed's Evans.

• US Oct Core CPI m/m SA, 0.2%, 0.2% forecast, 0.1% previous.

• US Oct Core CPI y/y NSA, 1.8%, 1.7% forecast, 1.7% previous.

• US Oct CPI m/m SA, 0.1%, 0.1% forecast, 0.5% previous.

• US Oct CPI y/y NSA, 2.0%, 2.0% forecast, 2.2% previous.

• US Oct Retail sales m/m, 0.2%, 0.0% forecast, 1.6% previous 1.9% revised.

• US Oct Retail sales m/m, Ex-Autos m/m, 0.1%, 0.2% forecast, 1.0% previous 1.2% revised.

• US Sept Business inventories m/m, 0.0%, 0.0% forecast, 0.7% previous, 0.6% revised.

• US Nov 10 w/e, MBA Mortgage Application, 3.1%, 0.0% previous.

• US Nov NY Fed manufacturing, 19.40, 26.00 forecast, 30.20 previous.

• Canada looks to U.S. Congress as one way to block U.S. NAFTA pullout.

• Canada home sales edge up in October, but prices fall.

• Against the clock, German parties haggle over immigration, euro budget.

• UK employment falls by most since 2015 as Brexit nears.

Looking Ahead - Economic Data (GMT)

• 23:50 Japan Nov 11 w/e Foreign bond investment, -729.7 bln previous

• 23:50 Japan Nov 11 w/e Foreign investment stock, -12.4 bln previous

• 00:30 Australia Oct Employment, 17.5k forecast, 19.8k previous

• 00:30 Australia Oct Unemployment rate, 5.5% forecast, 5.5% previous

• 00:30 Australia Oct Participation rate, 65.2% forecast, 65.2% previous

Looking Ahead - Events, Other Releases (GMT)

• 00:00 Bank of Canada Senior Deputy Governor Carolyn Wilkins speaks in New York

• 08:00 ECB Governing Council member Bostjan Jazbec speaks in Ljubljana

• 08:45 ECB's Yves Mersch speaks in Frankfurt, Germany

• 14:00 BOE's Carney, Broadbent, Cunliffe, Place, Ramsden and Woods speak in Liverpool

• 14:10 Cleveland Fed President Loretta Mester speaks in Washington

• 18:10 Dallas Fed President Robert Kaplan speaks in Houston

• 20:00 San Francisco Fed President John C. Williams speaks in San Francisco

• 20:00 ECB Vice President Vitor Constancio speaks in Ottawa

• 20:45 Fed Board Governor Brainard speaks in Michigan

• 21:30 New York Fed Vice President Simon Potter speaks in New York

Currency Summaries

EUR/USD is likely to find support at 1.1750 levels and currently trading at 1.1799 levels. The pair has made session high at 1.1860 and hit lows at 1.1788 levels. Euro edged lower against the dollar in the US session on Wednesday as dollar rebounded from earlier losses after data showed a surprise rise in retail sales last month as well as an uptick in underlying inflation, cementing expectations for an interest rate hike in December. U.S. consumer prices barely rose in October as the boost to gasoline prices from hurricane-related disruptions to Gulf Coast oil refineries was unwound, but rising rents and healthcare costs pointed to a gradual buildup of underlying inflation. The Labor Department said on Wednesday its Consumer Price Index edged up 0.1 percent last month after jumping 0.5 percent in September. Economists polled by Reuters had forecast the CPI nudging up 0.1 percent in October. Another report showed U.S. retail sales unexpectedly rose 0.2 percent in October, with the data for September revised to show sales jumping 1.9 percent rather than the previously reported 1.6 percent advance. The euro was down 0.03 percent at $1.1793 against the greenback, after earlier rising as high as $1.1860.The euro has gained in recent days as investors grow optimistic about the single currency's outlook with growing doubts about the prospects of the U.S. tax plan also underpinning gains.

GBP/USD is supported in the range of 1.3110 levels and currently trading at 1.3174 levels. It reached session high at 1.3185 and dropped to session low at 1.3132 levels. Sterling briefly rose to a five-day high against the dollar on Wednesday, after UK wages data came in slightly stronger than expected, though still lagging inflation. The pound had briefly climbed on the numbers, which showed workers' total earnings, including bonuses, rose by an annual 2.2 percent in the three months to September - slightly above an average forecast in a poll of a 2.1 percent rise. But after hitting a five-day high of $1.3215, sterling quickly slipped back, giving up all its earlier gains to trade flat at $1.3175 by 2030 GMT. Wednesday's numbers also showed the number of people in work in Britain fell by the most in more than two years in the three months to September, in the latest sign of weakness in Britain's Brexit-bound economy. At the same time, the inactivity rate - a measure of people not in work and not seeking a job - rose by the most in nearly eight years, the Office for National Statistics said. Investors are now keeping a close eye on Brexit developments. Prime Minister Theresa May's blueprint to leave the European Union emerged unscathed on Tuesday from a first day of debate in parliament on legislation to sever ties with the bloc. The debate is expected to last weeks.

USD/CAD is supported at 1.2700 levels and is trading at 1.2776 levels. It has made session high at 1.2786 and lows at 1.2708 levels. The Canadian dollar weakened to a one-week low against its U.S. counterpart on Wednesday as oil, while investors weighed trade uncertainties ahead of the resumption of NAFTA renegotiations. Prices of oil, one of Canada's major exports, slipped for a fourth day on a gloomy outlook for oil demand growth from the International Energy Agency. U.S. Senate Republicans on Tuesday linked repealing a key component of Obamacare to their ambitious tax-cut plan, raising new political risks and uncertainties for the tax measure that financial markets have been monitoring closely for months. On Tuesday, the Canadian government launched a North American Free Trade Agreement challenge of the U.S. Commerce Department's decision earlier this month to impose duties on softwood lumber exports from its northern neighbour. NAFTA working groups are due to begin meeting from Wednesday in Mexico. On Friday, talks will get underway and continue through Nov. 21. The Canadian dollar was trading at C$1.2782 to the greenback, or 78.24 U.S. cents, down 0.4 percent. The currency's strongest level of the session was C$1.2708, while it touched its weakest since Nov. 7 at C$1.2786.

AUD/USD is supported around 0.7555 levels and currently trading at 0.7582 levels. It hit session high at 0.7620 and made session lows at 0.7572 levels. The Australian dollar slipped to four-month low against the dollar on Wednesday as a surprisingly weak reading on wages threatened to keep inflation, and thus interest rates, lower for even longer than currently priced in. The Aussie shed 0.6 percent to $0.7580, leaving behind chart support at $0.7625/30 and putting at risk the next technical bulwarks at $0.7570 and $0.7535. The sell-off came after data showed wages rose by less than expected last quarter with even a mandated jump in the minimum wage failing to lift pay awards across the economy, a miserly outcome that threatens to further sap consumer spending and inflation. Wednesday's figures from the Australian Bureau of Statistics showed its wage price index rose 0.5 percent in the third quarter, from the second quarter, missing market forecasts of a 0.7 percent increase. Annual wage growth quickened to 2.0 percent, from a record low of 1.9 percent, but again was short of the 2.2 percent forecasted and only just above inflation at 1.8 percent. That augured ill for consumer spending and posed a challenge to the Reserve Bank of Australia (RBA) view that wages would ultimately pick up as the labour market tightened.

Equities Recap

A fall in commodity stocks and sustained profit-taking sent European shares to an eight-week low and their seventh straight session of losses on Wednesday, but Airbus rallied after winning a record plane deal.

UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.35 percent, Germany's Dax ended down by 0.4 percent, France’s CAC finished the day down by 0.1 percent.

U.S. stocks fell on Wednesday as energy sector shares dropped for a fourth straight session, tracking crude prices, while tech, the best performing sector this year, weighed the most on the S&P 500.

Dow Jones closed down by 0.58 percent, S&P 500 ended down 0.54 percent, Nasdaq finished the day down by 0.46 percent.

Treasuries Recap 

The gap between U.S. short-dated and long-dated U.S. Treasury yields contracted to its tightest in a decade after data showed a pickup in U.S. underlying inflation and an unexpected rise in retail sales, as the market priced in further interest rate hikes next year.

The gap between U.S. two-year note and U.S. 10-year note yields contracted to 63.4 basis points, the smallest since November 2007

In late afternoon trading, the 10-year Treasury yield fell to 2.336 percent, from 2.381 percent late on Tuesday.

The U.S. two-year yield was at 1.687 percent, from 1.691 percent on Tuesday.U.S. 30-year bond yields slid to 2.784 percent, down from Tuesday's 2.839 percent.

Commodities Recap

Gold prices dropped on Wednesday in see-saw trade, first rising to the highest since Oct. 20, then sliding and hovering near session lows, as the U.S. dollar pared losses.
Spot gold was down 0.2 percent at $1,277.51 by 1:41 p.m. EST (1841 GMT), after touching $1,289.09, the highest since Oct. 20. The metal remained up 0.8 percent for the week.

U.S. gold futures for December delivery settled down $5.20, or 0.4 percent, at $1,277.70 per ounce.

Oil prices dropped on Wednesday after the U.S. government reported an unexpected increase in crude and gasoline stockpiles, but an increase in refining runs and a drawdown in distillates helped prices bounce off session lows.

U.S. West Texas Intermediate (WTI) crude settled down 37 cents to $55.33 a barrel. Brent crude futures settled off 34 cents to $61.87 a barrel, a fourth straight day of declines for Brent.


 

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