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Americas Roundup: Dollar rises after strong U.S. services, factory data, US indexes closes up, Gold hits one-week, U.S. crude touches two-year high after rig count drops-November 4th 2017


Market Roundup

• US Oct Non-farm payrolls, 261k, 310k forecast, -33k previous 18k revised.

• US Oct Private payrolls, 252k, 303k forecast, -40k prev 15k revised.

• US Oct Unemployment rate, 4.1%, 4.2% forecast, 4.2% previous.

• US Oct Average earnings m/m, 0.0%, 0.2% forecast, 0.5% previous.

• US Oct Average earnings y/y, 2.4%, 2.7% forecast, 2.9% previous 2.8% revised.

• US Sept Intl trade m/m ($), -43.5 bln, -43.2 bln forecast, -42.4 bln previous -42.8 bln revised.

• US Oct ISM Non-Mfg PMI, 60.1, 58.5 forecast, 59.8 previous.

• US Sept factory orders m/m, 1.4%, 1.3% forecast, 1.2% previous.

• US Sept Durable goods R m/m, 2.0%, 2.2% previous.

• Canada Oct Employment change, 35.3k, 15.0k forecast, 10.0k previous.

• Canada Oct Unemployment rate, 6.3%, 6.2% forecast, 6.2% previous.

• Canada Sept Trade bal (C$), -3.18 bln, -3.00 bln forecast,-3.41 bln previous -3.18 bln revised.

• Atlanta Fed slashes U.S. Q4 GDP estimate to 3.3 pct.

• Trump says unsure if Tillerson will remain secretary of state.

• Cryptocurrencies' market cap hits record $200 bln as bitcoin soars.

• Merkel believes three-way coalition can work, Greens sceptical.

• Venezuela calls creditors to debt restructuring talks.

• UK economy peps up, bolstering BoE rate hike call –PMI.

• ECB's Nowotny eyes September for more clear-cut 'tapering' of stimulus.

Looking Ahead - Economic Data (GMT)

• No major economic events scheduled

Looking Ahead - Events, Other Releases (GMT)

• 23:50 BOJ issues minutes of its Sept. 20-21 policy meeting in Tokyo (Nov 5)

• 01:00 BOJ Governor Haruhiko Kuroda gives speech in Japan (Nov 6)

• 10:30 NY Fed releases text speech of Exec. VP Simon Potter delivered in Frankfurt (Nov 6)

• 15:00 ECB's Mersch and Bank of Slovenia Governor Bostjan Jazbec speak in Ljubljana (Nov 6)

• 17:00 NY Fed President William Dudley speaks in New York (Nov 6)

Currency Summaries

EUR/USD is likely to find support at 1.1571 levels and currently trading at 1.1604 levels. The pair has made session high at 1.1646 and hit lows at 1.1596 levels. The euro strengthened against the U.S. dollar on Friday as the dollar rose broadly after the release of U.S. factory orders and services sector data that beat estimates, reversing an earlier slide after an underwhelming October jobs report. The Institute for Supply Management's non-manufacturing purchasing managers' index rose to its highest level since 2005. New orders for U.S.-made goods rose for the second straight month in September and orders for core capital goods surpassed expectations. The dollar had earlier fallen to its lows of the day after the release of October U.S. non-farm payrolls, which came in below expectations. The jobs report showed its largest gain since July 2016, but missed economists' expectations for an increase of 310,000 jobs, following a particularly weak reading in September. The euro turned negative against the dollar, falling to its lowest level of the day after the U.S. factory orders and ISM non-manufacturing PMI data. The dollar index, which measures the greenback against six rival currencies, rose to its highest since Oct. 27, closing in on a nearly four-month peak.

GBP/USD is supported in the range of 1.3000 levels and currently trading at 1.3037 levels. It reached session high at 1.3129 and dropped to session low at 1.3037 levels. Britain's declined against the dollar on Friday after upbeat data on U.S. services and manufacturing overshadowed tepid wage growth. U.S. services activity rose at the fastest pace since August 2005 in October, according to the ISM report on the nation's non-manufacturing sector, easily outpacing analysts' expectations. Along with data showing rising factory orders, the report fueled hopes of increasing strength in the U.S. economy that could drive the Federal Reserve to raise interest rates at a faster-than-expected pace in coming months. Higher U.S. rates would likely dampen demand for emerging market currencies, which offer higher yields. Still, some traders remained concerned over the U.S. labor market's strength after a series of mixed reports. Earlier on Friday, data showed a sharp retreat in annual U.S. wage gains and a surge in the number of people dropping out of the workforce in October, casting a doubt over the labor market. The pound briefly rose after U.S. labour market data indicating that a slightly lower-than-expected number of jobs were added in October, but resumed downside as the U.S. currency recovered. In the US trading, the currency was last trading against the dollar at $1.3071.

USD/CAD is supported at 1.2692 levels and is trading at 1.2758 levels. It has made session high at 1.2780 and lows at 1.2713 levels. The Canadian dollar strengthened to a nine-day high against its U.S. counterpart on Friday after stronger-than-expected domestic jobs data supported the case for further interest rate increases from the Bank of Canada next year. The Canadian economy added more jobs than expected in October as wages posted their biggest gain in 18 months, a sign that labor market slack could be tightening despite strong employment growth over the last year. Statistics Canada on Friday reported a net gain of 35,300 jobs - all of them due to a boost in full-time positions - but added the jobless rate had edged up to 6.3 percent as more people sought work. The Bank of Canada, citing the need to remove monetary stimulus as the economy strengthened, raised interest rates in July and September and said it would closely review data before deciding whether to hike again. Adding to support for the loonie, oil prices neared their highest levels in more than two years, with buyers attracted by expectations of an extension to a global pact to cut output that has reduced oversupply. The Canadian dollar was last trading at C$1.2756 to the greenback, or 78.52 U.S. cents, up 0.6 percent. The currency's weakest level of the session was C$1.2829, while it touched its strongest since Oct. 25 at C$1.2712.

AUD/USD is supported around 0.7624 levels and currently trading at 0.7649 levels. It hit session high at 0.7671 and made session lows at 0.7637 levels. The Australian dollar slipped on Friday after disappointing retail sales data cemented views that interest rates will stay at record lows for a long time yet, while firm U.S. data also added bearish pressure. Retail sales were flat in September, data from the Australian Bureau of Statistics (ABS) showed, a big surprise given analysts had looked for a bounce of 0.4 percent following a shock decline in August. Annual retail growth is now crawling at 1.4 percent, levels last seen during the global financial crisis. Friday's data showed Australian retailers tried discounting their wares to entice shoppers, but overall sales volumes still only edged higher. The deflationary pulse led investors to further push forward the likely timing of an interest rate hike. Rates futures now are not fully priced for a 25-basis-points increase until early 2019.The Australian dollar declined 0.82 percent to trade at  $0.7649, leaving behind a more than one-week high of $0.7729 set on Thursday. For the week, the Aussie has so far managed to eke out a small 0.1 percent gain after two straight falls.

Equities Recap

European shares crept higher on Friday, with new records hit in London and Frankfurt, though earnings from French bank Societe Generale and Dutch telecoms group Altice weighed on their sectors and limited gains.

The UK's benchmark FTSE 100 closed up by 0.1 percent, FTSEurofirst 300 ended the day up by 0.26 percent, Germany's Dax ended up by 0.35 percent, and France’s CAC finished the up by 0.1 percent.

A surge in shares of heavyweight Apple helped push up major Wall Street indexes on Friday, as investors also assessed a mixed U.S. labor market report.

Dow Jones closed down by 0.09 percent, S&P 500 ended down 0.30 percent, Nasdaq finished the day up by 0.73 percent.

Treasuries Recap

U.S. Treasury yields were little changed on Friday after the government’s jobs report for October showed that wages did not pick up in the month, raising some concerns about continuing low inflation, though recent hurricanes were seen as distorting the data.

Benchmark 10-year notes gained 2/32 in price on the day to yield 2.343 percent, after falling as low as 2.323 immediately after the data.

The yield curve between two-year notes and 10-year notes flattened to 71.1 basis points, the narrowest since late 2007.

Commodities Recap

Gold fell to a one-week low on  Friday as consensus-beating U.S. economic data pushed the dollar higher, outweighing the impact of a lackluster jobs report.

Spot gold fell 0.6 percent to $1,267.95 an ounce by 2:26 p.m. EDT (1826 GMT), and was on track for third straight weekly decline. It hit its lowest level since Oct. 27 at
$1,265.16.U.S. gold for December delivery settled down 0.7 percent at $1,269.20.

Oil prices rose on Friday, with U.S. crude touching a two-year high, strengthening after U.S. rig data suggested drilling in the United States would throttle back.

U.S. West Texas Intermediate (WTI) crude settled up $1.10 or 2 percent, at $55.64 a barrel, the highest since July 2015.

Global benchmark Brent futures settled up $1.45 or 2.4 percent at $62.07 a barrel. Brent has risen around 38 percent since its low in June 2017.

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November 24 15:30 UTC Released

USECRI Weekly Index*

Actual

145.6 %

Forecast

Previous

145.6 %

November 24 14:45 UTC Released

US1st Half-Mth Infl YY*

Actual

54.6 %

Forecast

Previous

54.6 %

November 27 09:00 UTC 35303530m

ITExport Prices*

Actual

Forecast

Previous

111 %

November 27 09:00 UTC 35303530m

ITImport Prices*

Actual

Forecast

Previous

116.1 %

November 27 14:00 UTC 38303830m

MXTrade Balance, $*

Actual

Forecast

Previous

-1.886 Bln USD

November 27 14:00 UTC 38303830m

MXTrade Balance SA*

Actual

Forecast

Previous

-1.559 Bln USD

November 27 15:30 UTC 39203920m

USDallas Fed mfg bus index

Actual

Forecast

Previous

27.6

November 27 21:00 UTC 42504250m

KRBOK Manufacturing BSI*

Actual

Forecast

Previous

87 Bln BRL

November 28 00:00 UTC 44304430m

BRCentral Govt Balance

Actual

Forecast

Previous

-22.725 Bln BRL

November 28 07:00 UTC 48504850m

DEGDP Growth QQ* Advance

Actual

Forecast

Previous

10.7 %

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