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Americas Roundup: Dollar slips as U.S. Senate tax bill details emerge, Gold rises, Wall Street ends lower, Oil prices rise on supply cuts and political tensions in Saudi Arabia-November 10th 2017


Market Roundup

• In Beijing, Trump presses China on North Korea and trade.

• Rival Republican tax-cut plans emerging in US Congress.

• Japan hails progress in TPP trade talks, but discord raises doubts.

• US Initial Jobless claims, 239k, 231k forecast, 229k previous.

• US Jobless claims 4-wk avg, 231.25k, 232.50k previous.

• US Continued Jobless claims, 1.901 mln, 1.890 mln forecast, 1.884 mln previous.

• US Sept Wholesale Invt(Y), R M/M, 0.3%, 0.3% forecast, 0.3% previous.

• US Sept Wholesale sales m/m, 1.3%, 0.9% forecast, 1.7% prev 1.9% revised .

• CA Sept New Housing Price index, 0.2%, 0.2% forecast, 0.1% previous.

• Eurozone to grow fastest in decade in 2017, to slow slightly in 2018, 2019.

• German exports dip, but robust orders brighten outlook.

• ECB can take more decisive steps once inflation moves higher.

Looking Ahead - Economic Data (GMT)

• 23:00 Japan Nov Reuters Tankan DI, 31 previous

• 02:00 China Nov TR IPSOS PCSI, 70.07 previous

• 02:00 Japan Nov TR IPSOS PCSI, 45.64 previous

• 02:00 Australia Nov TR IPSOS PCSI, 54.05 previous

Looking Ahead - Events, Other Releases (GMT)

• 12:30 ECB Executive Board member Yves Mersch speaks in the United Kingdom 

• 13:00 Greece central banker and member of ECB governing council Yannis Stournaras speaks in Athens

Currency Summaries

EUR/USD is likely to find support at 1.1600 levels and currently trading at 1.1647 levels. The pair has made session high at 1.1654 and hit lows at 1.1597 levels. Euro inched higher against the dollar on Thursday as the dollar eased as investors balked at details of the U.S. Senate Republicans' version of a tax cut plan. Rival Republican tax-cut plans emerged in the U.S. Congress on Thursday that differed on issues such as cutting the corporate income tax, the deduction for state and local taxes and the tax on inheritances paid by the richest Americans. U.S. Senate Republicans' version of a tax cut bill will delay corporate rate cuts by one year to take effect in 2019, and will not include a repeal of Obamacare's individual mandate, Republican Senate Finance Committee member Bill Cassidy said on Thursday. On the data front, the number of Americans filing for unemployment benefits rose more than expected last week, suggesting that claims processing disrupted by recent hurricanes has begun to improve. Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 239,000 for the week ended Nov. 4, the Labor Department said on Thursday. The euro was last up 0.47 percent at $1.1641 while the dollar index, which tracks the greenback against six major currencies, was down 0.45 percent to 94.437.

GBP/USD is supported in the range of 1.3081 levels and currently trading at 1.3164 levels. It reached session high at 1.3165 and dropped to session low at 1.3090 levels. Sterling inched up against the dollar on Thursday as expectations for a gradual tightening of policy from the Bank of England protected the pound from the political turmoil engulfing Prime Minister Theresa May's government. A string of scandals leading to two resignations from the cabinet in the space of just one week has raised doubts over the Conservative government's ability to secure a strong deal in negotiations over Britain's leaving the European Union, due to restart later in the day. However, sterling remained broadly stable on Thursday, as high levels of uncertainty in British politics have largely been priced in by the markets. Foreign aid minister Priti Patel was forced from office on Wednesday over undisclosed meetings with Israeli officials, just days after May's ally Michael Fallon, the defence secretary, resigned in a sexual harassment scandal. Sterling took a hit on Wednesday from falling bond yields as the gilt yield curve flattened to its lowest level in more than a year. The yield spread between two- and 10-year gilts narrowed to 75.9 basis points, its lowest level since early October 2016.

USD/CAD is supported at 1.2620 levels and is trading at 1.2669 levels. It has made session high at 1.2729 and lows at 1.2665 levels. The Canadian dollar strengthened on Thursday against its U.S. counterpart as rise in oil prices and weaker greenback boosted Canadian dollar. The U.S. dollar edged lower against a basket of major currencies, pressured by talk of possible delays to U.S. President Donald Trump's tax reform plans as well as a risk-averse mood. Prices of oil, one of Canada's major exports, were supported by major exporter supply cuts, but analysts said the market could be vulnerable to a sell-off after several months of gains. The loonie had added to gains it made after comments on Tuesday by Bank of Canada Governor Poloz. In a speech and news conference, Poloz maintained a neutral tone on the next interest rate move, repeating the bank's message that it was monitoring wage growth and inflation, as well as how the economy was adjusting to rate hikes in July and September. The Canadian dollar was last trading at C$1.2724 to the greenback. The currency's weakest level of the session was C$1.2740, while it touched its strongest since Oct. 25 at C$1.2668.

NZD/USD is supported around 0.6911 levels and currently trading at 0.6955 levels. It hit session high at 0.6979 and made session lows at 0.6931 levels. The New Zealand dollar strengthened against US dollar on Thursday after the country's central bank signalled a faster track for inflation and rise in interest rate. The Reserve Bank of New Zealand (RBNZ) left interest rates at a record low 1.75 percent, but said it expected inflation to jump back to the middle of its 1-3 percent target band almost a year earlier than previously thought. Governor Grant Spencer told a media conference that policies proposed by the new Labour government could boost economic growth by around half a percentage point in each of the next three years. The New Zealand dollar climbed as high as $0.6979, a level not seen since Oct. 24, from Wednesday's low of $0.6898. The kiwi dollar is on track to end the week higher for its second straight weekly gain, although it is still down over 7 percent since mid-year. The currency was bruised badly since the Labour coalition won power in October as investors feared its left-leaning policies would slow growth and foreign investment.

Equities Recap

European shares fell on Thursday as a series of underwhelming earning updates, including from industrial giant Siemens, prompted investors to take profits out of a market still trading near two-year highs.

UK's benchmark FTSE 100 closed down by 0.6 percent, the pan-European FTSEurofirst 300 ended the day down by 1.01 percent, Germany's DAX ended down by 1.3 percent, France’s CAC finished the day down by 1 percent.

Wall Street ended lower on Thursday, weighed down by losses in Apple Inc and other technology stocks as investors turned their attention to a U.S. Senate Republican plan that would delay corporate tax cuts that investors want very much.

Dow Jones closed down by 0.43 percent, S&P 500 ended down 0.38 percent, Nasdaq finished the day down by 0.59 percent.

Treasuries Recap 

U.S. Treasury yields rose on Thursday, with 10-year yields bouncing from near three-week lows, due to this week's government and corporate debt supply which was partly offset by concerns about the passage of a federal tax plan.

The 10-year Treasury yield traded at 2.333 percent, up over 1 basis point from Wednesday when it hit a near three-week trough of 2.304 percent, while the two-year yield dipped 1 basis point to 1.633 percent.

The yield spread between two-year and 10-year Treasuries The 10-year Treasury yield traded at 2.333 percent, up over 1 basis point from Wednesday when it hit a near three-week trough of 2.304 percent, while the two-year yield dipped 1 basis point to 1.633 percent.

The yield spread between two-year and 10-year Treasuries hit a fresh decade-tight level of 65.9 basis points earlier on Thursday, before steepening to 69.8 basis points.

Commodities Recap

Gold was higher on Thursday as a weaker dollar pushed prices during the session to a three-week high for the second time in successive days, while palladium dipped but stayed close to 16-year peak hit during the session.

Spot gold was up 0.4 percent at $1,286.27 an ounce by 1:42 p.m. EST (1842 GMT), after touching $1,288.13, its highest since Oct. 20.
U.S. gold futures for December delivery settled up $3.80, or 0.3 percent, at $1,287.50 per ounce.

Oil prices rose nearly 1 percent on Thursday, supported by supply cuts by major exporters as well as continuing concern about political developments in Saudi Arabia.

Brent crude oil was up 59 cents or 0.9 percent to $64.08 a barrel by 11:30 a.m. (1630), still close to Tuesday's intra-day high of $64.65, which was the highest since June 2015.

U.S. light crude was up 46 cents or 0.8 percent at $57.27, just shy of this week's more than two-year high of $57.69 a barrel.

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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 30763076m

ITExport Prices*

Actual

Forecast

Previous

111 %

November 27 09:00 UTC 30763076m

ITImport Prices*

Actual

Forecast

Previous

116.1 %

November 27 14:00 UTC 33763376m

MXTrade Balance, $*

Actual

Forecast

Previous

-1.886 Bln USD

November 27 14:00 UTC 33763376m

MXTrade Balance SA*

Actual

Forecast

Previous

-1.559 Bln USD

November 27 15:30 UTC 34663466m

USDallas Fed mfg bus index

Actual

Forecast

Previous

27.6

November 27 21:00 UTC 37963796m

KRBOK Manufacturing BSI*

Actual

Forecast

Previous

87 Bln BRL

November 28 00:00 UTC 39763976m

BRCentral Govt Balance

Actual

Forecast

Previous

-22.725 Bln BRL

November 28 07:00 UTC 43964396m

DEGDP Growth QQ* Advance

Actual

Forecast

Previous

10.7 %

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