Market Roundup
• NY Fed President John Williams stays the course on U.S. rate hikes amid growing doubts.
• Sterling inches higher as May battles to save her Brexit deal.
• Bitcoin breaches $5,000, plumbs fresh 13-month low.
• US Nov NAHB Housing Market Index, 60, 67 forecast, 68 previous.
• Italy says not changing budget plans as euro partners fret.
• EU welcomes Franco-German budget idea, more work needed.
• China will propose WTO reforms, but don't try to trap us - Beijing's WTO envoy.
• India cenbank board agrees to support small firms, ease capital norms.
Looking Ahead - Economic Data (GMT)
• No major economic data scheduled
Looking Ahead - Events, Other Releases (GMT)
• 09:15 ECB Chair of the Supervisory Board Daniele Nouy delivers speaks at the ECON Hearing at the European Parliament in Brussels
• 10:00 BoE Governor Carney, Deputy Governor Cunliffe and others answer questions about the November Inflation Report in London
• 13:00 Norway Central Bank Governor Olsen speaks at the Open Meeting On Alternative Norwegian Krone Reference Rates in Oslo
• 13:30 Federal Reserve Bank of Philadelphia issues non-manufacturing Business Outlook Survey for November in Philadelphia
• 16:30 ECB's Daniele Nouy participates in a conversation with Guntram B. Wolff, director at Bruegel in Brussels
• 18:00 Bank of Canada Senior Deputy Governor Carolyn A. Wilkins gives speech at McGill University, Montreal
Currency Summaries
EUR/USD is likely to find support at 1.1390 levels and currently trading at 1.1452 levels. The pair has made session high at 1.1463 and hit lows at 1.1413 levels. The euro rose higher against dollar on Monday as cautious comments about the U.S. economy from Federal Reserve officials weighed on greenback. Fed Vice Chair Richard Clarida and Dallas Fed President Robert Kaplan on Friday raised concerns over a potential global slowdown that has markets betting heavily that the rate-hike cycle is on its last legs, even as they still signaled further interest rate increases ahead. Fed Chairman Jerome Powell on Wednesday also cited slowing global growth as a headwind to the U.S. economy. The dollar has been the surprise winner of 2018, having risen nearly 10 percent from April lows thanks to a combination of interest rate hikes and strong economic data. But the growing view that U.S. economic growth may have peaked has begun to erode the gains. Against a basket of six major currencies, the greenback fell to 96.12, its lowest since Nov. 8, after falling nearly half a percent last week, its biggest weekly drop since late September. The index was last down 0.26 percent at 96.17. The euro was last trading at $1.1452, up 0.3 percent, after hitting two-week highs earlier.
GBP/USD is supported in the range of 1.2718 levels and currently trading at 1.2852 levels. It reached session high at 1.2873 and dropped to session low at 1.2790 levels. Sterling strengthened against the dollar on Monday as growing hopes of a Brexit deal breakthrough supported sterling. British Prime Minister Theresa May sought to win support for her draft European Union divorce deal which has come under attack from many in her ruling Conservative Party. Since striking a deal with the EU on Tuesday, May has faced the most perilous crisis of her premiership with several cabinet ministers resigning, including her Brexit minister. May has pledged to fight on, warning that toppling her risks delaying Britain's exit from the EU, or leaving without a deal, a step that could thrust the world's fifth largest economy into the unknown. The pound rose 0.2 percent versus a weaker dollar to $1.2852. That takes sterling away from lows of $1.2725 hit last week, but the British currency was as high as $1.3176 earlier this month before the UK draft deal struck with the EU triggered a wave of resignations. Against the euro, sterling fell 0.1 percent to 89.10 pence per euro.
USD/CAD is supported at 1.3123 levels and is trading at 1.3178 levels. It has made session high at 1.3202 and lows at 1.3157 levels. The Canadian dollar declined against its U.S. counterpart on Monday as concern about trade tensions between China and the United States weighed on Canadian dollar. The Canadian dollar also came under pressure on Monday as worries about growing supply of crude weighed on the price of oil. Deep divisions on trade between Washington and Beijing were evident at the Asia-Pacific Economic Cooperation summit, with leaders on Sunday failing to agree on a communique for the first time in their history. U.S. Vice President Mike Pence said in a blunt speech on Saturday that there would be no end to U.S. tariffs on $250 billion of Chinese goods until China changed its ways. This week's domestic event calendar is busy with public appearances by Carolyn Wilkins, senior deputy governor at the Bank of Canada, and Bank of Canada Deputy Governor Timothy Lane, ahead of CPI and retail sales data due on Friday. The Canadian dollar was last trading down 0.26 percent against the greenback, at 1.3178. On Wednesday, the currency hit its weakest level since July 20 at 1.3200.
AUD/USD is supported around 0.7248 levels and currently trading at 0.7292 levels. It hit session high at 0.7306 and made session lows at 0.7275 levels. The Australian dollar eased against dollar on Monday as renewed tensions between China and the United States dimmed investors sentiment. U.S. Vice President Mike Pence said on Saturday the United States would not back down from its trade dispute with China, and might even double its tariffs, unless Beijing bows to U.S. demands. Pence's remarks spoiled the party for Aussie bulls who had pushed the currency above key chart resistance of 73 U.S. cents on Friday. It climbed as high as $0.7338, a level not seen since late August. The Australian dollar, which is often played as a liquid proxy for global trade prospects, slipped 0.5 percent to $0.7292, breaking its four-day winning streak. The Aussie jumped 1.5 percent last week for its third straight weekly rise. If gains are sustained through November, it will be the strongest monthly showing since mid-2017.
Equities Recap
European shares resumed their slide on Monday to end at a three-week low as tech stocks came under fresh selling pressure on worries over Apple's iPhone demand and as carmaker Renault sank after the arrest of its CEO for alleged financial misconduct.
UK's benchmark FTSE 100 closed down by 0.16 percent, the pan-European FTSEurofirst 300 ended the day down by 0.70 percent, Germany's Dax ended down by 0.92 percent, France’s CAC finished the day down by 0.87 percent.
U.S. stocks dropped on Monday as investors dumped Apple, internet and other technology shares, further shaking confidence in a group of stocks that has propelled the long bull market.
Dow Jones closed down by 1.55 percent, S&P 500 ended down by 1.68 percent, Nasdaq finished the day down by 3.04 percent.
Treasuries Recap
U.S. Treasury yields fell to six-week lows on Monday as stocks fell, boosting demand for low-risk U.S. government debt.
Benchmark 10-year notes gained 6/32 in price to yield 3.054 percent, the lowest since Oct. 3 and down from 3.074 percent on Friday.
Commodities Recap
Gold inched up on Monday as the dollar fell, but the metal stayed in a tight range as investors held off on big moves ahead of the U.S. Thanksgiving holiday on Thursday.
Spot gold was 0.2 percent higher at $1,224.13 per ounce by 13:45 p.m. EST (1845 GMT) after hitting a one-week high of $1,225.29 in the previous session. U.S. gold futures settled up $2.30, or 0.2 percent, at $1,225.30.
Brent crude futures fell in choppy trade on Monday, under pressure from growing supply but supported by a reported drawdown of U.S. oil inventories, potential European Union sanctions on Iran and possible OPEC production cuts.
Brent crude was down 31 cents a barrel at $66.45 at 1:26 p.m. EST (1826 GMT), off a session low of $65.27. U.S. crude futures traded 14 cents higher at $56.60 a barrel in a session that saw swings in a $2 per barrel range.
