Market Roundp
• US Oct PPI Final Demand y/y, 2.9%, 2.5% forecast, 2.6% previous.
• US Oct PPI Final Demand m/m, 0.6%, 0.2% forecast, 0.2% previous.
• US Oct PPI ex Food/Energy y/y, 2.6%, 2.3% forecast, 2.5% previous.
• US Nov U Mich Sentiment Prelim, 98.3, 98.0 forecast, 98.6 previous.
• US Nov U Mich Conditions Prelim, 113.2, 114.4 forecast, 113.1 previous.
• US Nov U Mich Expectations Prelim, 88.7, 88.6 forecast, 89.3 previous.
• US Sep Wholesale Invt, R m/m, 0.4%, 0.3% forecast, 0.3% previous.
• US Sep Wholesale Sales m/m, 0.2%, 0.5% forecast, 0.8% previous, 0.7% revised.
• N.Y. Fed raises U.S. Q4 growth estimate to 2.69 pct.
• Jo Johnson resigns from UK government, calls for referendum to avoid Brexit vassalage or chaos.
• China Politburo member Yang says trade talks can resolve U.S. dispute .
• Pompeo says U.S. seeks friendly talks with China, but concerns remain.
• White House adviser Navarro to Wall Street: Stay out of U.S.-China trade talks..
• Italy stands by main pillars of budget as EU deadline nears .
• U.S. judge halts Keystone XL oil pipeline in blow to Trump, Trudeau.
Looking Ahead - Economic Data (GMT)
• 11 Nov 21:45 New Zealand Oct Elec Card Retail Sales y/y, 5.7% previous
• 11 Nov 23:50 Japan Oct Corp Goods Price m/m, 0.1% forecast, 0.3% previous
• 11 Nov 23:50 Japan Oct Corp Goods Price y/y, 2.7% forecast, 3.0% previous
• 12 Nov 08:30 ECB's Luis de Guindos gives the keynote speech at opening conference of 21st Euro Finance Week in Frankfurt
• 12 Nov 11:00 Deputy Governor Martin Flodén discusses the economic situation and monetary policy at Sparbanken Skåne in Kristianstad, Sweden
• 12 Nov 11:30 BOE's Sam Woods moderates a panel at Chatham House Conference on “The Future of London as a Financial Centre” in London
• 12 Nov 14:00 German Finance Minister Olaf Scholz speaks to the foreign press association (VAP) on a range of issues in Berlin
• 12 Nov 15:30 ECB's Danièle Nouy and Sabine Lautenschläger speak to students in a Youth Dialogue in Frankfurt
• 12 Nov 19:30 San Francisco Fed's Mary Daly speaks on the economic outlook before the Regional Economic Development for Eastern Idaho in Idaho Falls
Currency Summaries
EUR/USD is likely to find support at 1.1300 levels and currently trading at 1.1334 levels. The pair has made session high at 1.1357 and hit lows at 1.1315 levels. The euro declined against the dollar in the US session on Friday as dollar held steady after the U.S. Federal Reserve kept interest rates steady and reaffirmed its monetary tightening stance, setting up for a fourth interest rate hike this year in December. The greenback had fallen broadly following U.S. midterm elections on Tuesday on expectations that the outcome would make further fiscal stimulus measures unlikely. But the currency bounced back, and on Friday returned to outperforming most major currencies, underpinned by the robust U.S. economy and rising interest rates. The Fed is widely anticipated to raise interest rates in December, with traders' expectations at 75.8 percent, compared to 71.1 percent a day earlier, according to CME Group's FedWatch tool. The dollar index, which tracks the currency against six major peers, traded as high as 96.916 on Friday, not far from a 16-month peak of 97.2 touched on Oct. 31.The euro last traded at $1.135, down 0.12 percent. The single currency fell on Thursday after the European Commission forecast that the Italian economy would grow more slowly than Rome thinks in the next two years, leading to much bigger budget deficits than assumed by the government.
GBP/USD is supported in the range of 1.2934 levels and currently trading at 1.2968 levels. It reached session high at 1.3054 and dropped to session low at 1.2966 levels. The British pound declined against the greenback on Friday after Jo Johnson resigned from Prime Minister Theresa May's government over her "delusional" Brexit plans and called for another referendum on Britain's EU membership. The British currency was down as much as 0.7 percent to $1.2973 from around $1.3040 before the announcement from Johnson, a junior transport minister. The pound's initial drop was slow, as the news came towards the end of the European trading day when liquidity can be tight. In a damning critique of May's Brexit negotiations, Johnson said the government had argued itself into a choice between vassalage and chaos, the worst failure of statecraft since the 1956 Suez crisis. Johnson, who voted in the 2016 referendum to remain in the EU, is the brother of former foreign minister Boris Johnson, a leading Brexit supporter. May’s office said after Jo Johnson's resignation that there would be no second referendum on EU membership under any circumstances. The pound has traded as high as $1.3176 this week, a three-week high, after Britain appeared to be edging towards clinching an exit deal with the European Union.
USD/CAD is supported at 1.3135 levels and is trading at 1.3208 levels. It has made session high at 1.3231 and lows at 1.3173 levels. The Canadian dollar weakened to a two-month low against the greenback on Friday as oil prices extended recent declines, and after a court ruling that could delay construction of a major pipeline carrying heavy crude from Canada to the United States. A U.S. judge in Montana late on Thursday halted construction of the Keystone XL pipeline, throwing another obstacle in the path of the project that has been in development for a decade. The U.S. dollar rose towards a 16-month high after the U.S. Federal Reserve kept interest rates steady and reaffirmed its monetary tightening stance, cueing up investors for a rate hike in December. The price of oil, one of Canada's major exports, fell to multi-month lows as global supply increased and investors worried about the impact on fuel demand of lower economic growth and trade disputes. U.S. crude prices were down 1.2 percent at $59.97 a barrel. The Canadian dollar was last trading 0.3 percent lower at 1.3205 to the greenback, or 75.82 U.S. cents. The currency hit its weakest level since Sept. 6 at 1.3202.
AUD/USD is supported around 0.7210 levels and currently trading at 0.7223 levels. It hit session high at 0.7249 and made session lows at 0.7218 levels. The Australian dollar slipped lower against dollar on Friday after the Federal Reserve underlined the diverging monetary policies between the United States and the antipodean countries. The Australian dollar was last at $0.7223, easing from as high as $0.7303 touched on Thursday - a level not seen since late September. During the week so far, the Aussie has risen 0.7 percent for its second consecutive weekly gain after upbeat economic data from China, Australia's No.1 trading partner. Aussie rally was stopped by a resurgent dollar after the Fed signalled it was sticking to its tightening path with a more than 75 percent chance of a December rate hike priced in by the market. On the flip side, the Reserve Bank of Australia (RBA) has signalled it will keep rates on hold at a record low 1.50 percent for a long time to come. On Friday, the RBA upgraded its growth forecasts for the next couple of years and also sounded upbeat about the labour market. However, it still does not see a "strong case" for a near-term rate rise as inflation is expected to remain tepid.
Equities Recap
European shares slipped on Friday as mining and oil stocks sold off and weak results from Thyssenkrupp and Richemont weighed on sentiment.
UK's benchmark FTSE 100 closed down by 0.5 percent, the pan-European FTSEurofirst 300 ended the day down by 0.36 percent, Germany's Dax ended flat, France’s CAC finished the day down by 0.5 percent.
The S&P 500 fell steadily on Friday and deepened its losses as the day wore on with shares of large technology, industrial and material companies taking a hit after weak Chinese data and a slide in oil prices raised concerns about global growth.
Dow Jones closed down by 0.78 percent, S&P 500 ended down by 0.93 percent, Nasdaq finished the day down by 1.65 percent.
Treasuries Recap
U.S. Treasury yields fell on Friday with shorter-dated yields retreating from the highest levels in a decade, as investors scooped up safe-haven U.S. government debt due to losses in equities worldwide on worries about economic growth in China and U.S. interest rate hikes.
Benchmark 10-year Treasury yields was down 4 basis points at 3.191 percent, on track to end the week modestly lower.
The two-year yield was down nearly 4 basis points at 2.932 percent a day after touching a 10-1/2-year peak of 2.977 percent. It was poised to rise 2 basis points on the week.
Commodities Recap
Gold fell over 1 percent to a one-month low on Friday as the U.S. dollar strengthened after the Federal Reserve reaffirmed its monetary tightening stance, seen as a negative for non-yielding bullion.
Spot gold was down 1.3 percent at $1,207.78 per ounce at 13:30 a.m. EST (1830 GMT), having touched its lowest since Oct. 11 at $1,206.13. It was on track to end the week 2 percent lower, the steepest weekly decline since the week of Aug. 17.U.S. gold futures settled down $16.5, or 1.35 percent, at $1,208.60.
Oil prices fell nearly 1 percent on Friday as global supply increased and investors worried that oil demand growth could slow, with U.S. crude notching its longest stretch of daily declines since 1984.
Brent crude futures fell 47 cents, or 0.7 percent, to settle at $70.18 a barrel. It was down about 3.6 percent for the week and more than 15 percent this quarter.
U.S. West Texas Intermediate crude futures fell for the 10th straight day, the longest such streak since July 1984.
