Market Roundup
- China media welcomes U.S. trade truce, markets surge
- G20 sealed landmark deal on WTO reform by ducking 'taboo words'
- China, U.S. declare 90-day halt to new tariffs - White House
- Britain's Labour threatens PM May with new Brexit hurdle
- Macron tells PM to hold talks after worst unrest in Paris for decades
- Trump to notify Congress in 'near future' he will terminate NAFTA
- Oil surges on U.S.-China trade truce, plans to cut output
- China Nov Caixin Mfg PMI Final, 50.2, 50.0 f’cast, 50.1 prev
- Japan Nov Nikkei Mfg PMI, 52.2, 51.8 prev
- Japan Q3 Business Capex (MOF) (Y/Y), 4.5%, 12.8% prev
- Australia Oct Building Approvals, -1.5%, -2.0% f’cast, 3.3% prev, 5.5% r'vsd
- Australia Q3 Business Inventories, 0.0%, 0.4% f’cast, 0.6% prev, 0.7% r'vsd
- New Zealand Q3 Terms of Trade (q/q), -0.3%, 0.1% f'cast, 0.6% prev
Economic Data Ahead
- (0345 ET/0845 GMT) Italy Nov Markit /ADACI Mfg PMI, 48.9 f'cast, 49.2 prev
- (0350 ET/0850 GMT) France Nov Markit Mfg PMI, 50.7 f'cast, 50.7 prev
- (0355 ET/0855 GMT) Germany Nov Markit/BME Mfg PMI, 51.6 f'cast, 51.6 prev
- (0400 ET/0900 GMT) EZ Nov Markit Mfg Final PMI, 51.5 f'cast, 51.5 prev
- (0430 ET/0930 GMT) Great Britain Nov Markit/CIPS Mfg PMI, 51.8 f'cast, 51.1 prev
Key Events Ahead
- N/A ECB President Mario Draghi and ECB Executive Board Member Benoit Coeure participate in Eurogroup meeting in Brussels
- (0800 ET/1300 GMT) Fed Vice-Chair for Supervision Randall Quarles participates in a moderated question-and-answer session in New York
- (0900 ET/1400 GMT) Eurozone finance ministers meet to discuss eurozone budget, new powers for their bailout fund and a deposit guarantee scheme in Brussels
- (0915 ET/1415 GMT) New York Fed President John Williams speaks at The Evolving Structure of the U.S. Treasury Market conference in New York
- (1030 ET/1530 GMT) Federal Reserve Board Governor Lael Brainard speaks at a conference in New York
- (1230 ET/1730 GMT) BoE Chief Economist Andy Haldane speaks in Cambridge on public policy in London
- (1300 ET/1800 GMT) Dallas Fed President Robert Kaplan participates in a moderated question-and-answer session in Laredo
FX Beat
DXY: The dollar slumped across the board, as the demand for riskier assets rose after U.S. President Donald Trump stated that China has agreed to reduce and remove tariffs below the 40 percent level that Beijing is currently charging on U.S.-made vehicles. The greenback against a basket of currencies trades 0.3 percent down at 96.89, having touched a high of 97.54 on Wednesday, its highest since Nov 13. FxWirePro's Hourly Dollar Strength Index stood at 58.25 (Bullish) by 0500 GMT.
EUR/USD: The euro surged as the European Union finance ministers are expected to agree to give the eurozone bailout fund new responsibilities and discuss economic integration of the bloc to prepare for the next potential crisis. The European currency traded 0.3 percent up at 1.1347, having touched a high of 1.1401 on Thursday, its highest since Nov. 23. FxWirePro's Hourly Euro Strength Index stood at -20.93 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, and EZ Sentix investor confidence ahead of the U.S. manufacturing PMI's, construction spending and FOMC member Brainard's speech. Immediate resistance is located at 1.1420 (November 16 High), a break above targets 1.1472 (November 20 High). On the downside, support is seen at 1.1305 (November 30 Low), a break below could drag it till 1.1263 (November 26 Low).
USD/JPY: The dollar edged up, halting a 3-day winning streak after the United States and China agreed to halt additional tariffs in a deal that keeps their trade war from escalating as both the economies try again to bridge their differences with fresh talks aimed at reaching an agreement within 90 days. The major was trading 0.1 percent up at 113.53, having hit a high of 114.03 on Wednesday, its highest since November 13. FxWirePro's Hourly Yen Strength Index stood at 69.79 (Bullish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. manufacturing PMI's, construction spending and FOMC member Brainard's speech. Immediate resistance is located at 114.03 (November 28 High), a break above targets 114.23 (November 12 High). On the downside, support is seen at 113.09 (November 15 Low), a break below could take it lower 112.88 (November 22 Low).
GBP/USD: Sterling rallied, reserving some of its previous session losses, as investors remain cautious about the British parliament's vote on Brexit next month. Prime Minister Theresa May faces a challenge to win a parliament vote next week on a transition deal aimed at avoiding a hard Brexit when Britain leaves the European Union on March 29. The major traded 0.2 percent up at 1.2776, having hit a low of 1.2732 earlier; it’s lowest since November 27. FxWirePro's Hourly Sterling Strength Index stood at -82.89 (Slightly Bearish) 0500 GMT. Investors’ attention will remain UK manufacturing PMI, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2819 (November 27 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2725 (November 27 Low), a break below targets 1.2695 (October 30 Low). Against the euro, the pound was trading 0.2 percent down at 88.92 pence, having hit a low of 89.24 on Friday, it’s lowest since Nov. 19.
AUD/USD: The Australian dollar rallied to an over 3-month high after the White House stated that President Donald Trump told China's President Xi Jinping at the G20 talks in Argentina that he would not raise tariffs on $200 billion of Chinese goods to 25 percent on Jan. 1 as previously announced. The Aussie trades 0.8 percent up at 0.7365, having hit a high of 0.7380 earlier; it’s highest since August 21. FxWirePro's Hourly Aussie Strength Index stood at 21.61 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7333 (August 22 Low), a break below targets 0.7307 (August 27 Low). On the upside, resistance is located at 0.7405 (August 6 High), a break above could take it near 0.7441 (July 31 High).
NZD/USD: The New Zealand dollar advanced to a 5-month peak, after U.S. and Chinese leaders negotiated a truce in their trade conflict, providing a relief for the global economic outlook. The Kiwi trades 0.4 percent up at 0.6907, having touched a high of 0.6917, its highest level June 25. FxWirePro's Hourly Kiwi Strength Index was at 93.36 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6921 (June 25 High), a break above could take it near 0.6955 (June 18 High). On the downside, support is seen at 0.6816 (November 9 Low), a break below could drag it below 0.6727 (November 19 Low).
Equities Recap
Asian shares rallied as U.S. President Donald Trump and Chinese President Xi Jinping agreed to halt new tariffs during talks in Argentina on Saturday.
MSCI's broadest index of Asia-Pacific shares outside Japan traded advanced 1.8 percent.
Tokyo's Nikkei rose 1.0 percent to 22,574.76 points, Australia's S&P/ASX 200 index gained 1.8 percent to 5,771.20 points and South Korea's KOSPI rallied 1.7 percent to 2,133.40 points.
Shanghai composite index surged 2.5 percent to 2,653.74 points, while CSI300 index traded 2.7 percent up at 3,258.63 points.
Hong Kong’s Hang Seng traded 2.4 percent higher at 27,152.91 points. Taiwan shares added 2.5 percent to 10,137.03 points.
Commodities Recap
Crude oil prices surged to a 10-day peak ahead of a meeting this week by producer cartel OPEC that is expected to result in a supply cut. International benchmark Brent crude was trading 5.4 percent up at $62.29 per barrel by 0520 GMT, having hit a low of $57.48 on Thursday, its lowest since October 2017. U.S. West Texas Intermediate was trading 5.9 percent up at $53.54 a barrel, after falling as low as $49.44 on Thursday, its lowest since the October 2017.
Gold prices rallied on a weaker dollar as China and the United States will attempt to bridge their differences via new talks aimed at reaching a deal within 90 days. Spot gold was 0.3 percent up at $1,225.15 per ounce at 0523 GMT, having touched a high of $1,228.86 on Thursday, its highest level since Nov. 22. U.S. gold futures were up 0.4 percent at $1,230.4 per ounce.
Treasuries Recap
The super-long Japanese government bonds edged lower, with the 20-year, the 30-year and the 40-year yields rising half a basis point each to 0.590 percent, 0.815 percent and 0.970 percent, respectively. The 10-year JGB futures gained 0.07 point to 151.24, after rising to a 14-1/2-month high the previous trading day.
The Australian government bond futures eased as risk appetite got a shot in the arm, with the 3-year bond contract off 1.5 ticks at 97.910. The 10-year contract dipped 2.5 ticks to 97.3800.
The New Zealand government bonds eased, sending yields 2 basis points higher along most of the curve.
