Market Roundup
- Trade deal possible at G20 but Chinese paper says U.S. must be 'fair minded'
- UK PM May says focused on Dec. 11 Brexit vote, not alternatives
- G20 members struggle for agreements ahead of Argentina summit
- Fed minutes: Further hike "warranted soon," debate opened on pause
- On eve of signing, North America trade pact still being finalized
- Trump ex-lawyer pleads guilty to lying about Moscow tower project
- Korea lifts interest rates amid property concerns, seen on hold in 2019
- Foreign CB US debt holdings -$3.314 bln to $3.401 tln Nov 28 week
- Treasuries -$2.416 bln to $3.028 tln, agencies -$893 mln to $306.844 bln
- China Nov NBS Manufacturing PMI, 50.0, 50.2 f’cast, 50.2 prev
- China Nov NBS Non-Mfg PMI, 53.4, 53.9 prev
- Japan Oct Industrial Output Prelim (m/m) SA, 2.9%, 1.2% f’cast, -0.4% prev
- Japan Nov CPI Tokyo Ex fresh food chg (y/y), 1.0%, 1.0% f’cast, 1.0% prev
- Japan Oct Jobs/Applicants Ratio, 1.62, 1.65 f’cast, 1.64 prev
- Japan Oct Unemployment Rate, 2.4%, 2.3% f’cast, 2.3% prev
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Oct Import Prices (y/y), 4.2% f'cast, 4.4% prev
- (0200 ET/0700 GMT) Germany Oct Retail Sales (y/y) Real, 2.7% f'cast, -2.6% prev
- (0200 ET/0700 GMT) Great Britain Nov Nationwide house price (y/y), 1.7% f'cast, 1.6% prev
- (0245 ET/0745 GMT) France Nov CPI (EU Norm) prelim chg (y/y), 2.2% f'cast, 2.5% prev
- (0400 ET/0900 GMT) Italy Oct Unemployment Rate, 10.1% f'cast, 10.1% prev
- (0500 ET/1000 GMT) EZ Nov HICP Flash (y/y), 2.0% f'cast, 2.2% prev
- (0500 ET/1000 GMT) EZ Nov HICP-X F&E Flash (y/y), 1.3% f'cast, 1.2% prev
- (0500 ET/1000 GMT) EZ Nov Unemployment Rate, 8.0% f'cast, 8.1% prev
- (0500 ET/1000 GMT) Italy Nov CPI (EU Norm) prelim (y/y), 1.6% f'cast, 1.7% prev
- (0500 ET/1000 GMT) Italy Nov CPI (EU Norm) prelim (m/m), -0.3% f'cast, 0.2% prev
Key Events Ahead
- (0345 ET/0845 GMT) Swedish central bank Deputy Governor Martin Floden will discuss the economic situation and current monetary policy at an information meeting Stockholm
- (0515 ET/1015 GMT) ECB board member Yves Mersch speaks at TIPS launch event in Rome
- (0745 ET/1245 GMT) ECB board member Benoit Coeure to moderate a panel discussion in Frankfurt
- (0900 ET/1400 GMT) New York Fed releases text of President John Williams's prepared remarks before a panel in New York
FX Beat
DXY: The dollar index eased as markets remain nervous as Trump sent mixed signals about the prospects for a trade deal with Beijing. The greenback against a basket of currencies trades 0.05 percent down at 96.76, having touched a high of 97.54 on Wednesday, its highest since Nov 13. FxWirePro's Hourly Dollar Strength Index stood at 37.89 (Neutral) by 0400 GMT.
EUR/USD: The euro consolidated within narrow ranges, after rising to a near 1-week peak in the previous session, as German annual inflation accelerated at a slower pace in November but stayed well above the European Central Bank's target. The European currency traded flat at 1.1329, having touched a high of 1.1401 on Thursday, its highest since Nov. 23. FxWirePro's Hourly Euro Strength Index stood at 84.04 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, ahead of the Chicago purchasing manager index and FOMC member Williams’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 1.1325 (November 14 Low), a break below could drag it till 1.1263 (November 26 Low).
USD/JPY: The dollar declined, extending losses for the third straight session, on growing expectations that the Federal Reserve would slow down its rate hikes, while investors awaited a closely watched meeting between the Chinese and U.S. presidents in Argentina this weekend for signs of a trade war detente. The major was trading 0.1 percent down at 113.40, having hit a high of 114.03 on Wednesday, its highest since November 13. FxWirePro's Hourly Yen Strength Index stood at -20.92 (Neutral) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the Chicago purchasing manager' index and FOMC member Williams speech. Immediate resistance is located at 113.70 (November 15 High), a break above targets 114.14 (November 13 High). On the downside, support is seen at 113.09 (November 15 Low), a break below could take it lower 112.64 (November 16 Low).
GBP/USD: Sterling edged down amid growing concerns about the UK parliament's vote on Brexit as Prime Minister Theresa May struggled to garner support from parliament for the agreement she sealed with European Union leaders. The major traded 0.05 percent down at 1.2779, having hit a low of 1.2725 on Tuesday; it’s lowest since November 15. FxWirePro's Hourly Sterling Strength Index stood at -65.35 (Bearish) 0400 GMT. Investors’ attention will remain UK nationwide housing prices, 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 0.1 percent down at 89.14 pence, having hit a low of 89.20 on Thursday, it’s lowest since Nov. 22.
AUD/USD: The Australian dollar steadied after rising to a 3-month peak in the previous session, as the markets waited for some clarity to emerge on U.S.-China trade at the G20 summit in Buenos Aires between Nov. 30-Dec. 1. The Aussie trades 0.05 percent up at 0.7318, having hit a high of 0.7344 on Thursday; it’s highest since August 29. FxWirePro's Hourly Aussie Strength Index stood at 19.25 (Neutral) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7277 (November 19 Low), a break below targets 0.7247 (November 8 Low). On the upside, resistance is located at 0.7362 (August 28 High), a break above could take it near 0.7405 (August 6 High).
NZD/USD: The New Zealand dollar traded within a narrow range ahead of the planned meeting between Chinese President Xi Jinping and the U.S. President Donald Trump at the G20 in Buenos Aires. The Kiwi trades 0.05 percent up at 0.6860, having touched a high of 0.6887 on Wednesday, its highest level June 26. FxWirePro's Hourly Kiwi Strength Index was at 37.89 (Neutral) by 0400 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 tumbled amid mixed signals from Washington about the prospects for a rapprochement with China on trade.
MSCI's broadest index of Asia-Pacific shares outside Japan traded advanced 0.1 percent.
Tokyo's Nikkei rose 0.3 percent to 22,319.59 points, Australia's S&P/ASX 200 index eased 1.6 percent to 5,667.20 points and South Korea's KOSPI declined 0.4 percent to 2,105.87 points.
Shanghai composite index fell 0.3 percent to 2,559.48 points, while CSI300 index traded 0.05 percent up at 3,137.73 points.
Hong Kong’s Hang Seng traded 0.4 percent higher at 26,545.17 points. Taiwan shares added 0.05 percent to 9,888.03 points.
Commodities Recap
Crude oil prices surged over a 1 percent on expectations that OPEC and Russia will agree some form of production cuts next week. International benchmark Brent crude was trading 1.7 percent up at $60.23 per barrel by 0454 GMT, having hit a low of $57.48 on Thursday, its lowest since October 2017. U.S. West Texas Intermediate was trading 0.8 percent up at $51.63 a barrel, after falling as low as $49.44 on Thursday, its lowest since the October 2017.
Gold prices steadied after rising to a 1-week peak in the previous session, as the dollar held gains ahead of the G20 meet in Argentina this weekend, where U.S. and Chinese leaders are scheduled to discuss trade matters. Spot gold trades flat at $1,224.25 per ounce at 0430 GMT, having touched a high of $1,228.86 on Thursday, its highest level since Nov. 22. U.S. gold futures were down 0.2 percent at $1,221.6 per ounce.
Treasuries Recap
The Australian government bonds climbed during Asian session tracking a similar movement in the United States counterpart after the Federal Reserve’s November monetary policy meeting minutes re-affirmed the case for continued interest rate hikes. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 2 basis points to 2.590 percent, the yield on the long-term 30-year bond also slumped 2 basis points to 3.116 percent and the yield on short-term 2-year traded 1 basis point lower at 2.001 percent.
The Canadian government bond prices were higher across the yield curve, with the two-year up 4 Canadian cents to yield 2.188 percent and the 10-year rising 20 Canadian cents to yield 2.304 percent. The 10-year yield touched its lowest intraday since Sept. 10 at 2.289 percent.
