Market Roundup
- May says to return to Brussels on Saturday in bid to seal Brexit deal
- UK's Hammond says no-deal Brexit would cost tens of billions
- EU moves to discipline Italy over budget, Rome remains defiant
- U.S. Republican senators urge vote on new NAFTA deal this year
- Trump praises Saudi Arabia amid pressure over ally
- Canada unveils investment tax break, says budget gap smaller than forecast
- China's local government debt sales reaching annual limit amid greater fiscal support
- Japan to spend over Y2 trln to ease pain from sales tax hike – Nikkei
- Japan Oct CPI, Core Nationwide (yy), 1.0%, 1.0% f'cast, 1.0% prev
- Japan Oct CPI, Overall Nationwide, 1.4%, 1.2% prev
Economic Data Ahead
- (0245 ET/0745 GMT) France Nov Business Climate Mfg, 104 f'cast, 104 prev
- (1000 ET/1500 GMT) EZ Nov Consumer Confid. Flash, -3.0 f'cast, -2.7 prev
Key Events Ahead
- (0700 ET/1200 GMT) Spanish Economy Minister Nadia Calvino to hold press conference with OECD General Secretary Angel Gurria on Spanish Economic Study in Madrid
- (0730 ET/1230 GMT) ECB publishes the minutes of its October policy meeting in Frankfurt
- (0900 ET/1400 GMT) Canadian Finance Minister Bill Morneau will address a business community audience about the budget update in Ottawa
- (0945 ET/1445 GMT) Bank of Canada Senior Deputy Governor Carolyn A. Wilkins participate in a Panel at Canadian Mortgage and Housing Corporation, Ottawa
- (1555 ET/2055 GMT) BoE Monetary Policy Committee Member Michael Saunders will speak at the Annual CBI South West Economics Dinner in London
FX Beat
DXY: The dollar index declined, extending previous session losses, as investors started to question how many interest rate hikes the Fed can implement next year without risking a slowdown in the U.S. The greenback against a basket of currencies trades 0.1 percent down at 96.65, having touched a low of 96.04 on Tuesday, its lowest since Nov 7. FxWirePro's Hourly Dollar Strength Index stood at 91.61 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro consolidated near the 1.4000 handle on hopes for a resolution of Italy's budget dispute. On Wednesday, the European Commission took the initial step toward disciplining Italy over its expansionary 2019 budget after Rome refused to change it. The European currency traded 0.1 percent up at 1.1394, having touched a high of 1.1472 on Tuesday, its highest since Nov. 7. FxWirePro's Hourly Euro Strength Index stood at 17.84 (Neutral) by 0500 GMT. Investors’ attention will remain on the Eurozone consumer confidence and ECB Mersch's speech, as the U.S. markets remain closed on account of Thanksgiving Day. Immediate resistance is located at 1.1420 (November 16 High), a break above targets 1.1499 (November 7 High). On the downside, support is seen at 1.1351 (November 8 Low), a break below could drag it till 1.1317 (November 9 Low).
USD/JPY: The dollar eased after rising to a 6-day peak earlier in the session, amid fears over a global growth slowdown, increasing doubts over monetary tightening path of the Federal Reserve and the U.S.-China trade conflict concerns. The major was trading 0.1 percent down at 113.00, having hit a high of 113.21, its highest since November 16. FxWirePro's Hourly Yen Strength Index stood at -41.03 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, as the U.S. markets remain shut on account of Thanksgiving Day. Immediate resistance is located at 113.38 (October 31 High), a break above targets 113.81 (November 7 High). On the downside, support is seen at 112.14 (October 19 Low), a break below could take it lower 111.82 (October 25 Low).
GBP/USD: Sterling continued to consolidate below the 1.2800 handle as investors refrained taking big positions ahead of European Union leaders meeting on Sunday, where the EU member will rubber-stamp Britain's withdrawal agreement and an outline of the two sides' new relationship after Britain exits the EU in March. The major traded 0.1 percent up at 1.2784, having hit a low of 1.2723 last week; it’s lowest since October 31. FxWirePro's Hourly Sterling Strength Index stood at -26.76 (Neutral) 0500 GMT. Immediate resistance is located at 1.2853 (October 29 High), a break above could take it near 1.2919 (October 25 High). On the downside, support is seen at 1.2723 (November 14 Low), a break below targets 1.2695 (October 30 Low). Against the euro, the pound was trading 0.05 percent down at 89.13 pence, having hit a low of 89.32 on Monday, it’s lowest since October 31.
AUD/USD: The Australian dollar eased as crude oil prices fell after U.S. crude inventories surged to their highest level since December 2017 amid increasing concerns of an emerging global glut. The Aussie trades 0.2 percent down at 0.7251, having hit a high of 0.7337 on Friday; it’s highest since August 29. FxWirePro's Hourly Aussie Strength Index stood at -87.49 (Slightly Bearish) by 0500 GMT. Immediate support is seen at 0.7182 (November 5 Low), a break below targets 0.7154. On the upside, resistance is located at 0.7281 (September 24 High), a break above could take it near 0.7319 (August 17 High).
NZD/USD: The New Zealand dollar declined as concerns over the U.S.-China trade war, followed by a weakening outlook for corporate profits, and rising U.S. interest rates dented Kiwi bulls’ sentiment. The major trades 0.4 percent down at 0.6804, having touched a high of 0.6883 on Friday, its highest level since late July. FxWirePro's Hourly Kiwi Strength Index was at -120.28 (Highly Bearish) by 0500 GMT. Immediate resistance is located at 0.6869 (November 20 High), a break above could take it near 0.6921 (June 25 High). On the downside, support is seen at 0.6754 (November 14 Low), a break below could drag it below 0.6720 (August 3 Low)
Equities Recap
Asian shares consolidated within narrow ranges as investors remain cautious amid escalating trade tensions and signs of slackening global growth.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.1 percent.
Tokyo's Nikkei rose 0.8 percent to 21,669.31 points, Australia's S&P/ASX 200 index rallied 0.9 percent to 5,691.30 points and South Korea's KOSPI plunged 0.4 percent to 2,068.72 points.
Shanghai composite index fell 0.2 percent to 2,647.61 points, while CSI300 index traded 0.3 percent down at 3,217.83 points.
Hong Kong’s Hang Seng traded 0.2 percent higher at 26,004.23 points. Taiwan shares shed 0.3 percent to 9,714.71 points.
Commodities Recap
Crude oil prices eased after U.S. crude inventories increased to their highest level since December 2017 amid concerns of an emerging global glut. International benchmark Brent crude was trading 0.4 percent up at $63.22 per barrel by 0449 GMT, having hit a low of $61.69 on Tuesday, its lowest since Dec. 6. U.S. West Texas Intermediate was trading 0.3 percent down at $54.42 a barrel, after falling as low as $52.80 on Tuesday, its lowest since the end of October 2017.
Gold prices steadied after hitting the highest in two weeks in the previous session, as investors remained cautious amid escalating trade tensions between U.S. and China. Spot gold was 0.1 percent higher at $1,226.50 per ounce at 0456 GM, having hit a high of $1229.93 on Wednesday, its highest since Nov. 7. U.S. gold futures were down 0.2 percent at $1,226.1 per ounce.
Treasuries Recap
The Japanese government bonds remained flat after the country’s national consumer price inflation (CPI) data for the month of October met market expectations, unchanged from the prior reading in September as well, ahead of a long holiday on account of Thanksgiving Day. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad higher at 0.094 percent, the yield on the long-term 30-year note hovered around 0.826 percent and the yield on short-term 2-year remained flat at -0.140 percent.
The Australian government bonds gained across the curve during Asian session on news reports that the Fed could pause its rate tightening cycle next year. But the yields on the U.S. Treasuries were relatively unchanged due to Thanksgiving holiday. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 4 basis points to 2.663 percent, the yield on the long-term 30-year bond also dipped 4 basis points to 3.184 percent and the yield on short-term 2-year down 2 basis points to 2.042 percent.
The Canadian government bond prices were lower across a flatter yield curve. The two-year fell 3.2 Canadian cents to yield 2.233 percent and the benchmark 10-year declined 9 Canadian cents to yield 2.361 percent. On Tuesday, the 10-year yield touched its lowest in more than two months at 2.332 percent.
