Market Roundup
- Special Counsel Mueller issued subpoena for Trump campaign documents-WSJ
- Tax overhaul drama moves to U.S. Senate as House approves its bill
- Fed's Kaplan: falling unemployment may trigger rate hikes
- Fed's Williams says December rate hike 'perfectly reasonable'
- ECB Nowotny – Corporate bonds could be bigger share of stimulus
- Confidence in euro zone expansion strong among economists- Rtrs poll
- Britain wants trade deal with EU "much closer than Canada"- Davis
- BoE's Carney says two more rate hikes likely in coming years - report
- RBNZ plans new standard for mortgage bonds to spur debt market activity
- New Zealand Oct Producer Price - Inputs, 1.0% vs 1.4%
- New Zealand Oct PPI Output, 1.0% vs 1.3%
- Moody's gives Modi a boost by raising India's sovereign bond rating
- BoJ trims amount of 1-3 JGBs buys to Y250 bln from Y280 bln at reg ops.
- Fitch – Japan regional banks face weak outlook and consolidation
- U.S. junk bond funds post 4th-biggest week of outflows ever -Lipper
- Foreign CB US debt holdings +$4.239 bln to $3.369 trln Nov 15 week
- Treasuries +$5.186 bln to $3.040 trln, agencies +$396 mln to +$262.26 bln
Economic Data Ahead
- (0400 ET/0900 GMT) EZ Sept Current Account NSA, Eur, last 29.6B
- (0400 ET/0900 GMT) EZ Sept Current Account SA, Eur, last 33.3B
Key Events Ahead
- (0330 ET/0830 GMT) ECB President Mario Draghi to speak at the European Banking Congress - Frankfurt
- (0330 ET/0830 GMT) Bundesbank President Jens Weidmann to address the European Banking Congress - Frankfurt
- (0330 ET/0830 GMT) Deutsche Bank CEO John Cryan to speak at the European Banking Congress- Frankfurt
- (0800 ET/1300 GMT) Bank of Norway Governor Oystein Olsen gives a speech at KPMG's Executive Conference - Oslo
FX Beat
DXY: The dollar index eased after the Wall Street Journal reported Special Counsel Robert Mueller's team last month subpoenaed President Donald Trump's campaign for documents containing specified Russian keywords from more than a dozen officials. The greenback against a basket of currencies traded 0.3 percent down at 93.62, having touched a low of 93.40 on Wednesday, its lowest since Oct. 20. FxWirePro's Hourly Dollar Strength Index stood at 31.06 (Neutral) by 0500 GMT.
EUR/USD: The euro rose, halting its 2-day losing streak as the greenback came under aggressive selling pressure on the WSJ reports of Special counsel Robert Mueller’s investigators have issued a subpoena to Trump’s election campaign for documents related to Russia. The European currency traded 0.3 percent up at 1.1805, having touched a high of 1.1860 on Wednesday; its highest since Oct. 13. FxWirePro's Hourly Euro Strength Index stood at 41.78 (Neutral) by 0500 GMT. Investors’ attention will remain on the Eurozone current account figures, ahead of the U.S. building permits and housing starts data. Immediate resistance is located at 1.1836 (Oct. 26 High), a break above targets 1.1880. On the downside, support is seen at 1.1750, a break below could drag it lower 1.1720.
USD/JPY: The dollar slumped to a 1-month low on a Wall Street Journal report that investigators into possible Russian interference in the 2016 U.S. presidential election had subpoenaed President Donald Trump's election campaign for documents. The major was trading 0.5 percent down at 112.53, having hit a low of 112.39 earlier, its lowest since Oct. 19. FxWirePro's Hourly Yen Strength Index stood at 38.93 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. building permits and housing starts figures for further momentum. Immediate resistance is located at 113.29 (5-DMA), a break above targets 113.65. On the downside, support is seen at 112.39 (Session Low), a break below could take it near 112.13 (Oct. 19 Low).
GBP/USD: Sterling rallied to a 2-week high as Asian traders responded to yesterday's better-than-expected UK retail sales release, while an initiative by European Central Bank President Donald Tusk on Brexit negotiations was taken as mildly positive. The major traded 0.3 percent up at 1.3233, having hit a high of 1.3243 earlier, its highest since Nov. 2. FxWirePro's Hourly Sterling Strength Index stood at 119.75 (Highly Bullish) by 0500 GMT. Investors’ focus will remain on political developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3280, a break above could take it near 1.3320. On the downside, support is seen at 1.3135 (Nov. 16 Low), a break below targets 1.3061 (Nov 13 Low). Against the euro, the pound was trading flat at 89.22 pence, having hit a low of 90.14 pence on Wednesday, its lowest since Oct. 20.
AUD/USD: The Australian dollar slumped to a fresh 4-1/2 month low as the crude oil prices weakened on concerns about surging U.S. supplies. The Aussie trades 0.3 percent down at 0.7567, having hit a low of 0.7567 earlier; it’s lowest since Jun. 26 and was 0.9 percent lower for the week so far. FxWirePro's Hourly Aussie Strength Index stood at -157.81 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7567 (Session Low), a break below targets 0.7530. On the upside, resistance is located at 0.7634 (78.6% retracement of 0.7883 and 0.7567), a break above could take it near 0.7687 (61.8% retracement).
NZD/USD: The New Zealand dollar extended losses for the seventh straight session on the back of downbeat NZ PPI report and the deteriorating business manufacturing sector activity. The Kiwi trades 0.2 percent down at 0.6838, having touched a low of 0.6836 on Thursday, its lowest level since Nov. 1 and was still down 1 percent on the week. FxWirePro's Hourly Kiwi Strength Index was at -146.41 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6889 (61.8% retracement of 0.6979 and 0.6836), a break above could take it near 0.6921 (38.2% retracement). On the downside, support is seen at 0.6820, a break below could drag it lower 0.6800.
Equities Recap
Asian shares advanced as strong U.S. earnings and a step forward in Congress on U.S. tax reform boosted market sentiment, while the greenback eased on Mueller subpoena story.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.8 percent.
Tokyo's Nikkei fell 0.1 percent to 22,378.20 points, Australia's S&P/ASX 200 index advanced 0.2 percent to 5,957.30 points and South Korea's KOSPI rallied 0.1 percent to 2,536.96 points.
Shanghai composite index declined 0.8 percent to 3,374.13 points, while CSI300 index was trading 0.01 percent up at 4,105.57 points.
Hong Kong’s Hang Seng was trading 0.8 percent higher at 29,248.85 points. Taiwan shares added 0.7 percent to 10,701.64 points.
Commodities Recap
Crude oil prices declined and were on track for their first weekly fall in six weeks as concerns about surging U.S. supplies put a dent in the market's recent rally. International benchmark Brent crude was trading 0.3 percent down at $61.18 per barrel by 0430 GMT, having hit a low of $61.06 on Thursday, its lowest since Nov. 3. U.S. West Texas Intermediate was trading 0.1 percent up at $55.28 a barrel, after falling as low as $54.87 on Tuesday, its lowest since Nov. 3.
Gold prices gained and were on course for a second straight weekly gain, as the dollar weakened after the report hit the wires that Special counsel Robert Mueller’s investigators have issued a subpoena to President Trump’s election campaign for documents related to Russia. Spot gold rose 0.4 percent to $1,282.81 per ounce by 0440 GMT and was up about 0.3 percent for the week. U.S. gold futures for December delivery edged up 0.1 percent to $1,279.21.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.359 percent lower by 0.002 bps, while 5-year yield was 0.008 bps down at 2.056 percent.
The Japanese government bonds traded narrowly mixed after the BOJ bought fewer bonds than in a previous operation. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.045 percent, the yield on long-term 40-year rose nearly 1 basis point to 0.984 percent and the yield on short-term 2-year declined 1/2 basis point to -0.192 percent.
The Australian bonds rise slightly on the last day of the week as investors moved away from riskier assets including equities and crude oil. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.591 percent, the yield on the long-term 30-year note also dipped 1 basis point to 3.371 percent and the yield on short-term 2-year declined 1 basis point to 1.793 percent.
The Canadian government bond prices were lower across the yield curve after the firm domestic data and as risk appetite recovered globally. The two-year fell 6 Canadian cents to yield 1.480 percent and the 10-year declined 47 Canadian cents to yield 1.972 percent.
