Market Roundup
- You face a stark choice - Britain's May warns lawmakers over Brexit
- EU agrees 'best possible' Brexit deal, urges Britons to back May
- Italy's Salvini hints at tweak to 2019 deficit goal -report
- Australian regulators watching non-banks for financial stability risks – RBA
- Russia fires on and seizes Ukrainian ships near annexed Crimea
- Foreign CB US debt holdings +$15.020 bln to $3.405 trln Nov 21 week
- Treasuries +$15.644 bln to $3.031 trln, Agencies +1.100 bln to $307.737 bln
- U.S. fund investors buy short Treasuries at fastest pace in 2 yrs -Lipper
- U.S. muni bond funds post $332.2 mln in outflows-Lipper
- Japan Nov Nikkei Mfg PMI Flash, 51.8, 52.9 prev
- New Zealand Q3 Retail Sales Volumes (q/q), 0.00%, 1.10% prev
Economic Data Ahead
- (0400 ET/0900 GMT) Germany Nov Ifo Business Climate New, 102.3 f'cast, 102.8 prev
- (0400 ET/0900 GMT) Germany Nov Ifo Current Conditions New, 105.3 f'cast, 105.9 prev
- (0400 ET/0900 GMT) Germany Nov Ifo Expectations New, 99.2 f'cast, 99.8 prev
Key Events Ahead
- (0400 ET/0900 GMT) Speech by ECB board member Peter Praet at 33rd International ZinsForum 2018: Zinsen 2019 in Frankfurt, Germany
- (0700 ET/1200 GMT) Austrian Central Bank Governor Ewald Nowtny delivers opening speech at ONB conference on European Economic Integration in Vienna
- (0900 ET/1400 GMT) The President of the ECB, Mario Draghi, addresses the European Parliament in Brussels
- (1100 ET/1600 GMT) Introductory statement by the ECB President Mario Draghi in his capacity as ESRB Chair at ECON Hearing at the European Parliament in Brussels, Belgium
- (1330 ET/1830 GMT) Fed's New York Executive Vice President Richard Dzina speaks at The Clearing House and Bank Policy Institute's 2018 Annual Conference in New York
FX Beat
DXY: The dollar index consolidated within narrow ranges as the U.S. President Donald Trump and his Chinese counterpart Xi Jinping are expected to hold talks on the sidelines of a G20 summit in Argentina this week. The greenback against a basket of currencies trades 0.05 percent up at 96.95, having touched a high of 97.03, its highest since Nov 16. FxWirePro's Hourly Dollar Strength Index stood at 70.45 (Bullish) by 0400 GMT.
EUR/USD: The euro declined to a 1-week low amid an ongoing dispute between Rome and Brussels over Italy's free-spending budget, which breaks the European Commission's fiscal rules. However, the downside was limited after Italian Deputy Prime Minister Matteo Salvini indicated at the possibility of tweaking the country's deficit goal for next year that could open a negotiation to avoid a disciplinary procedure against Italy. The European currency traded 0.1 percent up at 1.1342, having touched a low of 1.1326 earlier, its lowest since Nov. 16. FxWirePro's Hourly Euro Strength Index stood at -52.57 (Bearish) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, and speeches from ECB Praet, Nowotny and Coeure, ahead of the Chicago Fed National Activity Index and Dallas Fed manufacturing business index. Immediate resistance is located at 1.1387 (October 30 High), a break above targets 1.1446 (November 8 High). On the downside, support is seen at 1.1317 (November 9 Low), a break below could drag it till 1.1270 (November 15 Low).
USD/JPY: The dollar rallied to a 1-week peak as investors are hoping a workable deal can come out of the G20 meeting this week. Moreover, data showing Japan's manufacturing activity expanded at the slowest pace in two years in November and new orders contracted for the first time since September 2016 dented the bid tone around the Japanese yen. The major was trading 0.2 percent up at 113.22, having hit a high of 113.28 earlier, its highest since November 16. FxWirePro's Hourly Yen Strength Index stood at 12.75 (Neutral) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, as the Chicago Fed National Activity Index and Dallas Fed manufacturing business index. 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 112.64 (November 16 Low), a break below could take it lower 112.14 (October 19 Low).
GBP/USD: Sterling steadied above the 1.2800 handle after the European Union leaders finally sealed a Brexit deal on Sunday and stated that the deal agreed with Prime Minister Theresa May was the best Britain will get in a warning to the British parliament not to reject it. The major traded 0.05 percent up at 1.2813, having hit a high of 1.2926 on Thursday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 35.82 (Slightly Bullish) 0400 GMT. Investors’ attention will remain BoE Governor Carney's speech, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2946 (November 12 High), a break above could take it near 1.2990 (October 24 High). On the downside, support is seen at 1.2764 (November 21 Low), a break below targets 1.2723 (November 14 Low). Against the euro, the pound was trading 0.1 percent down at 88.52 pence, having hit a high of 88.36 on Friday, it’s highest since Nov. 16
AUD/USD: The Australian dollar rebounded as markets steadied on hopes for progress on U.S.-China tariffs at an anxiously awaited G20 meeting later in the week. The Aussie trades 0.2 percent up at 0.7247, having hit a low of 0.7202 on Wednesday; it’s lowest since November 14. FxWirePro's Hourly Aussie Strength Index stood at -67.41 (Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7182 (November 5 Low), a break below targets 0.7154. On the upside, resistance is located at 0.7270 (November 9 High), a break above could take it near 0.7319 (August 17 High).
NZD/USD: The New Zealand dollar rebounded after falling to a near 2-week low on domestic data showing quarterly retail sales were flat in the third quarter. The Kiwi trades 0.2 percent up at 0.6791, having touched a low of 0.6755 earlier, its lowest level November 14. FxWirePro's Hourly Kiwi Strength Index was at -70.45 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6839 (November 15 High), a break above could take it near 0.6921 (June 25 High). On the downside, support is seen at 0.6727 (November 9 Low), a break below could drag it below 0.6700
Equities Recap
Asian shares rallied as investors await the upcoming G20 meeting in Buenos Aires on Nov.30, where U.S. President Donald Trump and Chinese President Xi Jinping are likely to discuss trade.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.8 percent.
Tokyo's Nikkei rose 0.7 percent to 21,798.24 points, Australia's S&P/ASX 200 index declined 0.8 percent to 5,671.60 points and South Korea's KOSPI surged 1.2 percent to 2,081.15 points.
Shanghai composite index fell 0.2 percent to 2,576.52 points, while CSI300 index traded 0.05 percent down at 3,142.32 points.
Hong Kong’s Hang Seng traded 1.6 percent higher at 26,333.19 points. Taiwan shares added 1.0 percent to 9,765.36 points.
Commodities Recap
Crude oil prices steadied after slumping nearly 8 percent in the previous session, amid weak fundamentals and struggling financial markets. International benchmark Brent crude was trading 0.9 percent up at $59.67 per barrel by 0433 GMT, having hit a low of $58.42 on Friday, its lowest since October 2017. U.S. West Texas Intermediate was trading 1.01 percent up at $50.88 a barrel, after falling as low as $50.14, its lowest since the October 2017.
Gold prices rose, as investors await a G20 meeting this week for signs of easing in the U.S.-China trade conflict, amid fears of a slowdown in global growth. Spot gold was trading 0.2 percent up at $1,223.84 per ounce at 0439 GMT, having hit a high of $1229.93 on Wednesday, its highest since Nov. 7.U.S. gold futures were flat at $1,223.3 per ounce.
Treasuries Recap
The Australian government bond futures were a fraction firmer, with the three-year bond contract up 1 tick at 97.885. The 10-year contract rose 1.5 ticks to 97.3600.
The yields on New Zealand government bonds fell 1.5 ticks across the curve.
