Market Roundup
- Merkel's CDU agrees to pursue grand coalition in Germany
- No Irish border deal before EU trade agreement-British minister
- Irish PM "doing everything he can" to avoid election-spokesman
- China's new rules may bring sea change for millions of small investors
- China's Oct industrial profits surge on boost from higher commodities
- Japan plans extra budget of $24-26 bln for fiscal 2017 - sources
- Japan Oct corporate service prices +0.2% m/m, +0.8% y/y, Sept +0.1%, +0.9%
- BoJ Policy Board Suzuki – Room to debate fine-tuning of YCC when CPI up
- Negative rate policy impacting bank profits of concern – Mainichi
- Nationalists facing wipe out in Australian state election
- U.S. consumer watchdog agency official sues to block Trump's pick
- U.S. Rep. Conyers steps down from committee while lawmakers probe harassment allegations
- S&P downgrades South Africa's local currency debt to "junk" status
- Efforts to hurt Qatar's riyal may backfire on region, c. banker says
Economic Data Ahead
- (0400 ET/0900 GMT) Italy Consumer Confidence
- (0400 ET/0900 GMT) Italy Business Confidence
Key Events Ahead
- N/A EU Foreign Affairs Council meeting
- (0615 ET/1115 GMT) ECB's Constancio participates in a discussion – Frankfurt
- (0930 ET/1430 GMT) BoE's Haldane speaks in Brimingham
- (1730 ET/2230 GMT) Fed's Kashkari participates in a Q&A – Wiona
FX Beat
DXY: The dollar index held firm near 2-month lows as investors refrained from taking big bets ahead of President Donald Trump's meet with Senate Republicans on Tuesday to discuss the party's efforts to pass tax reform legislation. The greenback against a basket of currencies traded flat at 92.79, having touched a low of 92.68 on Friday, its lowest since Sept. 26. FxWirePro's Hourly Dollar Strength Index stood at -81.31 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro steadied above the 1.1900 handle after rising to a 2-month high on Friday, underpinned by the optimism over the Eurozone growth, especially, after last week’s robust flash manufacturing PMI reports and the German business climate numbers for November. The European currency traded flat at 1.1922, having touched a high of 1.1944 in the prior session, its highest since Sept. 22. FxWirePro's Hourly Euro Strength Index stood at 83.79 (Slightly Bullish) by 0500 GMT. Investors’ attention will remain on series of data from the Eurozone economies and EU financial stability report, ahead of U.S. new home sales data. Immediate resistance is located at 1.1950, a break above targets 1.2000. On the downside, support is seen at 1.1900, a break below could drag it lower 1.1814 (5-DMA).
USD/JPY: The dollar turned lower after rising to a 3-day high earlier in the session as persistently low inflation undermined the case for the Federal Reserve's rate hikes. The major was trading 0.1 percent down at 111.36, having hit a low of 111.07 on Thursday, its lowest since Sept. 18. FxWirePro's Hourly Yen Strength Index stood at 23.91 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. new home sales data for further momentum. Immediate resistance is located at 111.85 (78.6% retracement of 114.73 and 111.07), a break above targets 112.40 (10-DMA). On the downside, support is seen at 111.00, a break below could take it near 110.64.
GBP/USD: Sterling eased after rallying to a 7-week high as investors turned cautious ahead of the unveiling of UK's post-Brexit economy plan later in the day. The major traded 0.2 percent down at 1.3319, having hit a high of 1.3359 on Friday, it’s highest since Oct. 2. FxWirePro's Hourly Sterling Strength Index stood at 32.32 (Neutral) by 0500 GMT. Investors’ focus will remain on Britain’s government's plan post-Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3400, a break above could take it near 1.3456. On the downside, support is seen at 1.3289 (5-DMA), a break below targets 1.3229 (10-DMA). Against the euro, the pound was trading 0.2 percent down at 89.53 pence, having hit a low of 89.62 pence the prior session, it’s lowest since Nov. 16.
AUD/USD: The Australian dollar declined, extending previous session losses, despite the iron ore rally and U.S. Federal Reserve's waning confidence on inflation. The Aussie trades 0.1 percent down at 0.7602, having hit a high of 0.7638 on Thursday; it’s highest since Nov. 14. FxWirePro's Hourly Aussie Strength Index stood at -63.48 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7593 (Session Low), a break below targets 0.7555. On the upside, resistance is located at 0.7636 (21-DMA), a break above could take it near 0.7667 (61.8% retracement).
NZD/USD: The New Zealand dollar slumped as a tepid recovery staged by the U.S. dollar against its main competitors and disappointing Chinese industrial profits data and NZ Q3 retail sales report continued to weigh on Kiwi bulls sentiments. The major trades 0.2 percent down at 0.6862, having touched a high of 0.6905 on Thursday, its highest level since Nov. 15. FxWirePro's Hourly Kiwi Strength Index was at -144.55 (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 0.6904 (38.2% retracement of 0.6979 and 0.6780), a break above could take it near 0.6932 (23.6% retracement). On the downside, support is seen at 0.6844, a break below could drag it lower 0.6800.
Equities Recap
Asian shares eased from a decade high, undermined by weakness in the Chinese and South Korean markets, while the euro steadied near two-month peak on upbeat German sentiment data and political expectations.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.6 percent.
Tokyo's Nikkei declined 0.3 percent to 22,480.97 points, Australia's S&P/ASX 200 index eased 0.10 percent to 5,988.80 points and South Korea's KOSPI slumped 1.4 percent to 2,509.03 points.
Shanghai composite index fell 0.9 percent to 3,324.85 points, while CSI300 index was trading 1.3 percent down at 4,050.83 points.
Hong Kong’s Hang Seng was trading 0.6 percent lower at 29,676.74 points. Taiwan shares shed 0.9 percent to 10,750.93 points.
Commodities Recap
Crude oil prices steadied after rising to multi-week highs in the previous session, as global markets were supported by expectations an OPEC-led supply cut will be extended. International benchmark Brent crude was trading 0.1 percent up at $63.79 per barrel by 0451 GMT, having hit a high of $63.92 on Friday, its highest since Nov. 10. U.S. West Texas Intermediate was trading 0.5 percent lower at $58.66 a barrel, after rising as high as $59.02 last week, its highest since June 2015.
Gold prices held firm after falling for two straight sessions, as the dollar held close to a two-month low hit in the previous session against a basket of major currencies’. Spot gold was trading 0.2 percent up at $1290.27 an ounce at 0455 GMT, having touched a low of $1,274.36 last week, its lowest since Nov. 14. U.S. gold futures for December delivery were flat at $1,287.20.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.345 percent lower by 0.005 bps, while 5-year yield was 0.009 bps down at 2.073 percent.
The Australian government bond futures were mixed, with the three-year bond contract flat at 98.070. The 10-year contract inched 1.5 ticks higher to 97.4650.
The New Zealand government bonds eased, with yields on the long-end up 1-1.5 basis points.
