Market Roundup
- China wants trade talks with United States to be equal, mutually beneficial
- China's cabinet says to push for more reforms in free trade zones
- Trump warns of government shutdown next month over border security
- EU, Britain agree draft deal on future relations
- EU struggles to agree on Gibraltar before Brexit summit
- Bank of England's Saunders sees higher rates if Brexit goes smoothly
- Oil hits 2018 lows on emerging supply glut
- Australia Nov Manufacturing PMI, 54.5, 54.3 prev
- Australia Nov Services PMI, 52.6, 50.8 prev
- Australia Nov Composite PMI, 52.9, 51.2 prev
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Q3 GDP Detailed (qq) SA, -0.2% f'cast, -0.2% prev
- (0200 ET/0700 GMT) Germany Q3 GDP Detailed (yy) NSA, 1.1% f'cast, 1.1% prev
- (0315 ET/0815 GMT) France Nov Markit Mfg Flash PMI, 51.0 f'cast, 51.2 prev
- (0315 ET/0815 GMT) France Nov Markit Serv Flash PMI, 55.0 f'cast, 55.3 prev
- (0330 ET/0830 GMT) Germany Nov Markit Mfg Flash PMI, 52.2 f'cast, 52.2 prev
- (0330 ET/0830 GMT) Germany Nov Markit Service Flash PMI, 54.5 f'cast, 54.7 prev
- (0500 ET/0900 GMT) EZ Nov Markit Mfg Flash PMI, 52.0 f'cast, 52.0 prev
- (0500 ET/0900 GMT) EZ Nov Markit Serv Flash PMI, 53.5 f'cast, 53.7 prev
- (0500 ET/0900 GMT) EZ Nov Markit Comp Flash PMI, 53.0 f'cast, 53.1 prev
Key Events Ahead
- N/A Bank of Italy publishes its Financial Stability Report in Rome
- N/A French Central Bank Governor Francois Villeroy de Galhau is to speak about the impact of Brexit on the financial sector of France in Paris
- (0700 ET/1200 GMT) ECB Vice President Luis de Guindos delivers speech on the occasion of the awarding of the German Bernacer Prize organized by Banco de Espana in Madrid, Spain
FX Beat
DXY: The dollar index slumped as the euro and sterling strengthened across the board. The greenback against a basket of currencies trades 0.1 percent down at 96.44, having touched a low of 96.04 on Tuesday, its lowest since Nov 7. FxWirePro's Hourly Dollar Strength Index stood at -43.71 (Neutral) by 0400 GMT.
EUR/USD: The euro surged, extending gains for the third straight session, after the European Central Bank's chief economist Peter Praet slashed hopes that it was about to launch a new cash addition to alleviate the pressure on struggling lenders in countries such as Italy. The European currency traded 0.1 percent up at 1.1414, having touched a high of 1.1472 on Tuesday, its highest since Nov. 7. FxWirePro's Hourly Euro Strength Index stood at 42.22 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, and EZ prelim Markit PMI's, ahead of the U.S. preliminary Markit PMI's. Immediate resistance is located at 1.1446 (November 8 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 a senior European Union official stated that trade tensions between the United States and China are likely to dominate the G20 summit next week. The major was trading 0.05 percent down at 112.90, having hit a high of 113.23 on Thursday, its highest since November 16. FxWirePro's Hourly Yen Strength Index stood at -63.96 (Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, as the U.S. preliminary Markit PMI's. 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 after rising to a 1-week peak in the previous session as Britain and the European Union negotiators agreed a declaration on the two sides' future ties. However, control of Gibraltar must still be settled with Spain before EU leaders meet on Sunday in order to sign the pact. The major traded 0.05 percent up at 1.2878, having hit a high of 1.2926 on Thursday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 98.50 (Slightly Bullish) 0400 GMT. 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 1.2793 (November 19 Low), a break below targets 1.2723 (November 14 Low). Against the euro, the pound was trading 0.2 percent down at 88.63 pence, having hit a high of 88.40 on Thursday, it’s highest since Nov. 16
AUD/USD: The Australian dollar declined as investors turned cautious ahead of a meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, in Argentina next week to determine whether the economies can de-escalate tensions over trade. The Aussie trades 0.1 percent down at 0.7244, having hit a high of 0.7337 last week; it’s highest since August 29. FxWirePro's Hourly Aussie Strength Index stood at -88.88 (Slightly Bearish) by 0400 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 edged down as investors remain concerned over a possible slowdown in global growth amid policy tightening in the United States and the deteriorating U.S.-China trade war tension. The major trades 0.05 percent down at 0.6810, having touched a high of 0.6883 last week, its highest level since late July. FxWirePro's Hourly Kiwi Strength Index was at -87.22 (Slightly Bearish) by 0400 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 declined, weighed down by losses in Chinese stocks and U.S. - China trade tensions, while sterling steadied on hopes for progress in Brexit negotiations.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2 percent.
Australia's S&P/ASX 200 index rallied 0.5 percent to 5,716.20 points and South Korea's KOSPI plunged 0.9 percent to 2,050.53 points.
Shanghai composite index fell 2.2 percent to 2,587.57 points, while CSI300 index traded 2.0 percent down at 3,150.51 points.
Hong Kong’s Hang Seng traded 0.7 percent lower at 25,853.24 points. Taiwan shares shed 0.5 percent to 9,667.30 points.
Commodities Recap
Crude oil prices slumped to their lowest since early December, weighed down by concerns that producers are pumping out more oil than the world needs. International benchmark Brent crude was trading 0.8 percent down at $61.99 per barrel by 0436 GMT, having hit a low of $61.50, its lowest since Dec. 7. U.S. West Texas Intermediate was trading 0.9 percent down at $53.33 a barrel, after falling as low as $52.80 on Tuesday, its lowest since the end of October 2017.
Gold prices surged, extending gains for the third consecutive session, and was on track for a second straight weekly rise on lingering doubts over the pace of rate hikes by the U.S. Federal Reserve. Spot gold traded 0.1 percent up at $1,228.20 per ounce at 0440 GMT, having hit a high of $1229.93 on Wednesday, its highest since Nov. 7. U.S. gold futures were little changed at $1,226.9 per ounce.
Treasuries Recap
The Australian government bond futures were barely changed, with the three-year bond contract down half a tick at 97.860, while the 10-year contract was flat at 97.330.
The New Zealand government bonds gained, sending yields down about 2.5 basis points at the long end of the curve.
The Canadian government bond prices were lower across much of the yield curve, with the 10-year falling 4 Canadian cents to yield 2.366 percent.
