Market Roundup
- May wins applause from EU leaders for Brexit efforts
- As Republican tax vote nears, more U.S. senators waver
- US House committee questions head of Trump campaign data firm -sources
- US House Speaker Ryan mulls retirement after 2018 elections –Politico
- Moves in S. Korea to make cryptocurrency trading more transparent
- China says war must not be allowed on Korean peninsula
- China Nov FDI (YTD), 9.80%, 1.90% last
- Japan Q 4 Tankan Big Mf Idx, 25, 22 last, f' cast 24
- New Zealand finance minister says "comfortable" with trend in NZ dollar
- New Zealand Nov Manufacturing PMI, 57.7, 57.2 last
- Investors pull most money in 2017 from U.S. stock funds – Lipper
- Foreign CB US debt holdings -5.504 bln to $3.384 trln Dec 13 week
- Treasuries -5.810 bln to $3.04 trln, agencies -163 mln to +$264.15 bln
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- N/A BoE's Carney visits China – Beijing
- N/A Britain's Hammond meets China's Kequaing and Kai (Sat) – Beijing
- N/A ECB's Draghi participates in European Council meeting – Brussels
- N/A European Euro Summit – Brussels
- (0400 ET/0900 GMT) Riksbank's general council meeting – Stockholm
- (0500 ET/1000 GMT) Bank of Latvia's Rimsevics speaks at a conference – Riga
- (0815 ET/1315 GMT) BoE's Haldane will attend a conference – Palmero
FX Beat
DXY: The dollar tumbled, having rebounded from a 1-week low in the previous session after two U.S. Republican senators were reported to have sought changes to the proposed legislation to overhaul the U.S. tax code. The greenback against a basket of currencies traded 0.1 percent down at 93.59, having touched a low of 93.28 the day before, its lowest since Dec. 6. FxWirePro's Hourly Dollar Strength Index stood at -128.90 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro steadied after falling from a 9-day high in the previous session, as the European Central Bank on Thursday raised growth and inflation forecasts for the eurozone, but stuck with its pledge to provide stimulus for as long as needed. The European currency traded 0.1 percent up at 1.1783, having touched a high of 1.1862 the day before, its highest since Dec. 5. FxWirePro's Hourly Euro Strength Index stood at -87.45 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on Eurozone trade balance data, ahead of U.S. industrial production and capacity utilization report. Immediate resistance is located at 1.1817 (21-DMA), a break above targets 1.1862 (Previous Session High). On the downside, support is seen at 1.1761 (Dec. 11 Low), a break below could drag it lower 1.1712 (Nov 21. Low).
USD/JPY: The dollar declined, extending losses for the third straight session, as markets remain wary over the U.S. tax reform bill after two Senate Republicans advised changes to the proposed tax overhaul plan late-Thursday. Moreover, dovish FOMC policy statement continued to undermine the sentiment around the dollar. The major was trading 0.1 percent down at 112.32, having hit a low of 112.06 on Thursday, its lowest since Dec. 6. FxWirePro's Hourly Yen Strength Index stood at 72.99 (Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. industrial production and capacity utilization for further momentum. Immediate resistance is located at 112.79 (10-DMA), a break above targets 113.08 (5-DMA). On the downside, support is seen at 112.06 (Previous Session Low), a break below could take it near 112.73.
GBP/USD: Sterling held firm near a 6-day high touched in the session after the Bank of England stuck to its view that interest rates were likely to rise only gradually despite above-target inflation and progress in Brexit talks. The major traded 0.1 percent up at 1.3438, having hit a high of 1.3465 the day before, it’s highest since Dec. 8. FxWirePro's Hourly Sterling Strength Index stood at -5.32 (Neutral) by 0500 GMT. Investors’ focus will remain the BoE quarterly bulletin and MPC member Haldane speech ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3465, a break above could take it near 1.3520. On the downside, support is seen at 1.3376 (5-DMA), a break below targets 1.3303 (Dec. 12 Low). Against the euro, the pound was trading up at 87.67 pence, having hit a high of 87.60 pence earlier, it’s highest since Dec. 8.
AUD/USD: The Australian dollar consolidated near a 1-month peak touched in the previous session, supported by stronger domestic jobs, consumer confidence data and market expectations for only gradual further rate rises in the United States. The Aussie trades 0.1 percent up at 0.7671, having hit a high of 0.7679 on Thursday; it’s highest since Nov. 10. FxWirePro's Hourly Aussie Strength Index stood at 179.02 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7627 (Previous Session Low), a break below targets 0.7593 (Nov. 27 Low). On the upside, resistance is located at 0.7695, a break above could take it near 0.7730.
NZD/USD: The New Zealand dollar held gains above the 0.7000 handle after the economy's Finance Minister Grant Robertson stated that he was comfortable with the general trend of the Kiwi, which slumped over the past few months after a change of government raised uncertainty over planned policy changes. The Kiwi trades 0.5 percent up at 0.7017, having touched a high of 0.7028 on Wednesday, its highest level since Oct. 20. FxWirePro's Hourly Kiwi Strength Index was at 136.27 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7040, a break above could take it near 0.7085. On the downside, support is seen at 0.6978 (5-DMA), a break below could drag it lower 0.6931 (Dec. 13 Low).
Equities Recap
Asian shares edged up and were on track for weekly gains, while the greenback eased against a basket of currencies on concerns about the progress of U.S. tax reform.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.05 percent and was poised to gain 1.2 percent for the week.
Tokyo's Nikkei declined 0.1 percent to 22,681.44 points, Australia's S&P/ASX 200 index slumped 0.2 percent to 6,000.40 points and South Korea's KOSPI rose 0.5 percent to 2,480.69 points.
Shanghai composite index eased 0.9 percent to 3,264.36 points, while CSI300 index was trading 1.1 percent down at 3,985.13 points.
Hong Kong’s Hang Seng was trading 1.2 percent lower at 28,833.76 points. Taiwan shares shed 0.8 percent to 10,453.85 points.
Commodities Recap
Crude oil prices steadied as the Forties pipeline outage in the North Sea and the ongoing OPEC-led production cuts supported prices. International benchmark Brent crude was trading 0.1 percent down at $63.33 per barrel by 0433 GMT, having hit a high of $65.80 on Tuesday, its highest since Jul. 2015. U.S. West Texas Intermediate was trading 0.1 percent higher at $57.18 a barrel, after rising as high as $58.53 on Tuesday, its highest since Dec. 1.
Gold prices gained after easing from a 1-week high in the previous session and were poised for their first weekly gain in four weeks, as the dollar sagged on concerns about the progress of U.S. tax reform. Spot gold was trading 0.2 percent up at $1,254.66 an ounce by 0434 GMT, after touching its highest since Dec. 7 at $1,258.95 on Thursday. U.S. gold futures edged down 0.1 percent at $1,255.70.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.365 percent higher by 0.02 bps, while 5-year yield was 0.022 bps up at 2.150 percent.
The Japanese government bonds traded nearly flat in subdued trade as investors remained sidelined in any major deal ahead of the upcoming Christmas holidays. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.046 percent, the yield on long-term 40-year remained steady 0.959 percent and the yield on short-term 3-year stood flat at -0.150 percent
The Australian bonds gained as investors bought back bonds sold after the previous session's disappointing 10- year sale. Also, the weakness in the riskier asset supported the bonds prices to rise. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 4-1/2 basis points to 2.525 percent, the yield on the long-term 30-year note dipped 4-1/2 basis points to 3.256 percent and the yield on short-term 2-year declined 3 basis points to 1.893 percent.
The New Zealand government bonds sharply rallied at the time of closing in response to the country’s coalition government downward revision of its economic and fiscal forecasts in its half-yearly update released early Thursday. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 6 basis points to 2.78 percent, the yield on 20-year note plunged 7-1/2 basis points to 3.32 percent while the yield on short-term 2-year ended 1 basis point lower at 1.95 percent.
The Canadian government bond prices were lower across a much flatter yield curve, with the two-year down 12 Canadian cents to yield 1.571 percent and the 10-year declining 16 Canadian cents to yield 1.863 percent. The gap between the 2- and 10-year yields narrowed by 4.7 basis points to a spread of 29.2 basis points, its narrowest since January 2008.
