Market Roundup
- Oil steadies on fresh hopes for U.S.-China trade talks
- Gold prices touched their lowest in a week
- Brexit promise support sterling
Economic Data Ahead
- (0400 ET/0900 GMT) German IFO Business Survey
- (0400 ET/0900 GMT) German IFO Business Survey
- (0400 ET/0900 GMT) German IFO Business Survey
- (0600 ET/1100 GMT) UK CBI Distributive Trades Survey
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index held firm near a 1-1/2 week peak as Friday's better-than-expected U.S. manufacturing data eased the need for an interest rate cut. The greenback against a basket of currencies traded flat at 98.24, having touched a high of 98.31 on Friday, its highest since November 14.
EUR/USD: The euro steadied after falling to a 1-week low in the previous session on data that showed euro zone business growth slowed this month as a downturn in the manufacturing industry appears to be increasingly affecting the bloc’s services industry. The European currency traded 0.1 percent up at 1.1026, having touched a low of 1.1014 on Friday, its lowest since November 15. Investors’ attention will remain on German IFO survey, ahead of the U.S. Chicago Fed National Activity Index and Dalls Fed Manufacturing Business Index. Immediate resistance is located at 1.1059 (5-DMA), a break above targets 1.1091. On the downside, support is seen at 1.1002, a break below could drag it below 1.0966.
USD/JPY: The dollar surged to a 1-week peak on broadly upbeat headlines about U.S.-China trade talks. On Friday, Chinese President Xi Jinping said that he wants to reach an agreement, while U.S. President Donald Trump said progress was going well. The major was trading 0.2 percent up at 108.63, having hit a low of 108.27 on Thursday, its lowest since November 14. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. Chicago Fed National Activity Index and Dallas Fed Manufacturing Business Index. Immediate resistance is located at 109.03, a break above targets 109.25 (November 5 High). On the downside, support is seen at 108.36, a break below could take it near at 108.03.
GBP/USD: Sterling rebounded from a 1-1/2 week low on hopes of an imminent Brexit and an end to years of political uncertainty. British Prime Minister Boris Johnson, whose Conservative Party leads in opinion polls ahead of the December 12 election, promised to bring a deal to leave the European Union to parliament before Christmas. The major traded at 0.1 percent up 1.2846, having hit a low of 1.2829 on Friday, it’s lowest since November 13. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2906 (5-DMA), a break above could take it near 1.2942. On the downside, support is seen at 1.2815, a break below targets 1.2768. Against the euro, the pound was trading flat at 85.80 pence, having hit a low of 86.05 on Friday, it’s lowest since Nov. 12.
AUD/USD: The Australian dollar rose, halting a 3-day losing streak, as positive signs for the U.S. economy and upbeat headlines on U.S.-China trade talks boosted investor confidence. The Aussie trades 0.2 percent up at 0.6794, having hit a low of 0.6780 on Friday, it’s lowest since November 14. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6769, a break below targets 0.6742. On the upside, resistance is located at 0.6818 (10-DMA), a break above could take it near 0.6846 (21-DMA).
NZD/USD: The New Zealand dollar gained after U.S. national security adviser Robert O’Brien said an initial trade agreement with China is still possible by the end of the year. The Kiwi trades 0.3 percent up at 0.6420, having touched a high of 0.6437 on Thursday, its highest level since November 4. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6449, a break above could take it near 0.6465. On the downside, support is seen at 0.6393 (10-DMA), a break below could drag it below 0.6360.
Equities Recap
Asian shares rallied amid hope for some progress in the endless U.S.-China trade dispute.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.8 percent.
Tokyo's Nikkei rose 0.8 percent to 23,292.81 points, Australia's S&P/ASX 200 index gained 0.3 percent to 6,731.40 points and South Korea's KOSPI rallied 1.02 percent to 2,123.50 points.
Shanghai composite index rose 0.7 percent to 2,904.04 points, while CSI 300 index traded 0.7 percent up at 3,875.14 points.
Hong Kong’s Hang Seng traded 1.6 percent higher at 27,018.88 points. Taiwan shares shed 0.05 percent to 11,561.58 points
Commodities Recap
Crude oil prices consolidated after rising to multi-week in the previous session as positive news from Washington over the weekend rekindled optimism in global markets that the United States and China could soon sign a deal to end their trade war. International benchmark Brent crude was trading flat at $63.48 per barrel by 0520 GMT, having hit a high of $64.25 earlier, its highest since September 24. U.S. West Texas Intermediate was trading 0.1 percent lower at $57.81 a barrel, after rising as high as $58.71 on Friday, its highest since September 23.
Gold prices plunged to a 1-week low as positive developments towards an interim trade deal between the United States and China lifted demand for riskier assets. Spot gold was trading down 0.1 percent at $1,460.69 per ounce by 0538 GMT, having touched a low of $1460.69 earlier, its lowest since Nov. 18. U.S. gold futures inched 0.2 percent lower to $1,460.60.
Treasuries Recap
The prices for most Japanese government bonds rose after the Bank of Japan conducted regular buying operations for monetary policy. The Benchmark 10-year JGB futures rose 0.13 point to 153.29. The 10-year JGB yield fell 1 basis point to minus 0.095 percent, while the 20-year JGB yield fell 0.5 basis point to 0.270 percent. The two-year JGB yield fell 1 basis point to minus 0.200 percent. At the super-long end of the yield curve, the 30-year JGB yield rose 1 basis point to 0.435 percent, while the 40-year JGB yield rose 1 basis point to 0.465percent.
