Market Roundup
- Irish border row thwarts May bid to clinch Brexit trade deal
- Great Britain Nov BRC Retail Sales y/y, 0.60%, -1.00% last
- German SPD to start talks with Merkel next week if members agree
- US top court lets Trump's latest travel ban go into full effect
- US Congress moves closer to final tax bill with House vote
- RBNZ says may ease policy if inflation does not pick up from late 2018
- RBA holds rates as expected
- Australia Oct Retail Sales m/m, 0.5%, 0.0% last, 0.3% f' cast, 0.1% rvsd
- Australia Q3 Current Account Balance -9.10 bln, -9.60 bln last, -9.20 bln f' cast, -9.70 bln rvsd
- Australia Q3 Net Exports Contribution 0.00%, 0.30 last, 0.25% f' cast
- China Nov Caixin Services PMI 51.9, 51.2 last
- China launches new government yield curve benchmark
- Japan Nov services PMI 51.2, composite PMI 52.2, Oct both 53.4
Economic Data Ahead
- (0350 ET/0850 GMT) France Nov Markit Serv PMI f' cast 60.2, 60.2 last
- (0350 ET/0850 GMT) France Nov Markit Comp PMI f' cast 60.1, 60.1 last
- (0355 ET/0855 GMT) Germany Nov Markit Services PMI f' cast 54.9, 54.9 last
- (0355 ET/0855 GMT) Germany Nov Markit Comp Final PMI f' cast 57.6, 57.6 last
- (0400 ET/0900 GMT) EZ Nov Markit Serv Final PMI f' cast 56.2, 56.2 last
- (0400 ET/0900 GMT) EZ Nov Markit Comp Final PMI f' cast 57.5, 57.5 last
- (0430 ET/0930 GMT) Great Britain Nov Markit/CIPS Serv PMI f' cast 55.0, 55.6 last
- (0430 ET/0930 GMT) EZ Oct Retail Sales m/m, y/y, f' cast -0.7%, 1.5%, 0.7%, 3.7% last
Key Events Ahead
- N/A ECB's Constancio participates in a meeting – Brussels
- N/A EU Economic and Financial Affairs meeting – Brussels
- (0430 ET/0930 GMT) Record of financial policy meeting held on Nov 22 – London
- (0900 ET/1400 GMT) Riksbank's Stefan will speak at a conference – Stockholm
- (1000 ET/1500 GMT) Senate banking committee vote meeting for Fed chair – Washington
FX Beat
DXY: The dollar index slightly eased on concerns about the ongoing investigation into contacts between Trump's election campaign and Russia. The greenback against a basket of currencies traded down at 93.10, having touched a high of 93.51 on Thursday, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at -10.43 (Neutral) by 0500 GMT.
EUR/USD: The euro gained as the dollar slightly edged down as investors waited to see how the next step of the U.S. tax reform legislation proceeds. The European currency traded 0.05 percent up at 1.1870, having touched a high of 1.1940 on Friday, its highest since Nov. 27. FxWirePro's Hourly Euro Strength Index stood at 70.42 (Bullish) by 0400 GMT. Investors’ attention will remain on Eurozone Markit Service PMI, ahead of U.S. trade balance, and Service PMI from both Markit and ISM. Immediate resistance is located at 1.1920 (Nov. 28 High), a break above targets 1.2000. On the downside, support is seen at 1.1836 (Nov. 24 Low), a break below could drag it lower 1.1808 (Nov 30 Low).
USD/JPY: The dollar steadied after falling for two consecutive sessions, after the House of Representatives voted late on Monday to set up formal negotiations with the Senate, bringing the final bill a step closer. The major was trading 0.1 percent up at 112.54, having hit a high of 113.08 the day before, its highest since Nov. 17. FxWirePro's Hourly Yen Strength Index stood at -112.25 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. trade balance, and Service PMI from both Markit and ISM for further momentum. Immediate resistance is located at 113.25 (38.2% retracement of 114.73 and 110.84), a break above targets 113.51 (23.6% retracement). On the downside, support is seen at 112.09 (5-DMA), a break below could take it near 111.78.
GBP/USD: Sterling eased against the dollar and the euro after European Commission President Jean-Claude Juncker and British Prime Minister Theresa May failed to reach an agreement on a divorce deal. Juncker stated that despite significant progress during May’s visit to Brussels, two or three issues remained open and it was not possible to reach a complete agreement. Sterling traded 0.1 percent down at 1.3468, having hit a high of 1.3549 on Friday, it’s highest since Sept. 25. FxWirePro's Hourly Sterling Strength Index stood at 32.60 (Neutral) by 0500 GMT. Investors’ focus will remain on developments surrounding Brexit deal and UK services PMI, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3550, a break above could take it near 1.3600. On the downside, support is seen at 1.3413 (Previous Session Low), a break below targets 1.3374 (10-DMA). Against the euro, the pound was trading 0.1 percent down at 88.13 pence, having hit a high of 87.76 pence on Thursday, it’s highest since Nov. 2.
AUD/USD: The Australian dollar rallied to a three-week high following strong economic data and a rally in the price of iron ore. The economy's retail sales rose 0.5 percent in October, surpassing expectations for a 0.3 percent gain, while separate data from the Australian Bureau of Statistics showed the country's A$1.7 trillion economy likely accelerated at 3 percent annual growth last quarter. The Aussie trades 0.7 percent up at 0.7649, having hit a high of 0.7653 earlier; it’s highest since Nov. 13. FxWirePro's Hourly Aussie Strength Index stood at 144.49 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7579 (Previous Session Low), a break below targets 0.7532 (Nov. 21 Low). On the upside, resistance is located at 0.7665 (Nov. 13 High), a break above could take it near 0.7700.
NZD/USD: The New Zealand dollar rose above the 0.6900 handle after Reserve Bank of New Zealand governor Grant Spencer state that the central bank adopted a flexible approach to inflation targeting as it struggled with low global price growth. The Kiwi trades 0.5 percent up at 0.6893, having touched a low of 0.6816 on Friday, its lowest level since Nov. 21. FxWirePro's Hourly Kiwi Strength Index was at 80.29 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6925, a break above could take it near 0.6945. On the downside, support is seen at 0.6839 (Previous Session Low), a break below could drag it lower 0.6816 (Dec. 1 Low).
Equities Recap
Asian shares traded in a subdued market, weighed down by technology stocks, while dollar stalled against a basket of currencies as investors awaited the next steps over U.S. tax reform.
MSCI's broadest index of Asia-Pacific shares outside Japan traded within a narrow range.
Tokyo's Nikkei eased 0.4 percent to 22,622.38 points, Australia's S&P/ASX 200 index declined 0.3 percent to 5,971.80 points and South Korea's KOSPI rallied 0.2 percent to 2,507.76 points.
Shanghai composite index fell 0.2 percent to 3,303.78 points, while CSI300 index was trading 0.6 percent up at 4,041.32 points.
Hong Kong’s Hang Seng was trading 0.6 percent lower at 28,989.21 points. Taiwan shares shed 0.8 percent to 10,566.85 points.
Commodities Recap
Oil prices declined ahead of U.S. crude inventories data, as the market weighed the impact of rising U.S. crude output. International benchmark Brent crude was trading 0.2 percent down at $62.32 per barrel, having hit a high of $64.30 on Friday, its highest since Nov. 8. U.S. West Texas Intermediate was trading 0.1 percent lower at $57.39 a barrel, after rising as high as $58.86 on Friday, its highest since Nov. 27.
Gold prices traded within a tight range, supported by a slightly weaker dollar as investors awaited the next steps over U.S. tax reform legislation for clues. Spot gold was nearly flat at $1,275.72 an ounce, having shed 0.3 percent in the previous session. U.S. gold futures were steady at $1,277.90.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.390 percent higher by 0.027 bps, while 5-year yield was 0.04 bps up at 2.157 percent.
The Australian government bond futures slipped, with the three-year bond contract down 5.5 ticks at 97.980. The 10-year contract eased 5 ticks to 97.39.
