Market Roundup
- UK, EU agree tentative Brexit deal on financial services- the Times
- Britain says no date set for end of Brexit talks after Raab hints at November deal
- Trump campaigns for Florida Republicans as poll shows Democratic gains
- More U.S. tariffs on China goods not 'set in stone' -White House adviser
- U.S.-China trade battle shows deepening economic impact across Asia
- Pompeo says U.S. trying to convince China 'to behave like a normal nation'
- Germany, France urge China to level business playing field
- China plans more tax cuts to spur consumption -vice finance minister
- Bank of Canada repeats that interest rates will need to keep rising
- Brazil holds rates as far-right victory allays fears of FX sell-off
- Japan Oct Nikkei Mfg PMI, 52.9, 53.1 prev
- China Oct Caixin Mfg PMI Final, 50.1, 49.9 f’cast, 50.0 prev
- Australia Sep Trade Balance G&S (A$), 3,017 mln, 1,700 mln f’cast, 1,604 mln prev, 2,342 mln rvsd
Economic Data Ahead
- (0300 ET/0700 GMT) Great Britain Oct Nationwide house price mm, 0.2% f’cast, 0.3% prev
- (0300 ET/0700 GMT) Great Britain Oct Nationwide house price yy, 1.9% f’cast, 2.0% prev
- (0530 ET/0930 GMT) Great Britain Oct Markit/CIPS Mfg PMI, 53.0 f’cast, 53.8 prev
- (0800 ET/1200 GMT) Great Britain Nov BOE Bank Rate, 0.75% f’cast, 0.75% prev
- (0800 ET/1200 GMT) Great Britain Nov GB BOE QE Gilts, 435 bln f’cast, 435 prev
Key Events Ahead
- (0505 ET/0905 GMT) Norway Central Bank Deputy Governor Jon Nicolaisen gives a speech at Finance Norway's payments conference in Fornebu, Norway
- (0630 ET/1030 GMT) Norway Central Bank Governor Oystein Olsen gives a speech to Bergen Chamber of Commerce and Industry in Bergen, Norway
- (0800 ET/1200 GMT) Bank of England announces rate decision and publishes the minutes of the meeting, after the rate decision in London
- (0800 ET/1200 GMT) Bank of England to release Inflation Report in London
- (1010 ET/1410 GMT) Fed New York Executive Vice President Kevin Stiroh speaks at Financial Times U.S. Banking Forum in New York
- (1115 ET/1515 GMT) Swiss National Bank (SNB) Executive Board member Fritz Zurbrügg speaks at the NZZ conference in Interlaken, Switzerland
- (1300 ET/1700 GMT) Bank of Canada Deputy Governor Carolyn A. Wilkins gives speech at McGill University Montreal
- (1330 ET/1730 GMT) Bank of Canada Deputy Governor Lawrence Schembri gives introductory remarks at the John Kuszczak Memorial Lecture in Ottawa
- (1500 ET/1900 GMT) Bank of Canada Deputy Governor Timothy Lane moderates a panel discussion on Revisiting the Merits of the Inflation Targeting Policy Framework and its Alternatives in Ottawa
FX Beat
DXY: The dollar index eased, after rallying to a 16-month peak in the previous session on the ADP national employment report that showed U.S. private-sector payrolls increased by the most in eight months in October, reinforcing expectations for continued rate increases by the Federal Reserve. The greenback against a basket of currencies trades 0.3 percent up at 96.86, having touched a high of 97.20, its highest since June 26. FxWirePro's Hourly Dollar Strength Index stood at 29.25 (Neutral) by 0500 GMT.
EUR/USD: The euro rebounded after falling to a 2-1/2 month low in the previous session on weak eurozone economic data as well as Italian budget worries. The European currency traded 0.3 percent up at 1.1342, having touched a low of 1.1302, its lowest since August 15. FxWirePro's Hourly Euro Strength Index stood at -65.18 (Neutral) by 0500 GMT. Investors’ attention will remain on the U.S. unemployment benefit claims, prelim nonfarm productivity, manufacturing PMI from both Markit and ISM and construction spending. Immediate resistance is located at 1.1387 (October 30 High), a break above targets 1.1432 (October 25 High). On the downside, support is seen at 1.1264., a break below could drag it till 1.1219.
USD/JPY: The Japanese yen surged, extending previous session rebound after data showed Japanese manufacturing activity expanded at the fastest rate in four months in October as new export orders returned to growth. The major was trading 0.05 percent down at 112.89, having hit a high of 113.38 on Wednesday, its highest since October 9. FxWirePro's Hourly Yen Strength Index stood at -75.59 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, prelim nonfarm productivity, manufacturing PMI from both Markit and ISM and construction spending. Immediate resistance is located at 113.71 (September 28 High), a break above targets 114.10 (October 5 High). On the downside, support is seen at 112.35 (October 22 Low), a break below could take it lower 112.01 (October 17 Low).
GBP/USD: Sterling rallied to a 1-week peak on a report that UK Prime Minister Theresa May has secured a deal with Brussels on financial services. Investors now await the Bank of England monetary policy meeting outcome later in the day, where it is expected to keep interest rates steady and detail conditions necessary for policy tightening. The major traded 0.7 percent up at 1.2851, having hit a low of 1.2695 on Tuesday; it’s lowest since August 16. FxWirePro's Hourly Sterling Strength Index stood at 18.94 (Neutral) 0500 GMT. Investors attention will remain on UK nationalwide housing prices, Markit manufacturing PMI, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2901 (August 27 High), a break above could take it near 1.2962 (September 6 High). On the downside, support is seen at 1.2700, a break below targets 1.2664. Against the euro, the pound was trading 0.4 percent up at 88.29 pence, having hit a high of 88.13, it’s highest since October 23.
AUD/USD: The Australian dollar rose to a 2-week peak after data showed domestic trade surplus surged to a near two-year peak in September, boosted by a jump in resource exports. The Aussie trades 0.7 percent up at 0.7122, having hit a high of 0.7133 earlier; it’s highest since October 19. FxWirePro's Hourly Aussie Strength Index stood at 86.60 (Slightly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7055 (October 23 Low), a break below targets 0.7021 (October 4 Low). On the upside, resistance is located at 0.7159 (October 17 High)., a break above could take it near 0.7200.
NZD/USD: The New Zealand dollar advanced to an over 1-week peak, boosted by better-than-expected Chinese manufacturing PMI and weakness in the greenback. The Kiwi trades 1.01 percent up at 0.6582, having touched a high of 0.6586, its highest level since October 22. FxWirePro's Hourly Kiwi Strength Index was at 155.80 (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 0.6628 (October 1 High), a break above could take it near 0.6696 (September 26 High). On the downside, support is seen at 0.6502 (October 25 Low), a break below could drag it below 6465 (October 26 Low).
Equities Recap
Asian shares surged, boosted by another robust Wall Street session, while Aussie rallied on the back of better-than-expected trade surplus.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.9 percent.
Tokyo's Nikkei fell 1.1 percent to 21,687.65 points, Australia's S&P/ASX 200 index rallied 0.2 percent to 5,840.80 points and South Korea's KOSPI declined 0.2 percent to 2,026.37 points.
Shanghai composite index rose 0.1 percent to 2,606.22 points, while CSI300 index traded 0.7 percent up at 3,176.00 points.
Hong Kong’s Hang Seng traded 1.6 percent higher at 25,377.65 points. Taiwan shares added 0.4 percent to 9,844.74 points.
Commodities Recap
Crude oil prices declined, amid signs of rising supply and growing concerns that demand might weaken on the prospect of a global economic slowdown. International benchmark Brent crude was trading 0.05 percent down at $74.58 per barrel by 0436 GMT, having hit a low of $74.57 earlier, its lowest since August 23. U.S. West Texas Intermediate was trading 0.1 percent up at $64.91 a barrel, after falling as low as $64.83 on Wednesday, its lowest since August 16.
Gold prices surged, recovering from a 3-week low hit in the previous session as the U.S. dollar retreated from multi-month peaks. Spot gold up 0.3 percent at $1,218.02 an ounce by 0512 GMT, having touched a low of $1,211.87 on Wednesday, its lowest since Oct. 11. U.S. gold futures rose 0.2 percent to $1,217.8 an ounce.
Treasuries Recap
The Japanese government bonds slumped after the U.S. 10-year treasury yield rose slightly for the third consecutive day overnight. Investor sentiment improved overnight, resulting in a rebound in global share markets and a lift in U.S. bond yields. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 13 basis points to 0.128 percent, the yield on the long-term 30-year note traded 2-1/2 basis points higher at 0.895 percent and the yield on short-term 3-year traded 1 basis point up at -0.104 percent.
The Australian government bonds slumped across the curve during Asian session as investors’ moved from safe-haven buying after the country's trade surplus jumped to a near 2-year high in September. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 4 basis points to 2.656 percent, the yield on the long-term 30-year bond also jumped 4 basis points to 3.146 percent and the yield on short-term 2-year climbed 3-1/2 basis points to 2.011 percent.
The Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 4.5 Canadian cents to yield 2.338 percent and the 10-year declined 33 Canadian cents to yield 2.494 percent. The 2-year yield touched its highest intraday since Oct. 4 at 2.343 percent.
