Market Roundup
- China Nov NBS Manufacturing PMI 51.8, 51.6 last, forecast 51.4
- Britain nears deal with EU in Irish border Brexit talks -The Times
- BoE's Carney sees changes to UK financial rules after Brexit
- UK consumer sentiment sinks to 16-month low, business mixed
- Brexit supporters say PM May selling UK short over divorce bill
- Yellen: Recovery "increasingly broad-based" in both U.S. and worldwide
- Fed's Williams sees four rate hikes between now and end of 2018
- Amid bitcoin surge, Dudley says offering digital currency on Fed's radar
- Trump nominates Marvin Goodfriend for Fed governor post
- U.S. Senate takes step toward passage of tax bill, vote likely this week
- U.S. warns North Korean leadership will be 'utterly destroyed' in case of war
- BoJ PB Harada – No reason for BoJ to end easy policy now, good for the economy.
- Japan Oct Housing Starts YY, -3.1, -2.9% last, -3.1% forecast
- New Zealand business confidence sinks to eight-year low on jitters towards new government
- New Zealand Q3 Capital Expenditure 1%, 0.8% last, forecast 1%, revised 1.1%
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Oct Retail Sales m/m, y/y, forecast 0.3%, 2.8%, 0.5%, 4.1% last
- (0200 ET/0700 GMT) Great Britain Nov Nationwide house price mm, yy, forecast 0.2%, 2.7%, 0.2%, 2.5% last
- (0245 ET/0745 GMT) France Nov CPI (EU Norm) Prelim YY, forecast 1.3%, 1.2% last
- (0400 ET/0900 GMT) Germany Nov Unemployment Chg SA, forecast -10k, -11k last
- (0500 ET/1000 GMT) EZ Nov Inflation, Flash YY, forecast 1.6%, 1.4% last
- (0500 ET/1000 GMT) EZ Nov Infl Ex Food & Enr Flash, forecast 1.0%, 1.1% last
- (0500 ET/1000 GMT) EZ Oct Unemployment Rate, forecast 8.9%, 8.9% last
Key Events Ahead
- (0300 ET/0800 GMT) ECB's Yves Mersch to give introductory speech at joint ECB/Banca d'Italia conference - Rome
- (0345 ET/0845 GMT) ECB's Yves Mersch is part of the chairing panel at joint ECB/Banca d’Italia conference - Rome
- (0500 ET/1000 GMT) ECB's Peter Praet delivers the Ludwig Erhard Lecture, organized by the Lisbon Council - Brussels
- (0640 ET/1140 GMT) ECB's Pentti Hakkarainen speaks at Financial Times Banking Summit 2017 - London
- (0830 ET/1330 GMT) Fed's Mester to chair panel before the Financial Stability and Fintech Conference – Washington
- (1230 ET/1730 GMT) Fed's Randal Quarles speaks before the Financial Stability and Fintech Conference - Washington
- (1230 ET/1730 GMT) Eurogroup President Jeroen Dijsselbloem and Central Bank of Luxembourg Governor Gaston Reinesch attend a conference - Luxembourg
- (1300 ET/1800 GMT) Fed's Dallas President Robert Kaplan participates in a moderated question-and-answer session before the Real Estate Council Speaking Series - Dallas
- (2030 ET/0130 GMT) Speech by Bank of Japan board member Yutaka Harada at a meeting with business leaders - Fukushima
FX Beat
DXY: The dollar index eased after rising for three straight sessions, as investors cautiously watched the progress of the U.S. tax reform legislation. The greenback against a basket of currencies traded 0.1 percent down at 93.18, having touched a high of 93.44 in the prior session, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at 107.41 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro rose, extending previous session gains amid renewed weakness seen in the U.S. dollar across the board. On Wednesday, the major slumped to a 6-day low after the U.S. Q3 GDP figures bettered estimates, while the Fed’s Beige book revealed that the price pressures had strengthened since the last report. The European currency traded 0.1 percent up at 1.1862, having touched a low of 1.1817 the day before, its lowest since Nov. 23. FxWirePro's Hourly Euro Strength Index stood at 21.04 (Neutral) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies and Eurozone consumer price index, ahead of U.S. personal consumption expenditures prices, unemployment benefits, personal spending and income figures. Immediate resistance is located at 1.1919 (Nov. 28 High), a break above targets 1.2000. On the downside, support is seen at 1.1821 (10-DMA), a break below could drag it lower 1.1800.
USD/JPY: The dollar rose to a 1-week high, boosted by data that showed the U.S. economy grew faster than initially thought in the third quarter, recording its quickest pace in three years. The major was trading 0.2 percent up at 112.14, having hit a high of 112.20 earlier, its highest since Nov. 22. FxWirePro's Hourly Yen Strength Index stood at -78.08 (Slightly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. personal consumption expenditures prices, unemployment benefits, personal spending and income figures for further momentum. Immediate resistance is located at 112.33 (61.8% retracement of 114.73 and 110.84), a break above targets 112.82 (21-DMA). On the downside, support is seen at 111.43 (5-DMA), a break below could take it near 110.84 (Nov. 27 Low).
GBP/USD: Sterling rallied to more than 2-month highs as investors seem convinced that a Brexit deal could be reached. Britain would be willing to pay around 50 billion euros to unblock stalled Brexit talks with the European Union, according to media reports on Wednesday. Sterling traded 0.5 percent up at 1.3477, having hit a high of 1.3479, it’s highest since Sept. 26. FxWirePro's Hourly Sterling Strength Index stood at 101.58 (Highly Bullish) by 0400 GMT. Investors’ focus will remain on developments surrounding Brexit deal, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3500, a break above could take it near 1.3551. On the downside, support is seen at 1.3380, a break below targets 1.3291 (10-DMA). Against the euro, the pound was trading 0.3 percent up at 88.06 pence, having hit a high of 88.02 pence earlier in the session, it’s highest since Nov. 8.
AUD/USD: The Australian dollar rebounded after falling to a 1-week low in the previous session, following the release of stronger-than-expected domestic economic data and from top trading partner China. The economy's business investment hit its highest in more than a year last quarter while approvals to build homes climbed to the strongest in eight months, indicating signs for a pick-up in broader economic activity. The Aussie trades 0.3 percent up at 0.7589, having hit a low of 0.7552 on Wednesday; it’s lowest since Nov. 21. FxWirePro's Hourly Aussie Strength Index stood at -9.72 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7552 (Previous Session Low), a break below targets 0.7532 (Nov. 21 Low). On the upside, resistance is located at 0.7624 (21-DMA), a break above could take it near 0.7665 (Nov. 13 High).
NZD/USD: The New Zealand dollar tumbled to a 1-week low after a survey of business sentiment plummeted to an eight-year low in November as firms worried about a change of government. Meanwhile, separate data showed residential consents in October eased a surprisingly sharp 9.6 percent from a year earlier. The Kiwi trades 0.5 percent down at 0.6847, having touched a low of 0.6832 earlier, its lowest level since Nov. 22. FxWirePro's Hourly Kiwi Strength Index was at -120.63 (Highly Bearish) by 0500 GMT. Investors’ will continue to digest downbeat domestic data, ahead of U.S. economic data. Immediate resistance is located at 0.6909, a break above could take it near 0.6960. On the downside, support is seen at 0.6832 (Session Low), a break below could drag it lower 0.6800.
Equities Recap
Asian shares slumped, weighed down by a plunge in technology shares, while sterling rallied to more than two-month highs on hopes that a Brexit accord could be reached.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.9 percent.
Tokyo's Nikkei rose 0.5 percent to 22,705.64 points, Australia's S&P/ASX 200 index eased 0.7 percent to 5,969.90 points and South Korea's KOSPI declined 0.8 percent to 2,491.13 points.
Shanghai composite index fell 0.4 percent to 3,323.11 points, while CSI300 index was trading 0.8 percent down at 4,021.30 points.
Hong Kong’s Hang Seng was trading 1.3 percent lower at 29,234.22 points. Taiwan shares shed 1.4 percent to 10,560.44 points.
Commodities Recap
Crude oil prices declined by more than 1 percent as investors turned cautious ahead of an OPEC meeting in Vienna later in the day, with oil producers set to debate extension of the supply-cut agreement. International benchmark Brent crude was trading 1.1 percent down at $62.70 per barrel by 0438 GMT, having hit a high of $64.05 the day before, its highest since Nov. 10. U.S. West Texas Intermediate was trading 0.1 percent higher at $57.41 a barrel, after falling as low as $56.74 on Thursday, its lowest since Nov. 21.
Gold prices steadied after slumping to a one-week low in the previous session, as the dollar firmed amid upbeat U.S. growth data. Spot gold rose 0.1 percent at $1,284.14 an ounce at 0446 GMT, having touched a low of $1,281.94 on Wednesday, its lowest since Nov. 22, however, it was set for its first monthly gain since August, having risen about 1 percent for the month. U.S. gold futures were up 0.1 percent at $1,283.10.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.388 percent higher by 0.012 bps, while 5-year yield was 0.016 bps up at 2.109 percent.
The Australian government bond futures slipped, with the three-year bond contract down 3 ticks at 98.080. The 10-year contract fell 4 ticks to 97.4750. The spread between Aussie and U.S. 10-year bonds shrank to the smallest since 1998 at 13 basis points.
The New Zealand government bonds were mixed, with yields about 1.5 basis points higher at the long end and 1 basis point lower at short-end of the curve
The Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 2 Canadian cents to yield 1.430 percent and the 10-year declined 25 Canadian cents to yield 1.871 percent. The gap between the 10-year yield and its U.S. counterpart widened by 1.1 basis points to a spread of -50.5 basis points, its widest since July 11.
