Market Roundup
- Britain won't offer a new figure on Brexit bill to unlock talks – minister
- Forty UK Tory lawmakers ready to oust May - Sunday Times
- Outlook for UK pay growth improves, but only a little - CIPD
- UK shoppers cut spending by most in more than 4 years - Visa
- Harker eyes inflation, stands by Fed rate hike next month
- Gala glitz masks Asia's tensions as Trump winds up tour
- U.S. House will reject total elimination of state and local tax deductions -Brady
- Japan Oct Corp Goods Price m/m, y/y, 0.3%, 3.4% vs 0.2%, 3.0%, f'cast 0.1%, 3.1%
- BoJ Nakata – Fed policies won’t have direct linkage to BoJ steps.
- Tokyo eyes tax cuts to emerge as Asia’s top financial hub - Nikkei
- Japan’s cash-rich companies to spend more on M&A, not wages – Rtrs poll
- RBA's Debelle: no shock on horizon that could force RBA to materially raise rates
- Spanish PM, in Catalonia, calls for big turnout at December election
- Merkel urges compromises as coalition talks enter final stretch
Economic Data Ahead
- No significant economic data releases
Key Events Ahead
- N/A - BoJ's Kuroda speaks in Switzerland
- (0300 ET/0800 GMT) EU Foreign Affairs Council meeting - Brussels
- (0400 ET/0900 GMT) ECB's Constancio speaks at Euro finance Week - Frankfurt
- (0130 ET/1630 GMT) France's Le Maire speaks at a conference – Paris
FX Beat
DXY: The dollar index rose, rebounding from 2-week lows hit in the previous session following a spike in U.S. Treasury yields. The greenback against a basket of currencies traded 0.1 percent up at 94.51, having touched a high of 95.15 on Tuesday, its highest since Oct. 27. FxWirePro's Hourly Dollar Strength Index stood at -43.38 (Neutral) by 0500 GMT.
EUR/USD: The euro eased, halting its 3-day winning streak, as the greenback rebounded after the U.S. 10-year Treasury yield rose more than 6 basis points to 2.4 percent. The European currency traded 0.1 percent down at 1.1653, having touched a high of 1.1677; its highest since Nov. 3. FxWirePro's Hourly Euro Strength Index stood at 133.71 (Highly Bullish) by 0400 GMT. Investors’ attention will remain on the U.S. monthly budget statement, amid a lack of data for the Eurozone. Immediate resistance is located at 1.1707 (50.0% retracement of 1.1837 and 1.1674), a break above targets 1.1737 (38.2% retracement). On the downside, support is seen at 1.1619 (5-DMA), a break below could drag it lower 1.1580 (Nov. 6 Low).
USD/JPY: The dollar rose, extending previous session gains, following a 6 basis points rise by long-term U.S. Treasury yields on Friday. The major was trading 0.2 percent up at 113.68, having hit a low of 113.09 on Thursday, its lowest since Oct. 31. FxWirePro's Hourly Yen Strength Index stood at -6.18 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. monthly budget statement for further momentum. Immediate resistance is located at 113.80, a break above targets 114.40. On the downside, support is seen at 113.20, a break below could take it near 112.80.
GBP/USD: Sterling slumped, reversing almost all of its previous session gains, as troubles mounted for British Prime Minister May, with a report that 40 Conservative MPs are readying a leadership challenge. The major traded 0.5 percent down at 1.3123, having hit a low of 1.3039 on Friday, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at -122.13 (Highly Bearish) by 0400 GMT. Investors’ focus will remain on political developments, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3180 (21-DMA), a break above could take it near 1.3227. On the downside, support is seen at 1.3108 (Nov. 7 Low), a break below targets 1.3078. Against the euro, the pound was trading 0.4 percent down at 88.60 pence, having hit a low of 88.89 pence earlier, its lowest since Nov. 3.
AUD/USD: The Australian dollar recovered early session losses, after the Deputy Governor of the RBA Guy Debelle on Sunday stated that rate hike likely to come from a good economy and not a shock. The Aussie trades 0.05 percent up at 0.7660, having hit a low of 0.7638 on Tuesday; it’s lowest since Oct. 27. FxWirePro's Hourly Aussie Strength Index stood at 28.34 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7627 (Nov. 7 Low), a break below targets 0.7600. On the upside, resistance is located at 0.7725 (61.8% retracement of 0.7883 and 0.7625), a break above could take it near 0.7755 (50% retracement).
NZD/USD: The New Zealand dollar slightly edged up, after falling for two consecutive sessions, amid persisting risk-off sentiment across the financial markets on the back of the renewed troubles around the US and UK political environment. The Kiwi trades 0.1 percent up at 0.6931, having touched a high of 0.6979 on Thursday, its highest level since Oct. 24. FxWirePro's Hourly Kiwi Strength Index was at -129.20 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7013 (50.0% retracement of 0.7206 and 0.6818), a break above could take it near 0.7059 (38.2% retracement of 0.7206 and 0.6818). On the downside, support is seen at 0.6900, a break below could drag it till 0.6820.
Equities Recap
Asian shares declined, as investors waited to see whether U.S. Republicans can pass a tax reform deal quickly, while the British pound slumped on growing doubts over Prime Minister Theresa May's leadership.
MSCI's broadest index of Asia-Pacific shares outside Japan tumbled 0.4 percent.
Tokyo's Nikkei fell 0.7 percent to 22,532.10 points, Australia's S&P/ASX 200 index slumped 0.1 percent to 6,021.80 points and South Korea's KOSPI declined 0.3 percent to 2,534.82 points.
Shanghai composite index rose 0.4 percent to 3,444.53 points, while CSI300 index was trading 0.4 percent up at 4,128.09 points.
Hong Kong’s Hang Seng was trading 0.3 percent higher at 29,201.80 points. Taiwan shares shed 0.5 percent to 10,683.92 points.
Commodities Recap
Crude oil prices consolidated within ranges, as investors traded cautiously amid ongoing tensions in the Middle East and after a rising rig count in the United States indicated producers there are preparing to increase output. International benchmark Brent crude was trading 0.1 percent down at $63.54 per barrel by 0422 GMT, having hit a high of $64.62 on Tuesday, its highest since June 2015. U.S. West Texas Intermediate was trading 0.1 percent down at $56.79 a barrel, after rising as high as $57.67 on Tuesday, its highest since Jun. 2015.
Gold prices edged higher after recording its biggest one-day percentage loss in about two weeks in the previous session on a firmer U.S. dollar. Spot gold was 0.1 percent up at $1,275.55 per ounce at 0425 GMT, having dropped 0.7 percent for its biggest one-day percentage fall since Oct. 26 on Friday. U.S. gold futures for December delivery gained 0.1 percent to $1,275.40.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.385 percent lower by 0.014 bps, while 5-year yield was 0.007 bps down at 2.048 percent.
The Japanese bonds slumped following higher-than-expected producer inflation data for October. In addition, markets will now focus on the upcoming third-quarter gross domestic product (GDP) data. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 0.051 percent, the yield on long-term 40-year climbed 2 basis points to 0.984 percent and the yield on short-term 2-year up over 1 basis point to -0.167 percent.
The Australian bonds yields moved a tad higher on following an optimistic speech from the Reserve Bank of Australia Deputy Governor Guy Debelle. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis point to 2.629 percent, the yield on the long-term 30-year note jumped 1 basis point to 3.406 percent and the yield on short-term 2-year climbed 1/2 basis point to 1.807 percent.
