Market Roundup
- Trump warns 'rogue regime' N. Korea of grave danger
- Fog stops Trump facing-off N. Korea across DMZ
- Democrats win bitter Virginia governor's race in setback for Trump
- U.S. Republican tax plans gain speed; Fitch warns on deficit
- China Oct Exports y/y, 6.9% vs 8.1%, forecast 7.2%
- China Oct Imports y/y, 17.2% vs 18.7%, forecast 16.0%, revised 18.6%
- China Oct Trade Balance USD +38.17 bln vs revised +28,61 bln, forecast +39.50 bln
- China's Oct FX reserves rise slightly in ninth month of gains
- Quick signoff on TPP trade deal far from sure at Asia-Pacific meeting
- BOJ's Funo says important to maintain 'powerful' easing
- EU eyes tough Brexit transition terms
- Greens, FDP make concessions in German coalition talks
- Saudi mass arrests jolt markets but many see overdue swoop on corruption
- Macri says Argentina's economy to grow more than 3 pct this year - Rtrs Exclusive
- Bitcoin a new asset class, not a crypto-currency - CME's Melamed
Economic Data Ahead
- (0245 ET/0745 GMT) France Sept Trade Balance, EUR, SA, forecast -4.80 bln, -4.50 bln last
Key Events Ahead
- N/A IMF's Lagarde, Japan's Kuroda and Aso speak at a seminar – Tokyo
- N/A ECB Governing council meeting – Frankfurt
- (0300 ET/0800 GMT) Riksbank’s executive board meeting
- (0310 ET/0810 GMT) Norges Bank's Nicolaisen speaks at a conference – Stavanger
- (0650 ET/1150 GMT) BoE's Kohn speaks at a conference – London
- (1335 ET/1835 GMT) BoE's Carney speaks at King's College – London
FX Beat
DXY: The dollar index steadied after rising to an 11-day high in the previous session, amid concerns Republican plans for major U.S. tax cuts were being delayed. The greenback against a basket of currencies traded flat at 94.84, having touched a high of 95.15 the day before, its highest since Oct. 27. FxWirePro's Hourly Dollar Strength Index stood at -41.79 (Neutral) by 0500 GMT.
EUR/USD: The euro rebounded after falling to a 3-1/2 month low in the previous session, in response to fresh selling seen in the U.S. dollar across the board following the reports of the GOP considering one-year corporate tax cut delay. The European currency traded 0.1 percent up at 1.1597, having touched a low of 1.1554 on Tuesday; its lowest since July 20. FxWirePro's Hourly Euro Strength Index stood at -43.64 (Neutral) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies, ahead of the U.S. Mortgage Applications data. Immediate resistance is located at 1.1632 (78.6% retracement of 1.1837 and 1.1674), a break above targets 1.1644 (10-DMA). On the downside, support is seen at 1.1580 (Nov. 6 Low), a break below could drag it lower 1.1550.
USD/JPY: The dollar fell below the 114.00 handle after the Washington Post reported that Senate Republican leaders are considering a one-year delay in the implementation of a major corporate tax cut to comply with Senate rules. The major was trading 0.2 percent down at 113.80, having hit a high of 114.73 on Monday, its highest since Mar. 15. FxWirePro's Hourly Yen Strength Index stood at 50.45 (Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. Mortgage Applications data for further momentum. Immediate resistance is located at 114.40, a break above targets 114.75. On the downside, support is seen at 113.54 (Nov. 2 Low), a break below could take it near 113.22 (21-DMA).
GBP/USD: Sterling consolidated with narrow ranges, as investors remained cautious ahead of the commencement of Britain's next stage of negotiations on its departure from the European Union on Thursday. The major traded flat at 1.3171, having hit a low of 1.3039 on Friday, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at 133.39 (Highly Bullish) by 0400 GMT. Investors’ focus will remain on U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3200, a break above could take it near 1.3227. On the downside, support is seen at 1.3125 (Oct. 19 Low), a break below targets 1.3078. Against the euro, the pound was trading 0.1 percent down at 88.06 pence, having hit a low of 89.38 pence on Thursday, its lowest since Oct. 26.
AUD/USD: The Australian dollar retreated after falling to an 11-day low the prior day, as China reported that imports in October rose 17.2 percent from a year earlier, beating forecasts of 16 percent, but export growth was just under forecast at 6.9 percent. The Aussie trades 0.1 percent up at 0.7651 having hit a low of 0.7627 on Tuesday; it’s lowest since Oct. 27. FxWirePro's Hourly Aussie Strength Index stood at -52.08 (Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7624 (Oct. 27 Low), a break below targets 0.7600. On the upside, resistance is located at 0.7674 (5-DMA), a break above could take it near 0.7700.
NZD/USD: The New Zealand dollar rose, as investors awaited the Reserve Bank of New Zealand October OCR decision that will be announced later in the day. The central bank is expected to keep the OCR on hold at 1.75 percent and to repeat the previous guidance. The Kiwi trades 0.2 percent up at 0.6911, having touched a high of 0.6950 on Monday, its highest level since Oct. 24. FxWirePro's Hourly Kiwi Strength Index was at -36.36 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6968 (61.8% retracement of 0.7206 and 0.6818), a break above could take it near 0.7013 (50.0% retracement of 0.7206 and 0.6818). On the downside, support is seen at 0.6860, a break below could drag it till 0.6820.
Equities Recap
Asian shares traded in a volatile market, while the greenback consolidated below an 11-day high on a report that suggested the implementation of major corporate tax cut under discussion in U.S. tax reforms plans could be delayed.
MSCI's broadest index of Asia-Pacific shares outside Japan erased early losses to rise 0.2 percent, its highest since November 2007
Tokyo's Nikkei fell 0.2 percent to 22,888.63 points, Australia's S&P/ASX 200 index gained 0.05 percent to 6,016.30 points and South Korea's KOSPI declined 0.05 percent to 2,545.13 points.
Shanghai composite index rose 0.2 percent to 3,420.23 points, while CSI300 index was trading 0.3 percent up at 4,064.26 points.
Hong Kong’s Hang Seng was trading 0.2 percent lower at 28,947.78 points. Taiwan shares shed 0.2 percent to 10,818.99 points.
Commodities Recap
Crude oil prices steadied after falling from an over 2-year peak in the previous session, as expectations of strong Chinese demand and tightening supplies supported market sentiment. International benchmark Brent crude was trading flat at $63.52 per barrel by 0424 GMT, having hit a high of $64.62 the prior day, its highest since June 2015. U.S. West Texas Intermediate was trading 0.1 percent up at $56.97 a barrel, after rising as high as $57.67 on Tuesday, its highest since Jun. 2015.
Gold prices rose, reversing some of its previous session losses, as the dollar declined after a media report suggested that the implementation of a major corporate tax cut under a crucial U.S. tax reform plan could be delayed. Spot gold was 0.3 percent up at $1,278.35 per ounce as of 0431 GMT, having touched a one-week low of $1,265.43 on Friday. U.S. gold futures for December delivery gained 0.1 percent to $1,277.30.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.310 percent higher by 0.004 bps, while 5-year yield was 0.004 bps up at 1.986 percent.
The Japanese bonds traded firmer following solid daily market operations from the Bank of Japan. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell nearly 1 basis point to 0.024 percent, the yield on long-term 40-year also slid 1 basis point to 0.999 percent and the yield on short-term 2-year declined 1-1/2 basis points to -0.201 percent.
The Australian bonds traded a little firmer as markets awaited the Statement on Monetary Policy (SoMP) from the Reserve Bank of Australia. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.589 percent, the yield on the long-term 30-year note declined nearly 1 basis point to 3.361 percent and the yield on short-term 2-year remained steady at 1.791 percent.
The New Zealand bonds closed lower as investors shrugged off weak GlobalDairyTrade Price Index data. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, jumped 3-1/2 basis points to 2.87 percent, the yield on the 20-year note also surged 3-1/2 basis points to 3.39percent and the yield on short-term 2-year ended 1-1/2 basis points higher at 2.02 percent.
The Canadian government bond prices were higher across the yield curve, with the two-year up 4 Canadian cents to yield 1.399 percent and the 10-year rising 28 Canadian cents to yield 1.893 percent, the lowest since Sept. 1.
