Market Roundup
- Fed chair nominee Powell pledges 'decisive' response to any economic crisis
- Fed's Dudley says not concerned U.S. inflation is 'a little' low
- Fed's Dudley Opposes U.S. Tax Stimulus At Current Time
- 'Because The Economy Doesn’t Really Need It'
- Trump's tax bill faces potential Senate Republican opposition
- Fed’s Kashkari: If Congress passes a tax bill, Fed will update economic models, which may change the path of interest rates
- BoJ’s Kuroda – Developing local ccy bond markets to help recycle savings
- BoJ’s Kataoka – For more ease, counters call for exit - Sankei
- Japan Inflation likely won’t reach 2% in FY ’19, for 15-yr JGB yields sub-0.2%
- Japan detects radio signals pointing to possible N.Korea missile test – source
- China Nov factory growth seen slowing slightly – Rtrs Preview
- OPEC sees market rebalancing after June as it mulls oil cut extension
- S. Africa's Zuma calls for action after S&P downgrade, rand up on Moody's reprieve
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Oct Import Price m/m, y/y, 0.6%, 2.6% forecast, 0.9%, 3.0% last
- (0245 ET/0745 GMT) France Nov Consumer Confidence forecast 101, 100 last
- (0400 ET/0900 GMT) EZ Oct Money-M3 Annual Growth forecast 5.1%, 5.1% last
- (0700 ET/1200 GMT) Germany Dec Gfk Consumer Sentiment forecast 10.8, 10.7 last
Key Events Ahead
- (0200 ET/0700 GMT) BoE to publish Financial Stability Report – London
- (0915 ET/1415 GMT) Fed's Dudley participates in a Q & A – New York
- (0930 ET/1430 GMT) Ireland's Lane to announce review of mortgage rules – Dublin
- (1000 ET/1500 GMT) Senate hearing on Powell's chairmanship – Washington
- (1015 ET/1515 GMT) Fed's Harker speaks at a conference – Philadelphia
- (1130 ET/1630 GMT) BoC's Poloz and Wilkins hold a press conference – Ottawa
- (1500 ET/2000 GMT) RBNZ publishes Financial Stability Report – Wellington
FX Beat
DXY: The dollar index consolidated near 2-month lows as investors refrained from taking big positions ahead of the Fed Chair-Designate Powell’s testimony and Senate vote on a U.S. tax plan later in the week. The greenback against a basket of currencies traded flat at 92.89, having touched a low of 92.50 on Monday, its lowest since Sept. 25. FxWirePro's Hourly Dollar Strength Index stood at -84.41 (Slightly Bearish) by 0500 GMT.
EUR/USD: The euro steadied after easing from a 2-month high touched in the previous session, as the greenback declined ahead of a congressional hearing on U.S. Federal Reserve chair nominee Jerome Powell and a possible Senate vote on U.S. tax reforms. The European currency traded flat at 1.1903, having touched a high of 1.1961 in the prior session, its highest since Sept. 22. FxWirePro's Hourly Euro Strength Index stood at 92.33 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on series of data from the Eurozone economies and Eurozone M3 money supply data, ahead of U.S. housing price index data and Fed officials' speeches. Immediate resistance is located at 1.1961 (Previous Session High), a break above targets 1.2000. On the downside, support is seen at 1.1847 (5-DMA), a break below could drag it lower 1.1811 (10-DMA).
USD/JPY: The dollar slightly edged up after slumping to 2-month lows in the prior session, as investors turned cautious ahead of a confirmation hearing on Tuesday for Federal Reserve chair nominee Jerome Powell and Senate vote on a U.S. tax plan later in the week. The major was trading 0.1 percent up at 111.15, having hit a low of 110.84 on Monday, its lowest since Sept. 15. FxWirePro's Hourly Yen Strength Index stood at 84.80 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. housing price index data and Fed officials' speeches for further momentum. Immediate resistance is located at 111.68 (78.6% retracement of 114.73 and 110.84), a break above targets 112.14 (10-DMA). On the downside, support is seen at 110.84 (Previous Session Low), a break below could take it near 110.50.
GBP/USD: Sterling gained after falling from an 8-week high hit in the previous session as markets' attention shifted towards the Bank of England's Financial Stability Report and Governor Carney’s speech due later today. However, the upside in the major remained capped as the comments from the Irish Foreign Minister Coveney weighed on investor sentiment. Sterling traded 0.2 percent up at 1.3337, having hit a high of 1.3383 on Monday, it’s highest since Oct. 2. FxWirePro's Hourly Sterling Strength Index stood at 17.74 (Neutral) by 0400 GMT. Investors’ focus will remain on developments surrounding Brexit deal, UK bank stress test results, BoE FSR report and Governor Carney’s speech, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3400, a break above could take it near 1.3456. On the downside, support is seen at 1.3284, a break below targets 1.3249 (10-DMA). Against the euro, the pound was trading 0.1 percent up at 89.27 pence, having hit a low of 89.66 pence the prior session, it’s lowest since Nov. 16.
AUD/USD: The Australian dollar steadied after falling for two consecutive sessions, as the greenback slightly eased ahead of the Fed Chair nominee Powell’s Congressional testimony and US Senate tax vote. The Aussie trades 0.1 percent up at 0.7609, having hit a high of 0.7644 on Monday; it’s highest since Nov. 14. FxWirePro's Hourly Aussie Strength Index stood at -37.52 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7593 (Previous Session Low), a break below targets 0.7555. On the upside, resistance is located at 0.7633 (21-DMA), a break above could take it near 0.7667 (61.8% retracement).
NZD/USD: The New Zealand dollar rallied to an over 2-week high ahead of the Reserve Bank of New Zealand's financial stability review on Wednesday. The major trades 0.3 percent up at 0.6934, having touched a high of 0.6938 earlier, its highest level since Nov. 10. FxWirePro's Hourly Kiwi Strength Index was at 144.65 (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 0.6957, a break above could take it near 0.6980. On the downside, support is seen at 0.6904 (78.6% retracement of 0.6780 and 0.6907), a break below could drag it lower 0.6878 (5-DMA).
Equities Recap
Asian shares pulled back from decade highs as Chinese stocks declined for a second straight session, while the greenback consolidated within narrow ranges ahead of Senate vote on tax reform.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.3 percent
Tokyo's Nikkei declined 0.1 percent to 22,468.40 points, Australia's S&P/ASX 200 index eased 0.10 percent to 5,984.30 points and South Korea's KOSPI rallied 0.4 percent to 2,517.46 points.
Shanghai composite index rose 0.2 percent to 3,327.82 points, while CSI300 index was trading 0.1 percent down at 4,045.89 points.
Hong Kong’s Hang Seng was trading 0.6 percent lower at 29,511.87 points. Taiwan shares shed 0.4 percent to 10,707.07 points.
Commodities Recap
Crude oil prices declined, extending previous session losses, amid uncertainty over a possible extension of output cuts by major crude producers and expectations of higher supply as the Keystone pipeline restarts. International benchmark Brent crude was trading 0.1 percent down at $63.63 per barrel by 0440 GMT, having hit a high of $63.96 on Monday, its highest since Nov. 10. U.S. West Texas Intermediate was trading 0.2 percent lower at $57.74 a barrel, after rising as high as $59.02 on Friday, its highest since June 2015.
Gold prices held gains near a six-week high touched in the previous session as the dollar weakened ahead of a congressional hearing on U.S. Federal Reserve chair nominee Jerome Powell and a possible Senate vote on U.S. tax reforms. Spot gold was trading flat at $1,293.57 an ounce at 0446 GMT, having hit a high of $1,299.10 an ounce on Monday, its highest since Oct. 16. U.S. gold futures for December delivery were nearly unchanged at $1,294.80.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.331 percent higher by 0.003 bps, while 5-year yield was 0.011 bps up at 2.057 percent.
The Australian government bond futures likewise gained, with the three-year bond contract up 2 ticks at 98.090. The 10-year contract rose 3 ticks to 97.4900.
The New Zealand government bonds firmed in price, nudging yields down as much as 2.5 basis points.
The Canadian government bond prices were higher across the maturity curve, with the two-year price up 2 Canadian cents to yield 1.430 percent and the benchmark 10-year rising 18 Canadian cents to yield 1.867 percent. The Canada-U.S. two-year bond spread widened slightly to -31.5 basis points, while the 10-year spread widened 1.3 basis points to -46.4 basis points.
