Market Roundup
- Fed's Daly wants gradual rate hikes, says Fed not on autopilot.
- China Vice Premier Liu He prepares to visit the US ahead of G20 – SCMP.
- Oil falls as Trump raps OPEC's supply cut plan.
- Germany's Scholz sees Italy taking steps to resolve budget row.
- Brexit talks are nearing their endgame - UK PM May.
- Third of small UK firms see post-Brexit sterling slump.
- U.S. VP Pence pushes Japan for bilateral free trade agreement.
- Japan central bank's total assets exceed country's GDP.
- Australia NAB Business Conditions 12, 15 previous.
- Australia NAB Business Confidence 4, 6 previous.
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Oct CPI Final (mm), 0.2% forecast, 0.2% previous.
- (0200 ET/0700 GMT) Germany Oct CPI Final (yy), 2.5% forecast, 2.5% previous.
- (0200 ET/0700 GMT) Germany Oct HICP Final (mm), 0.1% forecast, 0.1% previous.
- (0200 ET/0700 GMT) Germany Oct HICP Final (yy), 2.4% forecast, 2.4% previous.
- (0430 ET/0930 GM) UK Sep ILO Unemployment Rate, 4.0% forecast, 4.0% previous.
- (0430 ET/0930 GM) UK Sep Employment Change, 21k forecast, -5k previous.
- (0430 ET/0930 GM) UK Sep Average weekly Earnings 3M (yy), 3.0% forecast, 2.7% previous.
- (0430 ET/0930 GM) UK Sep Average Earnings (Ex-Bonus), 3.1% forecast, 3.1% previous.
- (0500 ET/1000 GMT) Germany Nov ZEW Economic Sentiment, -25.0 forecast, -24.7 previous.
- (0500 ET/1000 GMT) Germany Nov ZEW Current Conditions, 65.0 forecast, 70.1 previous.
Key Events Ahead
- N/A Riksbank Deputy Governor Henry Ohlsson will discuss current monetary policy and the economic situation at Mid Sweden University in Sundsvall, Sweden.
- (0300 ET/0800 GMT) ECB chief economist Peter Praet speaks at a UBS European conference 2018 in London.
- (0345 ET/0845 GMT) ECB bank supervisors Sabine Lautenschlager speaks in opening discussion at "Banking Supervision, Resolution and Risk Management in Europe" conference during 21st Euro Finance Week in Frankfurt, Germany.
- (0800 ET/1300 GMT) Norway Central Bank Deputy Governor Jon Nicolaisen gives a speech at the seminar "Adam Smith and Economic Development" in Paris.
- (1000 ET/1500 GMT) Federal Reserve Board Governor Lael Brainard speaks on "Artificial Intelligence and the New Financial Landscape" before event, Fintech and the New Financial Landscape in Philadelphia.
- (1000 ET/1500 GMT) Minneapolis Fed President Neel Kashkari gives welcome and introductory remarks, and moderates an audience question-and-answer session, before the 2018 Regional Economics Conference hosted by the Federal Reserve Bank of Minneapolis.
- (1200 ET/1700 GMT) Riksbank Deputy Governor Per Jansson will visit Linköping. The visit is the final stop on the tour of Sweden carried out over the year as a part of the Riksbank’s 350th anniversary in Linkoping, Sweden.
- (1230 ET/1730 GMT) Yannis Stournaras, Governor of the Bank of Greece, speaks on lessons from the crisis and challenges for the Greek banking sector going forward in Geneva.
- (1400 ET/1900 GMT) Dinner speech by ECB Vice President Luis de Guindos at the Bundesbank Reception on the occasion of the Euro Finance Week organised by Deutsche Bundesbank in Frankfurt, Germany.
- (1420 ET/1920 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker participates in conversation before event, Fintech and the New Financial Landscape in Philadelphia.
- (1700 ET/2200 GMT) Federal Reserve Bank of San Francisco President Mary Daly gives lecture at Boise State University, Idaho.
FX Recap
USD: The dollar index, a gauge of its value versus six major peers, traded at 97.60, sitting just shy of its 16-month high of 97.69 hit on Monday.
EUR/USD: The euro gained 0.1 percent to trade at $1.1227 on Tuesday, after tumbling more than one percent versus the dollar on Monday. A consistent close below $1.1217 will drag the parity down towards key supports around $1.1185 and $1.1080 levels respectively. Alternatively, reversal from key support will drag the parity higher towards key resistances around $1.1330, $1.1432, $1.1550 and $1.1620 marks respectively.
USD/JPY: The Japanese yen was the only major currency to gain versus the dollar overnight as risk aversion caught hold of investors. It traded at 113.66 on Tuesday, as the greenback lost 0.16 percent versus the yen. The yen touched a six-week low of 114.23 on Monday before the safe-haven bids kicked in. Pair was currently trading around 113.98 marks. It made intraday high at 114.04 and low at 113.58 levels. A sustained close above 114.06 is required to take the parity higher towards key resistances around 114.55, 115.25 and 117.98 marks respectively. Alternatively, a daily close below 113.79 will drag the parity down towards key supports around 112.60, 110.98, 110.27, 109.24, 108.72 and 107.90 marks respectively.
GBP/USD: The sterling traded with a weak bias in early Asian trade at $1.2856. It has slipped against the dollar in the last three trading sessions and posted its largest percentage decline versus the dollar since Sept 21 on Monday. Investor sentiment has weakened as doubts grow over Prime Minister Theresa May's ability to win the backing of the European Union or her own party for a Brexit deal. Sterling bounced slightly from Monday's intraday lows after the European Union’s chief Brexit negotiator said the main elements of an exit treaty text are ready to present to the British cabinet on Tuesday. A sustained close below $1.2848 requires for dragging the parity down towards key supports around $1.2662 and $1.2498 mark respectively. On the other side, key resistances are seen at $1.2946, $1.3017, $1.3187, $1.3215, $1.3362 and $1.3490 levels respectively.
AUD/USD: The Australian dollar hit a one-week low of $0.7164, slipping from last week’s $0.7302 high. The pair made intraday high at $0.7217 and low at $0.7164 levels. Immediate support and resistance levels were seen at $0.7160 and $0.7303 mark respectively.
NZD/USD: The New Zealand erases previous loss against U.S. dollar and currently trading around $0.6747 mark. Major support is down at $0.6424, with resistance around $0.6850. Pair made intraday high at $0.6750 and low at $0.6706 levels. A sustained close above $0.6709 is required to take the parity higher towards $0.6814 and $0.7050 mark respectively. Alternatively reversal from key resistance will take the parity down towards key supports around $0.6402 levels.
Equities Recap
Japan’s Nikkei was trading 2.40 pct lower at 21,737.50 points.
Australia’s S&P/ASX 200 was trading 1.67 pct lower at 5,841.85 points.
Shanghai composite index to open down 1.1 pct at 2,600.50 points and China's CSI300 index to open down 1.3 pct at 3,164.92 points.
Taiwanese stock was trading around 0.76 percent lower at 9,756.93 points.
Hong Kong’s Hang seng was trading 0.15 pct lower at 25,595.55 points.
India’s NSE Nifty was trading around 0.03 percent higher at 10,484.22 points while BSE Sensex was trading 0.02 points higher at 34,811 points.
South Korea’s Kospi was trading 0.86 percent lower at 2,062.20 points.
Commodities Recap
Oil prices fell by around 1 percent on Tuesday, with Brent crude sliding below $70 and WTI below $60 per barrel, after U.S. President Donald Trump put pressure on OPEC not to cut supply to prop up the market. U.S. West Texas Intermediate (WTI) crude oil futures were at $59.15 per barrel at 0214 GMT, down 78 cents, or 1.3 percent from their last settlement. International benchmark Brent crude oil futures were at $69.47 per barrel, down 65 cents, or 0.9 percent, from their last close.
Gold prices edged higher on Tuesday as investors resorted to bargain-hunting after the precious metal fell to over one-month lows, weighed down by a stronger dollar. Spot gold was up 0.3 percent at $1,204.22 per ounce at 0339 GMT, having touched its lowest since Oct. 11 at $1,199.72 earlier in the session. U.S. gold futures inched up 0.1 percent to $1,204.7 per ounce.
Treasuries Recap
Australian bonds jumped during Asian session Tuesday amid a muted trading session that witnessed data of little economic significance. However, investors will keep a close eye on the country’s employment report for the month of October, scheduled to be released on November 15 for further direction in the debt market. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 3-1/2 basis points to 2.730 percent, the yield on the long-term 30-year bond fell nearly 1-1/2 basis points to 3.237 percent, and the yield on short-term 2-year too traded 1-1/2 basis points lower at 2.080 percent by 03:30GMT.
The Japanese government bonds remained tad higher on Tuesday, as investors expect to see a slump in the country’s gross domestic product (GDP) for the third quarter of this year, scheduled to be released today by 23:50GMT. Also, the industrial production for the month of September is seen to remain weak as well, scheduled to be released on November 14 by 04:30GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded lower at 0.118 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.879 percent and the yield on short-term 2-year too remained tad lower at -0.136 percent by 05:50GMT.
New Zealand government bonds were barely changed.
