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Europe Roundup: Sterling at 1-month low on renewed Brexit deal concerns, euro rallies on better-than-expected EZ manufacturing PMI, European shares surge - Monday, December 3rd, 2018

Market Roundup

  • United Kingdom Nov 2018 Markit/CIPS manufacturing PMI increase to 53.1 diff.idx (forecast 51.8 diff.idx) vs previous 51.1 diff.idx
     
  • Eurozone Nov 2018 Markit manufacturing final PMI increase to 51.8 diff.idx (forecast 51.5 diff.idx) vs previous 51.5 diff.idx
     
  • Greece Nov 2018 PMI manufacturing increase to 54 diff.idx vs previous 53.1 diff.idx
     
  • Germany Nov 2018 Markit/BME manufacturing PMI increase to 51.8 diff.idx (forecast 51.6 diff.idx) vs previous 51.6 diff.idx
     
  • France Nov 2018 Markit manufacturing PMI increase to 50.8 diff.idx (forecast 50.7 diff.idx) vs previous 50.7 diff.idx
     
  • Italy Nov 2018 Markit/ADACI manufacturing PMI decrease to 48.6 diff.idx (forecast 48.9 diff.idx) vs previous 49.2 diff.idx
     
  • Switzerland Nov 2018 manufacturing PMI increase to 57.7 diff.idx (forecast 56.1 diff.idx) vs previous 57.4 diff.idx
     
  • Switzerland Oct 2018 retail sales yy increase to 0.8 % vs previous -2.5 % (revised from -2.7 %)
     
  • Spain Nov 2018 manufacturing PMI increase to 52.6 diff.idx (forecast 51.5 diff.idx) vs previous 51.8 diff.idx
     

Economic Data Ahead

  • (0930 ET/1430 GMT) The Markit will release Canada's Manufacturing PMI for the Month of November. The indicator stood at 53.9 in the prior month.
     
  • (0945 ET/1445 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of November. The index is likely to show a final reading of 55.4 after posting similar gains in the previous month.
     
  • (1000 ET/1500 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. manufacturing Purchasing Managers' index rose to 57.8 in November from a reading of 57.7 in October.
     
  • (1000 ET/1500 GMT) The Commerce Department is likely to report that U.S. construction spending increased 0.4 percent in October, after a flat reading in the previous month.
     
  • (1530 ET/2030 GMT) Autodata Corp is expected to report that U.S. auto sales figures dropped to an annualized rate of 17.30 million units in November from 17.57 million units in October.
     

Key Events Ahead

  • (0800 ET/1300 GMT) Fed Vice-Chair for Supervision Randall Quarles participates in a moderated question-and-answer session before the C. Peter McColough Series on International Economics, hosted by the Council on Foreign Relations in New York.
     
  • (0900 ET/1400 GMT) Eurozone finance ministers meet to discuss eurozone budget, new powers for their bailout fund and a deposit guarantee scheme in Brussels
     
  • (0915 ET/1415 GMT) New York Fed President John Williams speaks at The Evolving Structure of the U.S. Treasury Market conference in New York
     
  • (1030 ET/1530 GMT) Federal Reserve Board Governor Lael Brainard speaks on "Treasury Market Structure" at a conference in New York
     
  • (1230 ET/1730 GMT) BoE Chief Economist Andy Haldane speaks in Cambridge on public policy in London
     
  • (1300 ET/1800 GMT) Dallas Fed President Robert Kaplan participates in a moderated question-and-answer session in Laredo
     
  • N/A U.S. Treasury Secretary Steven Mnuchin, White House economic adviser Larry Kudlow, National Security Adviser John Bolton and U.S. Senate Republican Leader Mitch McConnell are scheduled to speak at Wall Street Journal's two-day 11th annual CEO Council Meeting in Washington.
     

FX Beat

DXY: The dollar index eased as investors rushed into riskier assets on news that China and the United States will attempt to bridge their differences via new talks aimed at reaching a deal within 90 days. The greenback against a basket of currencies trades 0.1 percent down at 97.10, having touched a high of 97.54 on Wednesday, its highest since Nov 13. FxWirePro's Hourly Dollar Strength Index stood at -23.37 (Neutral) by 1000 GMT.

EUR/USD: The euro surged as the Italian parliament commences voting this week on the government's contested 2019 budget, with Prime Minister Giuseppe Conte being optimistic that a deal can be agreed with the European Commission. Moreover, better-than-expected Eurozone's Markit manufacturing PMI supported the bid tone around the major. The European currency traded 0.3 percent up at 1.1346, having touched a high of 1.1401 on Thursday, its highest since Nov. 23. FxWirePro's Hourly Euro Strength Index stood at 67.66 (Neutral) by 0500 GMT. Immediate resistance is located at 1.1420 (November 16 High), a break above targets 1.1472 (November 20 High). On the downside, support is seen at 1.1305 (November 30 Low), a break below could drag it till 1.1263 (November 26 Low).

USD/JPY: The dollar edged up as risk sentiment revived following a truce between the United States and Chinese leaders on trade tariffs. Washington and Beijing agreed at the weekend to halt additional tariffs in a deal that keeps their trade war from escalating. The major was trading 0.1 percent up at 113.53, having hit a high of 114.03 on Wednesday, its highest since November 13. FxWirePro's Hourly Yen Strength Index stood at -0.54 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. manufacturing PMI's, construction spending and FOMC member Brainard's speech. Immediate resistance is located at 114.03 (November 28 High), a break above targets 114.23 (November 12 High). On the downside, support is seen at 113.09 (November 15 Low), a break below could take it lower 112.88 (November 22 Low).

GBP/USD: Sterling slumped to a 1-month low as Prime Minister Theresa May faces a challenge to get lawmakers to back her deal to keep close economic ties with the bloc, which she agreed with the EU in November. Investors seem to have ignored upbeat UK Markit manufacturing PMI amid growing concerns over Brexit deal. The major traded 0.3 percent down at 1.2709, having hit a low of 1.2708 earlier; it’s lowest since October 31. FxWirePro's Hourly Sterling Strength Index stood at -82.34 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.2853 (November 19 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2695 (October 30 Low), a break below targets 1.2661 (August 15 Low). Against the euro, the pound was trading 0.4 percent down at 89.06 pence, having hit a low of 89.24 on Friday, it’s lowest since Nov. 19.

USD/CHF: The Swiss franc eased, extending losses for the third straight session, as risk sentiment revived across the global markets. The major trades 0.05 percent up at 0.9990, having touched a high of 1.0005 on Wednesday; it’s highest since Nov. 19. FxWirePro's Hourly Swiss Franc Strength Index stood at -95.54 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0026 (Oct. 26 High) and any break above will take the pair to next level till 1.0050 (Nov. 7 High). The near-term support is around 0.9908 (November 20 Low), and any close below that level will drag it till 0.9881 (October 12 Low).

Equities Recap

European shares surged, boosted by gains in miners, autos, tech, and oil stocks, while sterling slumped to a 1-month trough amid growing concerns over the British parliament's vote on Brexit next week.

The pan-European STOXX 600 index rallied 1.8 percent at 364.02 points, while the FTSEurofirst 300 index advanced 1.9 percent to 1,435.78 points.

Britain's FTSE 100 trades 2.4 percent up at 7,145.44 points, while mid-cap FTSE 250 surged 1.3 to 18,725.44 points.

Germany's DAX rose 2.6 percent at 11,548.26 points; France's CAC 40 trades 2.1 percent higher at 5,106.61 points.

Commodities Recap

Crude oil prices rallied by more than 5 percent ahead of a meeting this week of the producer cartel OPEC that is expected to cut supply. International benchmark Brent crude was trading 5.1 percent up at $61.98 per barrel by 1024 GMT, having hit a low of $57.48 on Thursday, its lowest since October 2017. U.S. West Texas Intermediate was trading 5.2 percent up at $53.17 a barrel, after falling as low as $49.44 on Thursday, its lowest since the October 2017.

Gold prices surged to a more than 3-week high as the greenback weakened after the United States and China agreed to a 90-day truce in a trade dispute. Spot gold was trading 0.8 percent up at $1,231.20 per ounce at 1026 GMT, having touched its highest level since Nov. 7 at $1,232.17 earlier in the session. U.S. gold futures were up 0.8 percent at $1,235.2 per ounce.

Treasuries Recap

The U.S. Treasuries slumped during late afternoon session ahead of the country’s ISM manufacturing PMI report for the month of November, due today by 15:00GMT. The yield on the benchmark 10-year Treasuries jumped nearly 3 basis points to 3.326 percent, the super-long 30-year bond yields rose 1-1/2 basis points to 3.326 percent and the yield on the short-term 2-year traded 3 basis points higher at 2.841 percent.

The United Kingdom’s gilts traded mixed during the afternoon session after the country’s manufacturing PMI for the month of November beating market expectations, also rising from that in October, with the long-term yields gaining the highest. Further, the 5-year auction, due on December 4 by 10:45GMT will add further direction to the debt market. The yield on the benchmark 10-year gilts, remained tad lower at 1.362 percent, the super-long 30-year bond yields jumped 4 basis points to 2.083 percent and the yield on the short-term 2-year traded steady at 0.772 percent.

The German bunds slipped during European session after the country’s manufacturing PMI remained tad higher during the month of November. The German 10-year bond yields, which move inversely to its price, rose 1-1/2 basis points to 0.323 percent, the yield on 30-year note also climbed 1-1/2 basis points to 0.993 percent and the yield on short-term 2-year traded 1 basis point higher at -0.585 percent.

The Australian government bonds slumped across the curve during Asian session oafter China and United States leaders brokered a truce in their trade conflict. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 3 basis points to 2.623 percent, the yield on the long-term 30-year bond also climbed 3 basis points to 3.147 percent and the yield on short-term 2-year up 1/2 basis point to 2.015 percent.

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March 19 07:00 UTC Released

CHTrade

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3125 Mln CH

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3043 Mln CH

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-2.4 %

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-2 %

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-1.5 %

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-1541 %

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2016 bln ARS

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January 22 19:00 UTC 606038606038m

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-1541 %

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2016 bln ARS

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