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Europe Roundup: Sterling dips on political turmoil, dollar hits 9-day low against yen on U.S. tax reform doubts, European shares tumble - Thursday, November 9th, 2017

Market Roundup

  • EUR/USD 0.16%, USD/JPY -0.29%, GBP/USD -0.11%, EUR/GBP 0.29%
     
  • DXY -0.13%, DAX -0.26%, FTSE -0.04%, Brent 0.43%, Gold 0.31%
     
  • Significant price chop in Nikkei 225 but importantly closes in the red
     
  • In Beijing, Trump presses China on North Korea and trade

  • Trump's $250 bln China 'miracle' adds gloss to 'off-kilter' trade
     
  • EZ to grow fastest in decade in 2017, to slow slightly in 2018, 2019
     
  • Germany Sept Exports MM SA -0.40% vs 3.10%, forecast -1.10%, revised 2%
     
  • Germany Sept Imports MM SA -1% vs 1.2%, forecast 0.3%, revised 0.8% 
     

Economic Data Ahead

  • (0800 ET/1300 GMT) The National Institute of Economic and Social Research (NIESR) will report Britain's GDP estimate in the three months through October. The indicator rose 0.4 percent in the previous month.
     
  • (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 2,000 to a seasonally adjusted 231,000 for the week ended Nov. 3, while continuing claims for the week ended Oct. 27 is expected to rise to 1.890 million from previous 1.884 million.
     
  • (0830 ET/1330 GMT) The Statistics Canada releases its New Housing Price Index (NHPI) for the month of September. The index is likely to rise 0.2 percent, up from 0.1 percent the month before.
     
  • (0900 ET/1400 GMT) Mexico's annual inflation rate is expected to have decreased to 6.34 percent in the 12 months through October, compared with 6.35 percent in the 12 months through September.
     
  • (1000 ET/1500 GMT) The U.S. Census Bureau is likely to report that wholesale inventories rose 0.3 percent in October after posting similar gains in the prior month.
     
  • (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending November 3.
     
  • (1645 ET/2145 GMT) The Statistics New Zealand will release Electronic Card Retail Sales figures for the month of October. The indicator posted a rise of 0.1 percent in the previous month. 

Key Events Ahead

  • (0845 ET/1345 GMT) European Central Bank (ECB) Vice-President Vítor Constâncio's speech.
     
  • (0845 ET/1345 GMT) FedTrade Operation 30-year Ginnie Mae (max $1.225 bn)
     
  • (1130 ET/1630 GMT) The Swiss National Bank Chairman of the Governing Board Thomas J. Jordan's speech.
     
  • (1320 ET/1820 GMT) European Central Bank (ECB) Executive Board member Sabine Lautenschläger 's speech.

FX Beat

DXY: The dollar index eased on increasing worries over a potential delay in the implementation of the U.S. tax cuts. The greenback against a basket of currencies traded 0.2 percent down at 94.68, having touched a high of 95.15 on Tuesday, its highest since Oct. 27. FxWirePro's Hourly Dollar Strength Index stood at -23.52 (Neutral) by 1000 GMT.

EUR/USD: The euro consolidated near the 1.1600 handle as a modest pickup in the U.S. Treasury bond yields helped the dollar to recover early losses. The European currency traded 0.1 percent up at 1.1606, having touched a low of 1.1554 on Tuesday; its lowest since July 20. FxWirePro's Hourly Euro Strength Index stood at 64.05 (Bullish) by 1000 GMT. The low made after Nonfarm payroll will be acting as near-term support 1.1550 and any break below will drag the pair to next level till 1.1500/1.1460/1.1430. On the higher side, minor bullishness can be seen above 1.1622 (10- day MA) and any break above will take it to next level till 1.1660/ 1.1170/1.1720.

USD/JPY: The dollar tumbled to a 9-day low against the yen, as talk of possible delays to U.S. President Donald Trump's tax reform plans weighed heavily on the greenback. The major was trading 0.4 percent down at 113.44, having hit a high of 114.73 on Monday, its highest since Mar. 15. FxWirePro's Hourly Yen Strength Index stood at 126.36 (Highly Bullish) by 1000 GMT. On the lower side, any close below 113.33 (20-day MA) confirms minor weakness, a decline till 122.25/111.60 (55- day EMA)/111.13 likely. Any convincing close above 114.50 (161.8% fib) confirms minor bullishness, a jump till 116 likely.

GBP/USD: Sterling slumped to a 3-day trough as investors remained cautious after a string of scandals leading to two resignations from the cabinet raised doubts over the Conservative government's ability to secure a strong deal in negotiations over Britain's leaving the European Union. The major traded 0.1 percent up at 1.3094, having hit a low of 1.3039 on Friday, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at -167.33 (Highly Bearish) by 1000 GMT. The near-term resistance is around 1.3180 and any short-term bullish continuation is only above 1.3380. On the lower side, near-term major support is around 1.3100 and any violation below will drag it down till 1.30380/1.30270. Against the euro, the pound was trading 0.3 percent down at 88.67 pence, having hit a high of 87.91 pence on Tuesday, its lowest since Nov. 2.

USD/CHF: The Swiss franc continued to consolidate within a narrow range, supported by persisting risk-averse market sentiment. The major trades 0.1 percent down at 0.9994, having touched a high of 1.0037 last month, it’s highest since May. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at -67.37 (Bearish) by 1000 GMT. The intraday trend is mildly weak, a dip till 0.9938 (Oct 30th low) is likely and any break below will drag it to next level till 0.98948 (23.6% fibo and trend line support). The major resistance is around 1.0040 and any break above will take it till 1.0100/1.0174.

AUD/USD: The Australian down trimmed gains as investors turned cautious ahead of the Reserve Bank of Australia's quarterly report due on Friday that could provide further clues on the direction of interest rates. The Aussie trades flat at 0.7674, having hit a low of 0.7638 on Tuesday; it’s lowest since Oct. 27. FxWirePro's Hourly Aussie Strength Index stood at -9.60 (Neutral) by 1000 GMT. On the lower side, the pair should close below 0.7624 for further weakness. Any close below targets 0.7600/0.7550. The near-term resistance is around 0.7685 (55- 4H EMA) and any break above targets 0.7732 (100- 4H MA)/0.7780.

Equities Recap

European shares slumped, weighed down by series of negative corporate earnings for the third quarter, while dollar tumbled to a 9-day low against the yen on possible delays to U.S. tax reform plans.

The pan-European STOXX 600 index edged down 0.3 percent to 393.39 points, while the FTSEurofirst 300 index fell 0.2 percent to 1,548.44 points.

Britain's FTSE 100 trades 0.1 percent lower at 7,525.47 points, while mid-cap FTSE 250 eased 0.5 percent to 20,204.72 points.

Germany's DAX fell 0.1 percent at 13,371.35 points; France's CAC 40 trades 0.1 percent down at 5,465.99 points.

Commodities Recap

Crude oil prices eased, extending losses for the third straight session, despite supply cuts by OPEC and other major exporters including Russia. International benchmark Brent crude was trading 0.1 percent down at $63.38 per barrel by 1017 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 $56.78 a barrel, after rising as high as $57.67 on Tuesday, its highest since Jun. 2015.

Gold prices rose, hovering towards a near three-week high touched in the previous session, as the dollar eased amid uncertainty over U.S. tax reforms. Spot gold rose 0.3 percent at $1,283.60 per ounce at 1021 GMT, having touched its highest since Oct. 20 at $1,287.04 an ounce on Wednesday. U.S. gold futures for December delivery were up 0.1 percent at $1,284.90.

Treasuries Recap

The U.S. Treasuries traded narrowly mixed as investors wait to focus on the country’s initial jobless claims, scheduled to be held today by 13:30GMT. The yield on the benchmark 10-year Treasury remained flat at 2.32 percent, the super-long 30-year bond yields steady at 2.78 percent and the yield on short-term 2-year note traded nearly a basis point higher at 1.65 percent.

The UK gilts traded range-bound as investors refrained from any major trading activity amid a silent trading session that witnessed data of less economic significance. The UK 10-year bond yields, which move inversely to its price, hovered around 1.22 percent, the yield on 30-year note also traded flat at 1.79 percent while the yield on short-term 2-year traded tad lower at 0.45 percent.

The German bunds continued to remain flat despite the country registering a trade surplus for the month of September at EUR21.8 billion, from EUR21.3 billion in August. The German 10-year bond yields, which move inversely to its price, hovered around 0.33 percent, the yield on 30-year note remained tad lower at 1.20 percent while the yield on short-term 2-year traded tad lower at -0.76 percent.

The New Zealand government bonds closed mixed after the Reserve Bank of New Zealand hinted that official cash rate (OCR) may need to rise somewhat sooner than already expected as it amended up inflation prediction. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, slumped 1-1/2 basis points to 2.940 percent, the yield on the 20-year note rose 9-1/2 basis points to 3.490 percent and the yield on short-term 2-year traded 1 basis point lower at 2.065 percent.

The benchmark 10-year Japanese bonds yields hovered around zero percent as the Bank of Japan maintained its ultra-easing policy stance in its October meeting summary. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1/2 basis points to 0.030 percent, the yield on long-term 30-year dipped 1 basis point to 0.799 percent and the yield on short-term 2-year too remained steady at -0.203 percent.

The Australian bonds slumped following weakness in the U.S. Treasuries as investors reduced their existing bond holdings to make room for this week's government and corporate bond supply. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose3-1/2 basis points to 2.613 percent, the yield on the long-term 30-year note jumped nearly 3-1/2 basis points to 3.385 percent and the yield on short-term 2-year climbed 1 basis point to 1.820 percent.

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2017-11-21 08:06:34
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2017-11-21 08:05:29
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2017-11-21 08:04:19
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2017-11-21 08:03:55
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November 20 20:00 UTC Released

BRCAGED Net Payroll Jobs*

Actual

77 k

Forecast

Previous

77 k

November 20 13:00 UTC Released

RURetail Sales YY

Actual

3.0 %

Forecast

3.9 %

Previous

3.1 %

November 21 13:55 UTC 332332m

USRedbook MM

Actual

Forecast

Previous

-1.2 %

November 21 13:55 UTC 332332m

USRedbook YY

Actual

Forecast

Previous

2.3 %

November 22 12:00 UTC 16571657m

USMBA Mortgage Applications

Actual

Forecast

Previous

3.1 %

November 22 12:00 UTC 16571657m

USMortgage Market Index

Actual

Forecast

Previous

401.7 Bln EUR

November 22 13:30 UTC 17471747m

USJobless Claims 4-Wk Avg

Actual

Forecast

Previous

237.75 k

November 22 13:30 UTC 17471747m

USInitial Jobless Claims

Actual

Forecast

240 k

Previous

249 k

November 22 13:30 UTC 17471747m

USContinued Jobless Claims

Actual

Forecast

1.882 Mln

Previous

1.860 Mln

November 22 14:30 UTC 18071807m

BRForeign Exchange Flows*

Actual

Forecast

Previous

-3.412 Bln USD

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