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Europe Roundup: Sterling eases ahead of Brexit summit, euro slumps on downbeat sentix investor confidence, dollar rallies on U.S. tax cut progress - Monday, December 4th, 2017

Market Roundup

  • EUR/USD -0.33%, USD/JPY 0.74%, GBP/USD -0.31%, EUR/GBP 0.01%
     
  • DXY 0.39%, DAX 1.14%, FTSE 0.7%, Brent -0.66%, Gold -0.54%
     
  • DXY techs: breaks back inside daily cloud but capped at 93.355 100DMA
     
  • EZ Sentix Index Dec, 31.1, 33.6 forecast, 34.0 previous
     
  • EZ Producer Prices MM Oct, 0.4%, 0.3% forecast, 0.6% previous
     
  • EZ Producer Prices YY Oct, 2.5%, 2.6% forecast, 2.9% previous
     
  • Great Britain Markit/CIPS Cons PMI Nov, 53.1, 51.0 forecast, 50.8 previous
     
  • Japan consumer confidence at 4-year high on stocks, job market
     
  • BOJ is resolved to keep ultra-easy policy, says Kuroda
     
  • China says 2018 growth target to reflect new changes in economy
     
  • Oil falls after US drilling picks up
     
  • Gold price slides towards four-week lows, at risk from higher dollar

Economic Data Ahead

  • (0945 ET/1445 GMT) The NAPM-New York releases ISM-New York Business Conditions Index for the month of November. The index stood at 51.6 in the previous month.
     
  • (1000 ET/1500 GMT) The United States is likely to report that factory orders increased 0.6 percent in October after posting a fall of 1.4 percent in the prior month.
     
  • (1730 ET/ 2230 GMT) The Australian Industry Group (AiG) releases its Performance of Service Index for the month of October. The index stood at 51.4 in the month of September.  

Key Events Ahead

  • (0645 ET/1145 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.510 bn)
     

FX Beat

DXY: The dollar rebounded as the passage of a long-awaited US tax overhaul bill revived prospects for an aggressive Fed rate hike moves through 2018 and triggered an upsurge in the U.S. Treasury bond yields. The greenback against a basket of currencies traded 0.4 percent up at 93.28, having touched a high of 93.51 on Thursday, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at 78.34 (Slightly Bullish) by 1000 GMT.

EUR/USD: The euro declined, extending previous session losses, amid persistent broad-based US dollar strength, boosted by the U.S. Senate’s approval of the tax overhaul bill. Moreover, the selling pressure around the major intensified after data showed investor sentiment in the eurozone fell more than expected in December. The European currency traded 0.4 percent down at 1.1853, having touched a high of 1.1940 on Friday, its highest since Nov. 27. FxWirePro's Hourly Euro Strength Index stood at -99.67 (Slightly Bearish) by 1000 GMT. The pair is facing resistance at 1.19615 (Nov 27th high) and any break above will take the pair to next level till 1.2000/1.2090. On the lower side, near-term support is around 1.19000 and any break below will drag it to next level till 1.18700 (50- H MA)/1.1835 (233- H MA)/.

USD/JPY: The dollar advanced to a 2-1/2 week high above the 113.00 handle, as the U.S. Treasury bond yields rose amid reviving hopes for aggressive Fed monetary policy tightening through 2018. The major was trading 0.7 percent up at 112.88, having hit a high of 113.07 earlier, its highest since Nov. 17. FxWirePro's Hourly Yen Strength Index stood at -96.79 (Slightly Bearish) by 1000 GMT. On the lower side, any close below 111 confirms minor weakness, a decline till 110/108.15 likely. Any convincing close above 113.35 (Nov 16th 2017 high) will take the pair to next level till 114/115 likely.

GBP/USD: Sterling retreated after rising to an over 2-month peak in the previous session, as investors focused on a summit in Brussels, where British Prime Minister Theresa May hopes that her talks with European Commission President Jean-Claude Juncker and his Brexit negotiator Michel Barnier, can persuade her 27 fellow EU leaders on divorce terms. The major traded 0.3 percent down at 1.3425, having hit a high of 1.3549 in the previous session, it’s highest since Sept. 25. FxWirePro's Hourly Sterling Strength Index stood at -28.62 (Neutral) by 1000 GMT. The pair was facing strong resistance at 1.3550 and any convincing break above will take the pair to next level till 1.3600/1.3700 level. On the lower side, near-term support is around 1.3420 (38.2% fibo) and any break below will drag it to next level till 1.3400/1.3375. Against the euro, the pound was trading 0.1 percent up at 88.16 pence, having hit a high of 87.76 pence on Thursday, it’s highest since Nov. 2.

USD/CHF: The Swiss franc eased after rising to a 1-1/2 month high in the prior session, as the greenback gained amid the U.S. tax reform optimism and fading political uncertainty in the U.S. The major trades 0.8 percent up at 0.9840, having touched a low of 0.9735 on Friday, it’s lowest since Oct. 16. FxWirePro's Hourly Swiss Franc Strength Index stood at 94.64 (Slightly Bearish) by 1000 GMT. The pair is facing strong resistance around 0.98825 (233- 4H MA) and any break above will take it to next level till 0.9945/1.000. On the lower side, major support stands at 0.9705 (Oct 13th 2017 low) and any break below will drag it till 0.9655 (61.8% fibo)/0.9600.

AUD/USD: The Australian dollar stalled a modest recovery attempt just above the 0.7600 handle, as the greenback rallied after the U.S. Senate approved a tax overhaul at the weekend. The Aussie trades 0.1 percent down at 0.7602, having hit a low of 0.7551 on Friday; it’s lowest since Nov. 21. FxWirePro's Hourly Aussie Strength Index stood at 73.46 (Slightly Bullish) by 1000 GMT. On the lower side, the near term support is around 0.7530 and any broke below will drag the pair till 0.7500/0.7435. The near-term resistance is around 0.7640 (trend line resistance) and any break above targets 0.7680/0.7730/0.7780.

Equities Recap

European shares advanced, led higher by bank and autos stocks, while the greenback rallied after the U.S. Senate passed a tax package delivering significant fiscal stimulus.

The pan-European STOXX 600 index advanced 0.8 percent to 386.99 points, while the FTSEurofirst 300 index rallied 0.9 percent to 1,520.66 points.

Britain's FTSE 100 trades 0.8 percent higher at 7,359.20 points, while mid-cap FTSE 250 gained 0.7 percent to 19,987.36 points.

Germany's DAX rose 1.3 percent at 13,030.49 points; France's CAC 40 trades 0.9 percent up at 5,367.50 points.

Commodities Recap

Crude oil prices declined after U.S. shale drillers added two oil rigs in the week to Dec. 1, but an extension of output cuts agreed to last week by OPEC and other producers supported prices. International benchmark Brent crude was trading 0.5 percent down at $63.30 per barrel by 0922 GMT, having hit a high of $64.30 on Friday, its highest since Nov. 8. U.S. West Texas Intermediate was trading 0.9 percent lower at $57.80 a barrel, after rising as high as $58.86 on Friday, its highest since Nov. 27.

Gold prices slumped as the dollar gained on expectations that the United States' economy will expand further after the Senate passed a bill to overhaul the country's tax system. Spot gold was 0.5 percent down at $1,273.50 an ounce by 0927 GMT, having declined to its lowest since Nov. 14 at $1,270.25 on Thursday. U.S. gold futures were down 0.5 percent at $1,275.80 an ounce.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.397 percent higher by 0.034 bps, while 5-year yield was 0.031 bps up at 2.149 percent.

The German 10-year bond yields traded 0.036 bps higher at 0.336 percent and the yield on short-term 2-year traded 0.024 basis point up at -0.707 percent.

The yield on the UK benchmark 10-year gilts rose 0.051 basis points to 1.274 percent, while the yield on the short-term 2-year traded 0.047 basis points higher at 0.509 percent.

The Japanese government bond prices declined, taking cues from a fall in U.S. Treasuries after the U.S. Senate approved a tax overhaul. The 10-year JGB yield rose 0.5 basis point to 0.035 percent. The price of the benchmark 10-year JGB futures dropped 0.09 point to 150.93. The 20-year yield rose 1.0 basis point to 0.580 percent while the 30-year bond yield also ticked up 1.0 basis point to 0.840 percent.

The Australian government bond futures eased, with the three-year bond contract and the 10-year contract down 2 ticks each at 98.030 and 97.4350 respectively. The New Zealand government bonds eased, sending yields 4 basis points higher at the long end of the curve.

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2017-12-18 08:05:21
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2017-12-18 08:01:28
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2017-12-18 08:00:58
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December 18 01:30 UTC Released

CNChina House Prices YY*

Actual

5.1 %

Forecast

Previous

5.4 %

December 18 00:30 UTC Released

AUNew Motor Vehicle Sales m/m*

Actual

0.1 %

Forecast

Previous

January 9 11:00 UTC 3180331803m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3180331803m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3180331803m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3180331803m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3180331803m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3180331803m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

December 12 09:30 UTC 86088608m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 86088608m

GBPPI Input Prices MM NSA

Actual

Forecast

Previous

1 %

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