Market Roundup
- EUR/USD 0.27%, USD/JPY -0.08%, GBP/USD -0.09%, EUR/GBP 0.33%
- DXY -0.14%, DAX 0.17%, FTSE 0.66%, Brent 0.17%, Gold 0.26%
- France Retail Sales SA MM Oct, -1.00%, 0.90% previous
- France Retail Sales NSA YY Oct, -2.10%, 3.40% previous
- Germany-US yield gap near 8-month high as central bank meetings loom
- Powell faces early test of policy view as tax cuts near approval
- Britain's May hails new optimism in Brexit talks after deal
- Oil prices slip under shadow of US drilling
- Gold edges up; looming US rate hike weighs on momentum
Economic Data Ahead
- (1000 ET/1500 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of October. The report is expected to show job openings eased to 6.090 million from 6.093 million in November.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade operation 30-year Ginnie Mae (max $1.405 bn)
FX Beat
DXY: The dollar declined after rising to an over 2-week high in the previous session, weighed down by weak wage growth numbers and subdued action in the U.S. Treasury yields. The greenback against a basket of currencies traded 0.2 percent down at 93.74, having touched a high of 93.90 on Friday, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at -8.57 (Neutral) by 1000 GMT.
EUR/USD: The euro rose above the 1.1800 handle after falling for six consecutive days, as the ECB Governing Council member and Austrian Central Bank Head, Ewald Nowotny, while presenting the Austrian Financial Stability Report stated that the ECB must be careful in unwinding low-interest rates. The European currency traded 0.2 percent up at 1.1801, having touched a low of 1.1730 on Friday, its lowest since Nov. 21. FxWirePro's Hourly Euro Strength Index stood at 89.05 (Slightly Bullish) by 1000 GMT. The pair has closed slightly above 50- day MA on Friday. The pair is facing near-term resistance at 1.1814 (20- day MA) and any break above will take the pair till 1.18765 (61.8% retracement) /1.1900/ 1.19612 (Nov 27th, 2017 high).
USD/JPY: The dollar eased after rising to a near 1-month high earlier in the session, as subdued Treasury yields across curve and mixed U.S. labor market report released on Friday undermined the sentiment around the greenback. The major was trading 0.05 percent down at 113.40, having hit a high of 113.69 earlier, its highest since Nov. 14. FxWirePro's Hourly Yen Strength Index stood at -55.43 (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 114 will take the pair to next level till 114.73/115.
GBP/USD: Sterling eased, extending previous session losses, as investors turned cautious ahead of this week's Federal Reserve and Bank of England policy meeting. The major traded 0.1 percent down at 1.3366, having hit a low of 1.3319 on Thursday, it’s lowest since Nov. 28. FxWirePro's Hourly Sterling Strength Index stood at -75.62 (Slightly Bearish) by 1000 GMT. On the lower side, near-term support is around 1.3300 and any break below will drag the pair to next level till 1.3225/1.3175. The near-term resistance is around 1.3550 and any break above will take it to next level till 1.3600/1.3680. Against the euro, the pound was trading 0.4 percent down at 88.23 pence, having hit a high of 86.89 pence on Friday, it’s highest since Jun. 9.
USD/CHF: The Swiss franc rose, extending previous session gains, as the greenback eased following a drop in the U.S. Treasury yields. The major trades 0.1 percent down at 0.9915, having touched a high of 0.9977 on Friday, it’s highest since Nov. 13. FxWirePro's Hourly Swiss Franc Strength Index stood at -48.97 (Neutral) by 1000 GMT. The near-term support is around 0.9900 and any break below will drag the pair till 0.9880 (daily Kijun-Sen)/0.9840 (55- day EMA)/0.9805 (200- day EMA). On the higher side, 1.000 will be acting as major resistance and any break above will it to next level till 1.00380/1.010.
AUD/USD: The Australian dollar rose after falling to a 6-month low in the previous session, supported by the weaker tone seen around the U.S. dollar across its main peers. The Aussie trades 0.3 percent up at 0.7529, having hit a low of 0.7501 the prior session; it’s lowest since Jun. 7. FxWirePro's Hourly Aussie Strength Index stood at 47.21 (Neutral) by 1000 GMT. On the lower side, the near term support is around 0.7500 and any convincing break below will drag the pair till 0.7435/0.7380. The near-term resistance is around 0.7600 and any break above targets 0.7645/0.7680/0.7730/0.7780.
Equities Recap
European stocks rallied near 4-week highs, underpinned by gains among financial and industrial stocks, while the greenback eased from an over 2-week high hit in the previous session, amid subdued action in the U.S. Treasury yields.
The pan-European STOXX 600 index gained 0.05 percent to 389.40 points, while the FTSEurofirst 300 index rose 0.1 percent to 1,532.63 points.
Britain's FTSE 100 trades 0.6 percent higher at 7,439.16 points, while mid-cap FTSE 250 jumped 0.05 percent to 19,991.70 points.
Germany's DAX rallied 0.1 percent at 13,165.59 points; France's CAC 40 trades 0.1 percent up at 5,403.06 points.
Commodities Recap
Crude oil prices declined, as ongoing output cuts led by OPEC were countered by rising U.S. drilling activity that indicated a further increase in American production. International benchmark Brent crude was trading 0.1 percent down at $63.23 per barrel by 0929 GMT, having hit a low of $61.11 on Wednesday, its lowest since Nov. 17. U.S. West Texas Intermediate was trading 0.5 percent lower at $57.02 a barrel, after falling as low as $55.79 on Thursday, its lowest since Nov. 17.
Gold prices rose amid a weaker greenback, but lacked momentum as expectations of an increase in interest rates in the United States weighed on prices. Spot gold was 0.2 percent up at $1,250.20 an ounce, as of 0932 GMT, after hitting its lowest since July 26 at $1,243.13 last week. U.S. gold futures were 0.3 percent higher at $1,251.70.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.370 percent lower by 0.012 bps, while 5-year yield was 0.013 bps down at 2.131 percent.
The UK gilts jumped as Britons remain worried over claims that their rights have been protected by the Brexit deal sealed by Theresa May and Jean-Claude Juncker. The yield on the benchmark 10-year gilts, slumped 4-1/2 basis points to 1.23 percent, the super-long 30-year bond yields plunged 4 basis points to 1.80 percent and the yield on the short-term 2-year traded 2 basis points lower at 0.48 percent.
The German bunds traded flat as investors wait to watch the European Central Bank President Mario Draghi’s speech, scheduled to be held on December 12 by 19:00GMT. The German 10-year bond yields, which move inversely to its price, hovered around 0.30 percent, the yield on 30-year note remained flat at 1.13 percent and the yield on short-term 2-year traded nearly steady at -0.73 percent.
The Japanese government bonds inched lower slightly as investors remained optimistic about the Federal Reserve interest rate hike on Wednesday and followed by three more next year. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose ½ bais point to 0.055 percent, the yield on long-term 40-year rose nearly 1/2 basis point to 0.978 percent and the yield on short-term 2-year traded nearly flat at -0.145 percent.
The Australian government bonds slumped following weakness in the U.S. Treasuries as investors remained optimistic about December and three more rate hike by the Federal Reserve next year. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 3 basis points to 2.566 percent, the yield on the long-term 30-year note also climbed 3-1/2 basis points to 3.300 percent and the yield on short-term 2-year surged 2 basis points to 1.832 percent.
