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Europe Roundup: Sterling falls below 1.3300 on renewed Brexit concerns, dollar steadies above 2-month low ahead of Fed chair nominee Powell's confirmation hearing, European shares gain - Tuesday, November 28th, 2017

Market Roundup

  • EUR/USD -0.08%, USD/JPY 0.2%, GBP/USD -0.08%, EUR/GBP 0.01%
     
  • DXY 0.13%, DAX 0.33%, FTSE 0.55%, Brent -0.86%, Gold -0.06%
     
  • Germany Import Prices MM Oct, 0.6%, 0.6% forecast, 0.9% previous
  • Germany Import Prices YY Oct, 2.6%, 2.6% forecast, 3.0% previous
     
  • France Consumer Confidence Nov 102, 101 forecast, 100 previous
     
  • EZ Money-M3 Annual Growth Oct, 5.0%, 5.1% forecast, 5.1% previous
  • EZ Loans to Households Oct, 2.7%, 2.7% previous
     
  • EZ Loans to Non-Financial Oct, 2.9%, 2.4% forecast, 2.5% previous
     
  • No more pain for UK banks in 2017 BoE tests, but Brexit risks ahead
     
  • Japan govt keeps view that moderate economic recovery continuing
     
  • Tough OPEC meeting looms amid spectre of oil deficit
     
  • Oil falls on doubts over OPEC, pipeline restart
     
  • Gold inches lower; Fed chair hearing, US tax reforms in focus

Economic Data Ahead

  • (0830 ET/1330 GMT) The U.S. Census Bureau is likely to report that preliminary wholesale inventories rose 0.5 percent in December after posting a gain of 0.3 percent in November.
     
  • (0830 ET/1330 GMT) The United States releases goods trade balance data for the month of October. The economy recorded a trade deficit of $64.14 billion in the previous month.
     
  • (0830 ET/1330 GMT) The Statistics Canada releases its Raw Material Price Index for the month of October. The index posted a decline of 0.1 percent in September.
     
  • (0830 ET/1330 GMT) The Statistics Canada will report its industrial producer prices for the month of October. The indicator fell 0.3 percent in the prior month.
     
  • (0900 ET/1400 GMT) The S&P/Case-Shiller is expected to report that U.S. home price index of 20 metropolitan areas rose at an annualized rate of 6.1 percent in September, compared with a 5.9 percent increase in August.
     
  • (1000 ET/1400 GMT) The U.S. Conference Board is likely to show a decline in its consumer confidence index for the month of November to 124.0 from a final reading of 125.9 in October.
     
  • (0900 ET/1400 GMT) The Federal Housing Finance Agency releases its housing price index for the month of September. The index gained 0.7 percent in August.
     
  • (1000 ET/1500 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for November. The index posted a rise of 12 in the prior month.
     
  • (1030 ET/1530 GMT) The Bank of Canada will release its financial system review.
     
  • (1500 ET/2000 GMT) The Reserve Bank of New Zealand will release its Financial Stability Report.
     
  • (1630 ET/2030 GMT) API reports its weekly crude oil stock.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Economy, Trade, and Industry releases retail trade data for the month of October. The indicator is likely to post an annualized fall of 0.2 percent after advancing 2.2 percent in the prior month.

Key Events Ahead

  • (0915 ET/1415 GMT) New York Federal Reserve President William Dudley gives welcome and introductory remarks before conference, "The Evolving Structure of the U.S. Treasury Market," co-sponsored by the Federal Reserve Bank of New York, the U.S. Treasury Department, the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission in New York.
     
  • (0945 ET/1445 GMT) The Senate Banking Committee holds a hearing on the nomination of Jerome Powell to be chairman of the U.S. Federal Reserve Board.
     
  • (1015 ET/1515 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on "Financial Safety for the Aging Population" before the "Aging, Cognition, and Financial Health: Building a Robust System for Older Americans" conference hosted by the Federal Reserve Bank of Philadelphia.
     
  • (1130 ET/1630 GMT) Bank of Canada Governor Stephen S. Poloz's speech.
     
  • (1545 ET/2045 GMT) Treasury Secretary Steven Mnuchin, Securities and Exchange Commission Chairman Jay Clayton and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo will be speaking at the "The Evolving Structure of the U.S. Treasury Market" conference in New York.
     

FX Beat

DXY: The dollar index extended previous session's rebound as investors attention shifted on the Fed Chair Designate Jerome Powell's testimony before the Senate Committee and the U.S. Treasury Secretary Steven Mnuchin's scheduled speech. The greenback against a basket of currencies traded 0.2 percent up at 93.07, having touched a low of 92.50 on Monday, its lowest since Sept. 25. FxWirePro's Hourly Dollar Strength Index stood at 38.73 (Neutral) by 1000 GMT.

EUR/USD: The euro eased below the 1.1900 handle, amidst some recovery in the sentiment surrounding the greenback. However, the downside was limited as data showed growth in eurozone corporate lending jumped in October to its fastest rate since the global financial crisis. The European currency traded 0.1 percent down at 1.1883, having touched a high of 1.1961 in the prior session, its highest since Sept. 22. FxWirePro's Hourly Euro Strength Index stood at 28.55 (Neutral) by 1000 GMT. The pair is facing major psychological resistance at 1.2000 and any break above will take it to next till 1.20900. On the lower side, near-term support is around 1.18800 (Resistance turned into support) and any break below will drag it down till 1.1865 (23.6% fibo)/1.1810 (10- day MA).

USD/JPY: The dollar rebounded from a 2-month low touched in the previous session, as investors shifted their focus on the confirmation hearing for Federal Reserve chair nominee Jerome Powell on Tuesday and Senate vote on a U.S. tax plan later in the week. The major was trading 0.2 percent up at 111.29, having hit a low of 110.84 on Monday, its lowest since Sept. 15. FxWirePro's Hourly Yen Strength Index stood at 94.67 (Slightly Bullish) 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 112 (233- day MA) will take the pair to next level till 112.70/113.36 likely.

GBP/USD: Sterling slumped below the 1.3300 handle, weighed down by the comments from the Irish Foreign Minister Coveney, citing that he is confident the senior EU officials won’t proceed with the next phase of the Brexit negotiations unless there is some clarity on the Irish border issue. The major traded 0.2 percent down at 1.3293, having hit a high of 1.3383 on Monday, it’s highest since Oct. 2. FxWirePro's Hourly Sterling Strength Index stood at -24.09 (Neutral) by 1000 GMT. The pair is facing strong resistance at 1.3400 and any break above will take it to next level till 1.3435/1.3500 level. On the lower side, near-term support is around 1.3230 and any break below will drag it to next level till 1.3175/1.3130/1.3100/1.3060/1.30270. Against the euro, the pound was trading 0.05 percent down at 89.36 pence, having hit a low of 89.66 pence the prior session, it’s lowest since Nov. 16.

USD/CHF: The Swiss franc fell to a 6-day low as the greenback gained ahead of the Fed Chair-Designate Powell’s testimony. The major trades 0.2 percent up at 0.9830, having touched a low of 0.9778 the day before, it’s lowest since Oct. 20. FxWirePro's Hourly Swiss Franc Strength Index stood at -122.48 (Highly Bearish) by 1000 GMT. On the lower side, near-term support is around 0.97730 (support turned into resistance) and any break below will drag it to lower level till 0.9745/0.9705. The near-term resistance is around 0.9840 (233- day MA) and any violation above will take it to next level till 0.9875/0.9900.

AUD/USD: The Australian dollar declined, extending losses for the third straight session, as an uptick in the U.S. Treasury bond yields and weaker commodity prices added to the downward pressure. The Aussie trades 0.1 percent down at 0.7596, having hit a high of 0.7644 on Monday; it’s highest since Nov. 14. FxWirePro's Hourly Aussie Strength Index stood at -64.61 (Bearish) by 1000 GMT. On the lower side, the pair’s near-term support is around 0.7590 and any broke below will drag it till 0.7530/ 0.7500/ 0.7435. The near-term resistance is around 0.7640 (trendline resistance) and any break above targets 0.7680/0.7730/0.7780.

Equities Recap

European shares rose, boosted by gains in oil and gas stocks, while greenback extended gains ahead of the Fed Chair Designate Jerome Powell's testimony before the Senate Committee.

The pan-European STOXX 600 index gained 0.4 percent to 386.22 points, while the FTSEurofirst 300 index rallied 0.5 percent to 1,520.95 points.

Britain's FTSE 100 trades 0.5 percent higher at 7,420.64 points, while mid-cap FTSE 250 climbed 0.3 percent to 19,933.67 points.

Germany's DAX rose 0.3 percent at 13,032.52 points; France's CAC 40 trades 0.4 percent up at 5,383.42 points.

Commodities Recap

Crude oil prices slumped, extending losses from the previous session, amid uncertainty over a possible extension of output cuts by major crude producers and expectations of higher supply as the Keystone pipeline restarts. International benchmark Brent crude was trading 0.8 percent down at $63.22 per barrel by 0958 GMT, having hit a high of $63.96 on Monday, its highest since Nov. 10. U.S. West Texas Intermediate was trading 0.8 percent lower at $57.54 a barrel, after rising as high as $59.02 on Friday, its highest since June 2015.

Gold prices nudged lower but held near a six-week high hit in the previous session, as investors awaited a confirmation hearing for U.S. Federal Reserve chair nominee Jerome Powell and a possible Senate vote on U.S. tax reforms. Spot gold was 0.1 percent down at $1,293.49 an ounce, as of 0959 GMT, having hit a high of $1,299.10 an ounce on Monday, its highest since Oct. 16. U.S. gold futures dipped 0.1 percent to $1,293.20.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.333 percent higher by 0.005 bps, while 5-year yield was 0.011 bps up at 2.057 percent.

The German 10-year bond yields traded 0.006 bps lower at 0.337 percent and the yield on short-term 2-year traded 0.001 basis point higher at -0.708 percent.

The yield on the UK benchmark 10-year gilts rose 0.005 basis points to 1.260 percent, while the yield on the short-term 2-year traded 0.018 basis points higher at 0.482 percent.

The longer-dated Japanese government bond prices declined, causing the yield curve to steepen slightly. The five-year yield was flat at minus 0.125 percent, while the 40-year yield rose 1.5 basis points to 1.020 percent.

The Australian government bond futures likewise gained, with the three-year bond contract up 2 ticks at 98.090. The 10-year contract rose 3 ticks to 97.4900. The New Zealand government bonds firmed in price, nudging yields down as much as 2.5 basis points.

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December 15 13:30 UTC Released

CAManufacturing Sales MM

Actual

-0.4 %

Forecast

0.8 %

Previous

0.5 %

December 15 13:30 UTC Released

USNY Fed Manufacturing

Actual

18 %

Forecast

18.6 %

Previous

19.4 %

January 9 11:00 UTC 3581935819m

BRRetail Sales MM*

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Forecast

0.35 %

Previous

January 9 11:00 UTC 3581935819m

BRRetail Sales YY*

Actual

Forecast

3.20 %

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January 9 11:00 UTC 3581935819m

BRRetail Sales YY*

Actual

Forecast

3.20 %

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January 9 11:00 UTC 3581935819m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3581935819m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3581935819m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

December 12 09:30 UTC 45924592m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 45924592m

GBPPI Input Prices MM NSA

Actual

Forecast

Previous

1 %

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