Market Roundup
- United Kingdom Oct 2018 UK finance mortgage apps increase to 39.697 no. of vs previous 38.712 no. of (revised from 38.505 no. of)
- Germany Nov 2018 IFO expectations new decrease to 98.7 (forecast 99.2 ) vs previous 99.8
- Germany Nov 2018 IFO current conditions new decrease to 105.4 (forecast 105.3 ) vs previous 105.9
- Germany Nov 2018 IFO business climate new decrease to 102 (forecast 102.3 ) vs previous 102.8
Economic Data Ahead
- (0830 ET/1330 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of October. The index stood at 0.17 in the prior month.
- (1030 ET/1530 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of November. The index posted a rise of 29.4 percent in the previous month.
Key Events Ahead
- (0700 ET/1200 GMT) Austrian Central Bank Governor Ewald Nowtny delivers opening speech at ONB conference on European Economic Integration in Vienna
- (0900 ET/1400 GMT) The President of the ECB, Mario Draghi, addresses the European Parliament in Brussels
- (1100 ET/1600 GMT) Introductory statement by the ECB President Mario Draghi in his capacity as ESRB Chair at ECON Hearing at the European Parliament in Brussels, Belgium
- (1330 ET/1830 GMT) Fed's New York Executive Vice President Richard Dzina speaks at The Clearing House and Bank Policy Institute's 2018 Annual Conference in New York
FX Beat
DXY: The dollar index declined as the euro and sterling gained strength on easing geopolitical concerns. The greenback against a basket of currencies trades 0.2 percent down at 96.74, having touched a high of 97.03 earlier, its highest since Nov 16. FxWirePro's Hourly Dollar Strength Index stood at 4.0 (Neutral) by 1100 GMT.
EUR/USD: The euro rebounded from a 1-week low on news that Italy's governing coalition may reduce next year's budget deficit target to as low as 2 percent of gross domestic product to avoid a disciplinary action from Brussels. The European currency traded 0.3 percent up at 1.1367, having touched a low of 1.1326 earlier, its lowest since Nov. 16. FxWirePro's Hourly Euro Strength Index stood at -62.79(Bearish) by 1100 GMT. Immediate resistance is located at 1.1416 (October 29 High), a break above targets 1.1446 (November 8 High). On the downside, support is seen at 1.1317 (November 9 Low), a break below could drag it till 1.1270 (November 15 Low).
USD/JPY: The dollar rallied to an over 1-week peak as U.S. President Donald Trump and Chinese President Xi Jinping are expected to discuss contentious trade matters at the G20 meeting in Buenos Aires on Nov. 30, which would have an impact on currencies that have close trading ties with China. The major was trading 0.2 percent up at 113.20, having hit a high of 113.35 earlier, its highest since November 16. FxWirePro's Hourly Yen Strength Index stood at -89.29 (Slightly Bearish) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, as the Chicago Fed National Activity Index and Dallas Fed manufacturing business index. Immediate resistance is located at 113.38 (October 31 High), a break above targets 113.81 (November 7 High). On the downside, support is seen at 112.64 (November 16 Low), a break below could take it lower 112.14 (October 19 Low).
GBP/USD: Sterling surged, reversing some of its previous session losses after the European Union sealed a Brexit deal; however, doubts about Prime Minister Theresa May getting the agreement through a divided British parliament limited the upside. The major traded 0.4 percent up at 1.2853, having hit a high of 1.2926 on Thursday; it’s highest since November 15. FxWirePro's Hourly Sterling Strength Index stood at 135.97 (Highly Bullish) 1100 GMT. Immediate resistance is located at 1.2946 (November 12 High), a break above could take it near 1.2990 (October 24 High). On the downside, support is seen at 1.2764 (November 21 Low), a break below targets 1.2723 (November 14 Low). Against the euro, the pound was trading 0.05 percent down at 88.46 pence, having hit a high of 88.36 on Friday, it’s highest since Nov. 16
USD/CHF: The Swiss franc eased to a 1-week low as risk appetite improved after the European Union and Britain agreed a Brexit deal and signs that Italy is willing to revise its 2019 budget plans. The major trades 0.05 percent up at 0.9970, having touched a high of 0.9984; it’s highest since Nov. 19. FxWirePro's Hourly Swiss Franc Strength Index stood at -71.66 (Bearish) by 1100 GMT. On the higher side, near-term resistance is around 0.9990 (Oct. 24 High) and any break above will take the pair to next level till 1.0050 (Nov. 7 High). The near-term support is around 0.9897 (October 17 Low), and any close below that level will drag it till 0.9847 (October 15 Low).
Equities Recap
European shares rallied on reports that Italy could lower its budget deficit target to avoid a disciplinary procedure from Brussels.
The pan-European STOXX 600 index rallied 1.1 percent at 358.01 points, while the FTSEurofirst 300 index gained 1.1 percent to 1,409.33 points.
Britain's FTSE 100 trades 0.9 percent up at 7,020.99 points, while mid-cap FTSE 250 surged 0.8 percent to 18,692.53 points.
Germany's DAX rose 1.1 percent at 11,317.41 points; France's CAC 40 trades 1.2 percent higher at 5,004.50 points.
Commodities Recap
Crude oil prices surged over 1 percent, recovering some losses from a nearly 8-percent plunge in the previous session, amid generally weak financial markets. International benchmark Brent crude was trading 1.1 percent up at $59.80 per barrel by 1032 GMT, having hit a low of $58.47 on Friday, its lowest since October 2017. U.S. West Texas Intermediate was trading 1.4 percent up at $51.07 a barrel, after falling as low as $50.14, its lowest since the October 2017.
Gold prices rose amid worries about a slowdown in the global economy, exacerbated by a sharp decline in oil prices. Spot gold rose 0.4 percent to $1,226.28 per ounce by 1038 GMT, having hit a high of $1229.93 on Wednesday, its highest since Nov. 7. U.S. gold futures for December delivery settled down $4.80, or 0.4 percent, at $1,223.20.
Treasuries Recap
The U.S. Treasuries traded flat during late afternoon session amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasuries remained tad higher at 3.061 percent, the super-long 30-year bond yields traded flat at 3.310 percent and the yield on the short-term 2-year remained nearly 1 basis point higher at 2.828 percent.
The United Kingdom’s gilts took a downturn during the afternoon session ahead of the Bank of England (BoE) Governor Mark Carney’s speech, scheduled to be held later today and amid Brexit uncertainties still making headlines. The yield on the benchmark 10-year gilts, jumped nearly 2 basis points to 1.399 percent, the super-long 30-year bond yields also climbed 2 basis points to 1.954 percent and the yield on the short-term 2-year too traded 2 basis points higher at 0.757 percent.
The German bunds plunged during European session after investors have largely shrugged-off the lower-than-expected Ifo business climate index for the month of November, released today. The German 10-year bond yields, which move inversely to its price, jumped nearly 2-1/2 basis points to 0.361 percent, the yield on 30-year note climbed 2 basis points to 1.012 percent while the yield on short-term 2-year traded flat at -0.637 percent.
The Japanese government bonds remained flat during Asian session ahead of the country’s retail sales and industrial production data for the month of October, scheduled to be released on November 28 and 29 respectively by 23:50GMT. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad higher at 0.089 percent, the yield on the long-term 30-year note hovered around 0.825 percent and the yield on short-term 2-year too remained nearly flat at -0.143 percent.
The Australian government bonds gained on the first trading day of the week as a fall in global crude oil prices weighed on the country’s inflation outlook, leading to a crowd in safe-haven instruments. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 2.643 percent, the yield on the long-term 30-year bond fell nearly 2 basis points to 3.160 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at 2.033 percent.
