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Europe Roundup: Sterling hits 2-month high on Brexit breakthrough hopes, dollar eases on U.S. government shutdown worries, European shares gain - Wednesday, November 29th, 2017

Market Roundup

  • EUR/USD -0.03%, USD/JPY 0.09%, GBP/USD 0.49%, EUR/GBP -0.52%
     
  • DXY 0.01%, DAX 0.97%, FTSE -0.56%, Brent -0.86%, Gold 0.06%
     
  • EZ Business Climate Nov, 1.49, 1.53 forecast, 1.44 previous
     
  • EZ Economic Sentiment Nov, 114.6, 114.6 forecast, 114.0 previous
     
  • EZ Industrial Sentiment Nov, 8.2, 8.7 forecast, 7.9 previous
     
  • EZ Services Sentiment Nov, 16.3, 16.8 forecast, 16.2 previous
     
  • EZ Consumer Confidence Final Nov, 0.1, 0.1 forecast, -1.1 previous
     
  • EZ Cons Inflation Expectations Nov, 16.0, 14.7 previous
     
  • EZ Selling Price Expectations Nov, 11.1, 8.6 previous
     
  • German inflation accelerates in November, state data suggest
     
  • Euro zone stability risks contained but remain aplenty: ECB
     
  • France Consumer Spending MM Oct, -1.9%, -0.1% forecast, 0.9% previous
     
  • France GDP Detailed QQ Q3, 0.50%, 0.50% forecast, 0.50% previous
     
  • Great Britain BOE Consumer Credit Oct, 1.451B, 1.500B forecast, 1.606B previous
     
  • Great Britain Mortgage Lending Oct, 3.392B, 3.600B forecast, 3.848B previous
     
  • Great Britain Mortgage Approvals Oct, 64.575k, 65.000k forecast, 66.232k previous
     
  • Great Britain M4 Money Supply Oct, 0.6%, -0.2% previous
     
  • BOJ's Nakaso says c.bank has tools, expertise to exit easy policy
     
  • Oil falls on uncertainty over OPEC deal, rise in US inventories
     
  • Gold price firms on softer dollar but narrow range holds

Economic Data Ahead

  • (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that gross domestic product increased at a 3.2 percent annual rate in the third quarter after surging at a 3.1 percent pace in the second quarter.
     
  • (0830 ET/1330 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) prices for the third quarter. The indicator is expected to rise 1.5 percent, while core PCE is likely to increase 1.4 percent after gaining 1.3 percent in the previous quarter.
     
  • (1000 ET/1500 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 1.0 percent in October after staying flat in September.
     
  • (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending November 24.
     
  • (1400 ET/1900 GMT) The Fed issues its Beige Book, a summary of anecdotes on the health of the economy.
     
  • (1645 ET/2145 GMT) The Statistics New Zealand releases building permits seasonally adjusted data for the month of October. The index posted a decline of 2.3 percent in September.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Economy, Trade, and Industry will release preliminary Industrial Production for the month of October. The indicator posted a final reading of -1.0 percent in the prior month.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending November 24.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending November 24.
     

Key Events Ahead

  • (0830 ET/1330 GMT) New York Fed chief William Dudley participates in a "fireside chat" moderated discussion on "Prospects for the National and Regional Economy" with local business, education and government leaders, in New Brunswick, New Jersey. 
     
  • (0900 ET/1400 GMT) Bank of England Governor Mark Carney speaks at a discussion in London
     
  • (0945 ET/1445 GMT) Bank of England Deputy Governor David Ramsden speaks at a discussion in London
     
  • (1000 ET/1500 GMT) Federal Reserve Chair Janet Yellen testifies on the U.S. economic outlook before the Congressional Joint Economic Committee in Washington
     
  • (1350 ET/1850 GMT) Federal Reserve Bank of San Francisco President John C. Williams gives the keynote address at the 54th Annual Economic Forecast Luncheon sponsored by the Arizona State University, in Phoenix.
     

FX Beat

DXY: The dollar index continued to trade within narrow ranges amid increasing worries of a government shutdown after Democratic leaders in U.S. Congress on Tuesday skipped a meeting with Trump that was to have focused on the budget. The greenback against a basket of currencies traded flat at 93.26, having touched a low of 92.50 on Monday, its lowest since Sept. 25. FxWirePro's Hourly Dollar Strength Index stood at 83.22 (Slightly Bullish) by 1000 GMT.

EUR/USD: The euro rose after falling for two consecutive sessions, as the greenback eased on worries over a possible U.S. government shutdown after Democrats pulled out of a meeting with President Donald Trump. The European currency traded 0.2 percent up at 1.1856, having touched a high of 1.1961 on Monday, its highest since Sept. 22. FxWirePro's Hourly Euro Strength Index stood at -22.34 (Neutral) by 1000 GMT. The pair is facing resistance at 1.18850 and any break above will take the pair to next level till 1.1928/1.19615. On the lower side, near-term support is around 1.18250 and any violation below will drag it to next level till 1.18000/1.17730/1.1755 (50- day MA).

USD/JPY: The dollar struggled to post a recovery as renewed geopolitical tensions over the Korean peninsula and worries over U.S. government shutdown weighed heavily on the greenback. The major was trading flat at 111.47, having hit a low of 110.84 on Monday, its lowest since Sept. 15. FxWirePro's Hourly Yen Strength Index stood at 4.48 (Neutral) 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 111.65 (233- day MA) will take the pair to next level till 112.05/112.70/113.36 likely.

GBP/USD: Sterling rallied to a 2-month high above the 1.3400 handle as investors cheered on news reports that Britain and the European Union had agreed on the outlines of a Brexit settlement bill potentially paving the way to a future trade pact. However, the upside appears limited as the Irish border issue remains a key risk for Brexit talks to move ahead next month. Sterling traded 0.5 percent up at 1.3403, having hit a high of 1.3430 earlier, it’s highest since Sept. 29. FxWirePro's Hourly Sterling Strength Index stood at 59.85 (Bullish) by 1000 GMT. The pair was facing strong resistance at 1.3400 and any convincing break above will take the pair to next level till 1.3435/1.3500 level. On the lower side, near-term support is around 1.3350 and any break below will drag it to next level till 1.3300/1.3230/1.3175. Against the euro, the pound was trading 0.4 percent up at 88.38 pence, having hit a high of 89.34 pence earlier, it’s highest since Nov. 10.

USD/CHF: The Swiss franc declined, extending losses for the third straight session, as investors attention turned their attention towards the Federal Reserve Chair Janet Yellen's testimony before the Congressional Joint Economic Committee in Washington. The major trades 0.1 percent up at 0.9840, having touched a high of 0.9852 the day before, it’s highest since Nov. 22. FxWirePro's Hourly Swiss Franc Strength Index stood at -111.20 (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 the pair to lower level till 0.9745/0.9705. The near-term resistance is around 0.9840 (233- day MA) and any convincing close above will take it to next level till 0.9875/0.9900.

AUD/USD: The Australian dollar slumped for the fourth straight session, as Goldman Sach's bearish iron ore price forecasts weakened the bid tone around the major. The Aussie trades 0.2 percent down at 0.7575, having hit a low of 0.7574 earlier; it’s lowest since Nov. 22. FxWirePro's Hourly Aussie Strength Index stood at -143.23 (Highly Bearish) 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 (trendline resistance) and any break above targets 0.7680/0.7730/0.7780.

Equities Recap

European shares advanced, underpinned by strength among financial stocks and gains across all sectors, while sterling rallied to a 2-month high as Britain and the European Union inched closer to Brexit financial deal.

The pan-European STOXX 600 index gained 0.6 percent to 389.24 points, while the FTSEurofirst 300 index rallied 0.5 percent to 1,530.13 points.

Britain's FTSE 100 trades 0.5 percent lower at 7,421.22 points, while mid-cap FTSE 250 climbed 0.3 percent to 20,085.83 points.

Germany's DAX rose 0.6 percent at 13,145.03 points; France's CAC 40 trades 0.5 percent up at 5,416.45 points.

Commodities Recap

Crude oil prices slumped, extending previous session losses on the back of doubts that OPEC and Russia will agree on an extended crude production cut that the market has priced in. International benchmark Brent crude was trading 0.6 percent down at $62.98 per barrel by 1015 GMT, having hit a high of $63.96 on Monday, its highest since Nov. 10. U.S. West Texas Intermediate was trading 0.4 percent lower at $57.49 a barrel, after rising as high as $59.02 on Friday, its highest since June 2015.

Gold prices edged higher amid a weaker dollar, while North Korea's latest missile test had little impact on the currency markets. Spot gold was 0.1 percent up at $1,294.14 an ounce at 1022 GMT, having hit a high of $1,299.10 an ounce on Monday, its highest since Oct. 16. U.S. gold futures were up 0.1 percent at $1,295.50.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.343 percent higher by 0.007 bps, while 5-year yield was 0.005 bps up at 2.071 percent.

The German 10-year bond yields traded 0.023 bps higher at 0.364 percent and the yield on short-term 2-year traded 0.012 basis point higher at -0.683 percent.

The yield on the UK benchmark 10-year gilts rose 0.065 basis points to 1.319 percent, while the yield on the short-term 2-year traded 0.053 basis points higher at 0.522 percent.

The Japanese government bond prices inch up as tensions on the Korean peninsula provided mild support. The benchmark 10-year JGB yield dipped half a basis point to 0.030 percent, while the 20-year yield declined by a basis point to 0.570 percent.

The Australian government bond futures were mixed, with the three-year bond contract up 1 tick at 98.100. The 10-year contract was flat at 97.490. The New Zealand government bonds gained, sending yields about 3 basis points lower across the long-end and 2 basis points lower at the short-end of the curve.

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December 15 21:00 UTC Released

USOverall Net Capital Flows

Actual

151.2 Bln USD

Forecast

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-51.3 Bln USD

December 15 21:00 UTC Released

USNet L-T Flows,Incl.Swaps

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7.9 Bln USD

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Previous

65.1 Bln USD

January 9 11:00 UTC 3420334203m

BRRetail Sales MM*

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0.35 %

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January 9 11:00 UTC 3420334203m

BRRetail Sales YY*

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3.20 %

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January 9 11:00 UTC 3420334203m

BRRetail Sales YY*

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3.20 %

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January 9 11:00 UTC 3420334203m

BRRetail Sales YY*

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3.20 %

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January 9 11:00 UTC 3420334203m

BRRetail Sales MM*

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Forecast

0.35 %

Previous

January 9 11:00 UTC 3420334203m

BRRetail Sales YY*

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Forecast

3.20 %

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December 12 09:30 UTC 62086208m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 62086208m

GBPPI Input Prices MM NSA

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Forecast

Previous

1 %

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