Market Roundup
- EUR/USD 0.34%, USD/JPY -0.5%, GBP/USD 0.02%, EUR/GBP 0.3%
- DXY -0.29%, DAX 0.01%, FTSE -0.02%, Brent 0.92%, Gold 0.42%
- Cheap ECB cash still key for eurozone economy: Draghi
- Ireland says not ready to let Brexit talks move on to trade
- Under pressure, Britain's May tries to reassure EU on money
- Britain's government to push ahead with plan on specific Brexit date
- Entrenched positions keep German party deal out of reach
- EZ Sept Current Account NSA, EUR 41.8B vs 29.6B, revised 30.8B
- EZ Sept Current Account SA, EUR 37.8B vs 34.5B
- BOJ stimulus exit made hard by Abe's election win - former policymaker
- China sets sweeping new rules to regulate asset management products
- Oil set for first weekly fall in six on oversupply
- Gold gains on jitters over probe into Trump's campaign
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Department of Commerce is expected to report that housing starts increased to 1.185 million units in October from 1.127 million units in September.
- (0830 ET/1330 GMT) The U.S. building permits are likely to have increased to a 1.247 million-unit pace in October from a 1.225 million-unit pace in September.
- (0830 ET/1330 GMT) The Statistics Canada is expected to report that annual inflation rate eased to 1.4 percent in October from 1.6 percent in September, still within the Bank of Canada’s 2 percent target. While core consumer price index edged up 0.1 percent in September.
- (1000 ET/1500 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of November. The indicator stood at 20 in the previous month.
- (1200 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0945 ET/1445 GMT) FedTrade Operation 30-year Fannie Mae / Freddie Mac (max $1.650 bn)
FX Beat
DXY: The dollar index declined, undermined by a Wall Street Journal report that investigators into possible Russian interference in last year's U.S. presidential election had subpoenaed President Donald Trump's election campaign for documents. The greenback against a basket of currencies traded 0.3 percent down at 93.68, having touched a low of 93.40 on Wednesday, its lowest since Oct. 20. FxWirePro's Hourly Dollar Strength Index stood at -51.32 (Bearish) by 1000 GMT.
EUR/USD: The euro rallied above the 1.1800 handle on the back of upbeat Eurozone current account data, combined with the ongoing German coalition talks that may be extended well into Saturday. The European currency traded 0.3 percent up at 1.1802, having touched a high of 1.1860 on Wednesday; its highest since Oct. 13. FxWirePro's Hourly Euro Strength Index stood at 39.53 (Neutral) by 1000 GMT. The major resistance is at 1.1880 (Oct 12th, 2017 high) and any break above will take the pair to next level till 1.1928/1.1200. On the lower side, major support is around 1.17360 (100- day MA) and any break below will drag it to next level till 1.1700/1.1660/1.1600/1.1553 (Nov 7th, 2017 low).
USD/JPY: The dollar slumped to 4-week lows, amid the latest U.S. political concerns, wherein Trump’s campaign has been ordered to turn over information to Mueller’s investigation. The major was trading 0.4 percent down at 112.56, having hit a low of 112.39 earlier, its lowest since Oct. 19. FxWirePro's Hourly Yen Strength Index stood at 71.64 (Bullish) by 1000 GMT. On the lower side, any close below 112.20 (233- day MA) confirms minor weakness, a decline till 111.60 (55- day EMA)/111.13 likely. Any convincing close above 114.50 (161.8% fib) confirms minor bullishness, a jump till 116 likely.
GBP/USD: Sterling advanced to a 2-week peak as the dollar weakened, in response to renewed U.S. political concerns surrounding Trump’s election campaign and Russia probe. Moreover, upbeat UK retail sales released yesterday and hawkish comments delivered by the BoE Chief Carney continued to boost the sentiment around the pound. Sterling traded 0.3 percent up at 1.3238, having hit a high of 1.3260 earlier, its highest since Nov. 2. FxWirePro's Hourly Sterling Strength Index stood at 123.36 (Highly Bullish) by 1000 GMT. The pair breaks major resistance at 1.3230 (61.8% retracement of 1.3320 and 1.30390) and any daily close above will take it to next level till 1.3300/ 1.3380. On the lower side, near-term support is around 1.31750 and any break below will drag it to next level till 1.3130/ 1.3100/ 1.3060/1.30270. Against the euro, the pound was trading 0.2 percent up at 89.07 pence, having hit a low of 90.14 pence on Wednesday, its lowest since Oct. 20.
USD/CHF: The Swiss franc gained, reversing some of its previous session losses, as the greenback declined amid renewed U.S. political worries surrounding Trump’s election campaign. The major trades 0.3 percent down at 0.9914, having touched a low of 0.9846 on Wednesday, it’s lowest since Oct. 24. FxWirePro's Hourly Swiss Franc Strength Index stood at -10.67 (Neutral) by 1000 GMT. The near-term support is around 0.9850 (233- day MA) and any convincing break below will drag the pair to next level till 0.9805 (38.2% retracement of 0.9420 and 1.00390)/0.9770. The major resistance is around 0.9947 (20- day MA) and any break above will take it to next level till 0.9980/1.000/1.0040.
AUD/USD: The Australian dollar tumbled to near 5-month lows despite renewed U.S. Dollar selling bias, mild positive trading sentiment around commodity space, and subdued U.S. Treasury bond yields. The Aussie trades 0.6 percent down at 0.7543 having hit a low of 0.7541 earlier; it’s lowest since Jun. 23. FxWirePro's Hourly Aussie Strength Index stood at -77.38 (Slightly Bearish) by 1000 GMT. On the lower side, the near term support is around 0.7540 and any broke below will drag the pair till 0.7500/ 0.7435. The near-term resistance is around 0.7617 (5- day MA) and any break above targets 0.7650/ 0.7680/ 0.7730/ 0.7780.
Equities Recap
European shares tumbled, weighed down by disappointing company updates, while the dollar slumped to 4-week lows against the yen on the latest U.S. political concerns.
The pan-European STOXX 600 index fell 0.3 percent to 384.05 points, while the FTSEurofirst 300 index slumped 0.3 percent to 1,509.52 points.
Britain's FTSE 100 trades 0.3 percent lower at 7,365.41 points, while mid-cap FTSE 250 declined 0.4 percent to 19,766.90 points.
Germany's DAX eased 0.1 percent at 13,033.18 points; France's CAC 40 trades 0.2 percent down at 5,324.17 points.
Commodities Recap
Crude oil prices rose but remained poised for their first week of losses in six, as concerns grew over Russia's support for an extension of the crude output cuts that have supported prices in recent months. International benchmark Brent crude was trading 0.8 percent up at $61.89 per barrel by 1010 GMT, having hit a low of $61.06 on Thursday, its lowest since Nov. 3. U.S. West Texas Intermediate was trading 1.2 percent up at $55.92 a barrel, after falling as low as $54.89 on Tuesday, its lowest since Nov. 3.
Gold prices rallied as the dollar weakened following a report that U.S. President Donald Trump's 2016 election campaign was subpoenaed for documents containing specified Russian keywords from more than a dozen officials. Spot gold was 0.4 percent up at $1,283.18 per ounce by 1012 GMT, having gained about 0.5 percent for the week and set to post a second straight weekly gain. U.S. gold futures for December delivery rose 0.3 percent to $1,281.80.
Treasuries Recap
The U.S. Treasuries remained flat as investors remained sidelined in any major trading activity amid a silent session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasuries hovered around 2.36 percent, the super-long 30-year bond yields steady at 2.81 percent and the yield on short-term 2-year note traded 1 basis point higher at 1.72 percent.
The German bunds lost ground on the last trading day of the week after European Central Bank President Mario Draghi delivered an optimistic speech at the Frankfurt European Banking Congress today. The German 10-year bond yields, which move inversely to its price, jumped 1-1/2 basis points to 0.38 percent, the yield on the 30-year note rose nearly 1 basis point to 1.27 percent and the yield on short-term 2-year traded 2 basis points higher at -0.69 percent.
The New Zealand government bonds closed lower on as investors cashed in profits after long rally this week. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2 basis points to 2.885 percent, the yield on 20-year note also climbed 2 basis points to 3.450 percent and the yield on short-term 2-year ended 2 basis points higher at 2.025 percent.
The Japanese government bonds traded narrowly mixed on after the BOJ bought fewer bonds than in a previous operation. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.045 percent, the yield on long-term 40-year rose nearly 1 basis point to 0.984 percent and the yield on short-term 2-year declined 1/2 basis point to -0.192 percent.
The Australian bonds rise slightly on the last day of the week as investors moved away from riskier assets including equities and crude oil. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.591 percent, the yield on the long-term 30-year note also dipped 1 basis point to 3.371 percent and the yield on short-term 2-year declined 1 basis point to 1.793 percent.
