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Europe Roundup: Sterling hits multi-week highs versus dollar and euro on EU deal optimism, euro at 1-week low as CPI misses expectations, European shares advance - Thursday, November 30th, 2017

Market Roundup

  • EUR/USD -0.14%, USD/JPY 0.4%, GBP/USD 0.35%, EUR/GBP -0.49%
     
  • DXY 0.25%, DAX 0.78%, FTSE 0.25%, Brent 1.46%, Gold -0.17%
     
  • GBP/USD recovery from Nov 28 1.3221 low reaches 1.3480
     
  • EZ Inflation, Flash YY Nov, 1.5%, 1.6% forecast, 1.4% previous
     
  • EZ Infl Ex Food & Enr Flash Nov, 1.1%, 1.0% forecast, 1.1% previous
     
  • EZ Unemployment Rate Oct, 8.8%, 8.9% forecast, 8.9% previous
     
  • Germany Unemployment Chg SA Nov, -18k, -10k forecast, -11k previous
     
  • Germany Unemployment Total NSA Nov, 2.368M, 2.389M previous
     
  • Germany Unemployment Rate SA Nov, 5.6%, 5.6% forecast, 5.6% previous
     
  • Germany Unemployment Total SA Nov, 2.476M, 2.495M previous
     
  • Germany Retail Sales YY Real Oct, -1.4%, 2.8% forecast, 4.1% previous
     
  • Great Britain Nationwide House Prices Nov, 0.1, 0.2% forecast, 0.2% previous
     
  • Great Britain Nationwide House Prices YY Nov, 2.5%, 2.7% forecast, 2.5% previous
     
  • France CPI (EU Norm) Prelim YY Nov, 1.3%, 1.3% forecast, 1.2% previous
     
  • Swiss Q3 GDP growth picks up to 0.6 q/q, 1.2% y/y, above forecast
     
  • Swiss KOF indicator rises to 110.3 in November vs revised 109.8
     
  • OPEC, allies set to agree oil cut extension to end of 2018
     
  • UK consumer sentiment sinks to 16-month low, house prices weak 
     
  • Oil edges up as OPEC signals deal extension
     
  • Gold hits one-week low as positive US data weighs

Economic Data Ahead

  • (0830 ET/1330 GMT)  The U.S. Commerce Department releases personal income figures for October, which is expected to rise 0.3 percent, after climbing 0.4 percent in the previous month.
     
  • (0830 ET/1330 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of October. The index is expected to rise at an annualized rate of 1.5 percent, while core PCE is likely to have increased 0.2 percent after rising 0.1 percent in the previous month.
     
  • (0830 ET/1330 GMT) The U.S. Personal spending is likely to rise 0.3 percent in the month of October, after surging 1.0 percent in September.
     
  • (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 1,000 to a seasonally adjusted 240,000 for the week ended Nov. 24, while continuing claims for the week ended Nov. 10 came in at 1.904 million.
     
  • (0830 ET/1330 GMT) The Statistics Canada is likely to report that current account deficit widened to C$19.50 billion in the third quarter, compared with a deficit of C$16.32 billion in the previous quarter.
     
  • (0945 ET/1445 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions rose to 63.0 in November from 66.2 last month.
     
  • (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending November 24.
     
  • (1730 ET/2230 GMT) Australian Industry Group (AiG) releases its performance of manufacturing index for the month of November. The index stood at 51.1 in October.
     
  • (1830 ET/2330 GMT) Japan's Statistics Bureau will release its National Consumer Price Index for the month of November. The index fell at an annualized rate of 0.2 percent in September.
     
  • (1830 ET/2330 GMT) Japan's Statistics Bureau is expected to report that unemployment rate remained unchanged at 2.8 percent for the month of October.
     
  • (1830 ET/2330 GMT) Japan's overall household spending probably declined at an annualized rate of 0.4 percent in October after tumbling 0.4 percent in September.

Key Events Ahead

  • (0830 ET/1330 GMT) Cleveland Fed President Loretta Mester moderates a "Financial Innovation and Macroprudential Policy" panel before the Financial Stability and Fintech Conference organized by the Federal Reserve Bank of Cleveland, the Office of Financial Research, and the University of Maryland, in Washington.
     
  • (1045 ET/1545 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.510 bn)
     
  • (1230 ET/1730 GMT) The Federal Reserve board vice chair for supervision Randal Quarles will be speaking at a conference organized by the Federal Reserve Bank of Cleveland, the Office of Financial Research, and the University of Maryland, in Washington.
     
  • (1300 ET/1800 GMT)  Federal Reserve Bank of Dallas President Robert Kaplan will participate in a moderated question-and-answer session before the Real Estate Council Speaking Series, in Dallas, Texas.

FX Beat

DXY: The dollar index advanced to a 1-week peak as investors awaited a possible Senate vote on the U.S. President Donald Trump administration's tax cut legislation and today's release of Core PCE price index and personal income/spending data. The greenback against a basket of currencies traded 0.1 percent up at 93.38, having touched a high of 93.51 earlier, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at 94.59 (Slightly Bullish) by 1000 GMT.

EUR/USD: The euro slumped to a 1-week low after data showed Eurozone's inflation rose by less than expected in November, highlighting price growth weakness in the bloc and supporting the European Central Bank's plan to remove stimulus only gradually. The bloc's inflation rose to 1.5 percent from 1.4 percent in October, missing expectations for a 1.6 percent rise. The European currency traded 0.1 percent down at 1.1830, having touched a low of 1.1809 earlier, its lowest since Nov. 22. FxWirePro's Hourly Euro Strength Index stood at -24.08 (Neutral) by 1000 GMT. The pair is facing resistance at 1.18850 and any break above will take it to next level till 1.1928/1.19615.On the lower side, near-term support is around 1.18250 and any close below will drag it to next level till 1.18000/1.17730/1.1755 (50- day MA).

USD/JPY: The dollar rallied to a 1-week peak against the yen, boosted by an upwardly revision to the U.S. Q3 GDP print, while investors awaited a possible Senate vote on the President Donald Trump administration's tax cut legislation. Moreover, investors' risk appetite strengthened after upbeat Chinese PMI prints eased concerns of an economic slowdown in the world's second-largest economy. The major was trading 0.5 percent up at 112.41, having hit a high of 112.48 earlier, its highest since Nov. 22. FxWirePro's Hourly Yen Strength Index stood at -0.51 (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 112 (233- day MA) will take the pair to next level till 112.70/113.36 likely.

GBP/USD: Sterling advanced to more than two-month highs against the dollar and a four-week high versus the euro as hopes grew of a deal between Britain and the European Union at a summit next month. Britain and the EU have reached agreement on a Brexit divorce bill which is likely to finally total around 50 billion euros, British newspapers reported. Sterling traded 0.3 percent up at 1.3451, having hit a high of 1.3479, it’s highest since Sept. 26. FxWirePro's Hourly Sterling Strength Index stood at 126.64 (Highly Bullish) by 1000 GMT. The pair was facing strong resistance at 1.3500 and any convincing break above will take it to next level till 1.3550/1.3600 level. On the lower side, near-term support is around 1.3375 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 87.95 pence, having hit a high of 87.76 pence earlier in the session, it’s highest since Nov. 2.

USD/CHF: The Swiss franc tumbled to 1-week lows as the greenback rallied after third-quarter economic growth in the U.S. was revised up to 3.3 percent on an annualized basis. The major trades 0.2 percent up at 0.9860, having touched a high of 0.9882 earlier, it’s highest since Nov. 22. FxWirePro's Hourly Swiss Franc Strength Index stood at -60.74 (Bullish) 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 0.9864 (34- day EMA) and any convincing close above will take it to next level till 0.9900 /0.9945/ 1.000.

AUD/USD: The Australia dollar extended losses for the sixth consecutive session, as a pickup in the US Treasury bond yields boosted the greenback. However, stronger-than-expected domestic economic data and upbeat Chinese manufacturing and services PMI print limited the downside in the major. The Aussie trades 0.1 percent down at 0.7564, having hit a low of 0.7552 on Wednesday; it’s lowest since Nov. 21. FxWirePro's Hourly Aussie Strength Index stood at -93.25 (Slightly 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 rallied, led higher by financial stocks, while the greenback advanced to a 1-week peak as investors awaited the progress of the U.S. tax reform legislation.

The pan-European STOXX 600 index gained 0.4 percent to 389.53 points, while the FTSEurofirst 300 index rallied 0.4 percent to 1,531.84 points.

Britain's FTSE 100 trades 0.2 percent lower at 7,381.92 points, while mid-cap FTSE 250 eased 0.4 percent to 19,969.65 points.

Germany's DAX rose 0.6 percent at 13,145.77 points; France's CAC 40 trades 0.4 percent up at 5,417.62 points.

Commodities Recap

Crude oil prices slumped after OPEC and Russia signaled that they may review any extension of the deal when they meet again in June if the market overheats. International benchmark Brent crude was trading 0.9 percent down at $62.83 per barrel by 1026 GMT, having hit a high of $64.05 the day before, its highest since Nov. 10. U.S. West Texas Intermediate was trading 0.3 percent higher at $57.55 a barrel, after falling as low as $56.74 on Thursday, its lowest since Nov. 21.

Gold prices declined to a one-week low, weighed down by upbeat U.S. growth data and Federal Reserve chair Janet Yellen's bullish view of the economy. Spot gold was 0.1 percent down at $1,281.41 an ounce at 1028 GMT, having touched its lowest since Nov. 22 at $1,279.53 earlier in the session, but was on track for its first monthly gain since August. U.S. gold futures were down 0.1 percent at $1,281.20.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.384 percent higher by 0.009 bps, while 5-year yield was 0.011 bps up at 2.104 percent.

The German 10-year bond yields traded 0.005 bps lower at 0.377 percent and the yield on short-term 2-year traded 0.002 basis point lower at -0.684 percent.

The yield on the UK benchmark 10-year gilts rose 0.022 basis points to 1.363 percent, while the yield on the short-term 2-year traded 0.018 basis points higher at 0.538 percent.

The Japanese government bonds edged down, with the benchmark 10-year cash JGB yield added one basis point to 0.035 percent. The 10-year JGB futures contract slipped 0.13 point to close at 150.93. The two-year JGB yield rose 1.5 basis points to minus 0.160 percent, and the 5-year JGB yield also gained 1.5 basis points to minus 0.115 percent. The 20-year yield added half a basis point to 0.570 percent, while the 30-year yield was flat at 0.825 percent.

The Australian government bond futures slipped, with the three-year bond contract down 3 ticks at 98.080. The 10-year contract fell 4 ticks to 97.4750. The spread between Aussie and U.S. 10-year bonds shrank to the smallest since 1998 at 13 basis points. The New Zealand government bonds were mixed, with yields about 1.5 basis points higher at the long end and 1 basis point lower at short-end of the curve

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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 3582435824m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3582435824m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3582435824m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3582435824m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3582435824m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3582435824m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

December 12 09:30 UTC 45874587m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 45874587m

GBPPI Input Prices MM NSA

Actual

Forecast

Previous

1 %

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