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Europe Roundup: Sterling near 3-week peak on upbeat UK manufacturing PMI, dollar gains ahead of Fed policy meeting outcome, European shares at 2-year peak- Wednesday, November 1st, 2017

Market Roundup

  • EUR/USD -0.06%, USD/JPY 0.33%, GBP/USD 0.1%, EUR/GBP -0.16%
     
  • DXY 0.09%, DAX 1.65%, FTSE 0.28%, Brent 1.25%, Gold 0.58%
     
  • Fed set to hold rates steady ahead of Trump's leadership decision
     
  • Great Britain Oct Markit/CIPS Mfg PMI 56.3 vs 55.9, forecast 55.8, revised 56
     
  • Cryptocurrencies' total value hits record high as bitcoin blasts above $6,500
     
  • Bank of England's Woods says 75,000 Brexit finance job losses "plausible
     
  • Great Britain Oct Nationwide House Prices YY 2.5% vs 2%, forecast 2.2%, revised 2.3%
     
  • GB Oct Nationwide House Prices MM 0.2% vs 0.2%, forecast 0.2%, revised 0.4%
     
  • Ousted Catalan leader unlikely to return to Spain to testify - lawyer
     
  • BOJ gov candidate Ito flags risk of ending stimulus too early
     
  • Oil hits highest since mid-2015 as OPEC sticks to supply deal
     
  • Gold climbs ahead of Fed statement on pick for Yellen replacement
     

Economic Data Ahead

  • (0815 ET/1215 GMT) Payrolls processor ADP releases U.S. employment report for the month of October. The report is expected to show that 200,000 jobs were added as compared with 135,000 jobs in September.
     
  • (0930 ET/1330 GMT) The Markit will release Canada's Manufacturing PMI for the Month of October. The indicator stood at 55.0 in the prior month.
     
  • (0945 ET/1345 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of October. The index is likely to show a final reading of 54.5 after posting similar gains in the previous month.
     
  • (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. manufacturing Purchasing Managers' index eased to 59.5 in October from a reading of 60.8 in September.
     
  • (1000 ET/1400 GMT) The Commerce Department is likely to report that U.S. construction spending remained flat in September after rising 0.5 percent in August.
     
  • (1100 ET/1500 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending October 27.
     
  • (1530 ET/1930 GMT) Autodata Corp is expected to report that U.S. auto sales figures dropped to an annualized rate of 17.50 million units in September from 18.57 million units in August.
     
  • (1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending October 27.
     
  • (1950 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending October 27.

Key Events Ahead

  • (1315 ET/1715 GMT) SNB Governing Board member Fritz Zurbrugg's Speech.
     
  • (1400 ET/1800 GMT) The Federal Reserve's Federal Open Market Committee concludes its two-day meeting on interest rate policy and releases its statement.
     
  • (1615 ET/ 2015 GMT) Bank of Canada Governor Stephen Poloz accompanied by Senior Deputy Governor Carolyn Wilkins appears before the Standing Senate Committee.

FX Beat

DXY: The dollar index gained ahead of Federal Reserve's policy decision, where it is expected to leave interest rates unchanged, however, investors will scrutinize the policy statement for clues on next rate hike and the timing of any moves in 2018.The greenback against a basket of currencies traded 0.1 percent up at 94.64, having touched a high of 95.15 on Friday, its highest since July. 20. FxWirePro's Hourly Dollar Strength Index stood at 7.47 (Neutral) by 1000 GMT.

EUR/USD: The euro declined, extending previous session gains, amid renewed broad-based USD buying in anticipation of the FOMC policy outcome. The European currency traded 0.1 percent down at 1.1635, having touched a low of 1.1574 on Friday, its lowest since Jul. 20. FxWirePro's Hourly Euro Strength Index stood at 24.15 (Neutral) by 1000 GMT. On the lower side, the near term support is around 1.15450 (161.8% retracement of 1.16691 and 1.1880) and any convincing break below will drag the pair down till 1.1500/1.1400. On the higher side, near term resistance is around 1.16486 (23.6% retracement of 1.1880 and 1.15716) and any break above will take it to next level till 1.1700/1.1720/1.17560.

USD/JPY: The dollar rose above the 114.00 handle as investors awaited the outcome of the Federal Reserve's policy meeting for clues about future tightening. The major was trading 0.3 percent up at 114.01, having hit a low of 112.95 the day before, its lowest since Oct. 20. FxWirePro's Hourly Yen Strength Index stood at -64.83 (Bearish) by 1000 GMT. On the lower side, any close below 112.30 (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% fibo) confirms minor bullishness, a jump till 116 likely.

GBP/USD: Sterling rallied to a near 3-week high above the 1.3300 handle, after British manufacturers reported robust growth in the month of October. The Markit manufacturing purchasing managers' index rose to 56.3 in October from an upwardly revised 56.0 in September, adding to the chances that the Bank of England will raise interest rates on Thursday for the first time in a decade. Sterling traded 0.1 percent up at 1.3301, having hit a high of 1.3320 earlier, its highest since Oct. 16. FxWirePro's Hourly Sterling Strength Index stood at 98.17 (Slightly Bearish) by 1000 GMT. Immediate resistance is located at 1.3340, a break above could take it near 1.3400. On the downside, support is seen at 1.3248, a break below targets 1.3210. Against the euro, the pound was trading 0.2 percent up at 87.48 pence, having hit a high of 87.38 pence earlier, its highest since mid June.

USD/CHF: The Swiss franc eased, extending previous session losses, as the greenback gained ahead of the Federal Reserve's monetary policy decision. The major trades 0.3 percent up at 1.0008, having touched a high of 1.0037 on Friday, it’s highest since May. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at -137.46 (Highly Bearish) by 1000 GMT. The near-term support stands at 0.9930 (61.8 retracement of 0.9865 and 1.00378) and any break below will drag the pair to next level till 0.9900/ 0.9870 (233- H MA). The major resistance is around 1.0040 and any break above will take it to next level till 1.0100.

AUD/USD: The Australian dollar rose, reversing some of its previous session losses as the release of Caixin Chinese manufacturing PMI, which came in unchanged at 51.0 for October and surging copper prices provided support to the major. The Aussie trades 0.3 percent up at 0.7681, having hit a low of 0.7624 on Friday; it’s lowest since Jul. 11. FxWirePro's Hourly Aussie Strength Index stood at 65.55 (Bullish) by 1000 GMT. On the lower side, the pair should close below 0.7645 (233 –day MA) and any close below targets 0.7600/0.7550. The near term resistance is around 0.7720 (23.6% fibo) and any break above targets 0.7758 (7- day MA)/0.7801 (21 – day EMA)/0.7860/0.7900/0.7950/0.8000.

Equities Recap

European shares rallied to a two-year high, as the third quarter corporate results and record highs by U.S. and Asian shares boosted market confidence, while greenback gained ahead of Federal Reserve's policy decision.

The pan-European STOXX 600 index advanced 0.6 percent to 397.52 points, while the FTSEurofirst 300 index rallied 0.7 percent to 1,563.27 points.

Britain's FTSE 100 trades 0.2 percent higher at 7,506.61 points, while mid-cap FTSE 250 rose 0.6 percent to 20,345.88 points.

Germany's DAX rose 1.4 percent at 13,407.75 points; France's CAC 40 trades 0.5 percent up at 5,530.61 points.

Commodities Recap

Crude oil prices rallied to multi-month highs as data showed OPEC had significantly improved compliance with its pledged supply cuts and Russia was also seen abiding to the deal. International benchmark Brent crude was trading 0.8 percent up at $61.52 per barrel by 0953 GMT, having hit a high of $61.67 earlier, its highest since Jul., 2015. U.S. West Texas Intermediate was trading 0.7 percent up at $55.01 a barrel, after rising as high as $55.19, its highest since Feb. 23.

Gold prices rose to a 6-day high as market awaited a statement from the U.S. Federal Reserve for hints on the central bank's monetary policy stance at the end of its two-day meeting. Spot gold rose 0.7 percent to $1,279.60 per ounce at 07956 GMT, having touched its highest since Oct. 26 at $1279.90. U.S. gold futures for December delivery were up 0.5 percent at $1,276.50.

Treasuries Recap

The U.S. Treasuries lost ground ahead of today’s FOMC monetary policy decision and the ADP non-farm employment change data. The yield on the benchmark 10-year Treasury jumped 1-1/2 basis points to 2.39 percent, the super-long 30-year bond yields also climbed 1-1/2 basis points to 2.88 percent and the yield on short-term 2-year note traded nearly 1-1/2 basis points higher at 1.60 percent.

The UK gilts slumped after reading a higher-than-expected manufacturing PMI for the month of October, released early today. The yield on the benchmark 10-year gilts, rose 1 basis point to 1.34 percent, the super-long 30-year bond yields also climbed 1 basis point to 1.91 percent and the yield on the short-term 2-year jumped 2 basis points to 0.48 percent.

The German bunds remained mixed in a muted trading session as investors refrained from any amid lack of significant economic data. The German 10-year bond yields, which move inversely to its price, traded flat at 0.36 percent, the yield on the 30-year note climbed nearly 2 basis points to 1.24 percent while the yield on short-term 2-year traded nearly 1 basis point lower at -0.74 percent.

The New Zealand bond remained mixed at the time of closing after today’s labour market report for the September quarter painted a stronger picture of employment than expected, even after allowing for some unusual quarterly moves in the details. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.95 percent, the yield on the 20-year note tad higher at 3.51 percent and the yield on short-term 2-year slid 1 basis point to 2.01 percent.

The Japanese government bonds traded narrowly mixed as investors remain sidelined in any big deal ahead of the FOMC monetary policy decision later in the day. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.067 percent, the yield on long-term 30-year also slipped nearly 1 basis point to 0.863 percent and the yield on short-term 2-year traded steady at -0.158 percent.

The Australian government bond futures slipped Wednesday following weakness in the U.S. Treasuries as investors booked profits ahead of the FOMC policy decision later in the day. The yield on the benchmark 10-year Treasury note, which moves to its price, rose 3 basis points to 2.713 percent, the yield on the long-term 30-year note also jumped 3 basis points to 3.474 percent and the yield on short-term 2-year climbed 1-1/2 basis points to 1.848 percent.

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November 24 15:30 UTC Released

USECRI Weekly Index*

Actual

145.6 %

Forecast

Previous

145.6 %

November 24 14:45 UTC Released

US1st Half-Mth Infl YY*

Actual

54.6 %

Forecast

Previous

54.6 %

November 27 09:00 UTC 29822982m

ITExport Prices*

Actual

Forecast

Previous

111 %

November 27 09:00 UTC 29822982m

ITImport Prices*

Actual

Forecast

Previous

116.1 %

November 27 14:00 UTC 32823282m

MXTrade Balance, $*

Actual

Forecast

Previous

-1.886 Bln USD

November 27 14:00 UTC 32823282m

MXTrade Balance SA*

Actual

Forecast

Previous

-1.559 Bln USD

November 27 15:30 UTC 33723372m

USDallas Fed mfg bus index

Actual

Forecast

Previous

27.6

November 27 21:00 UTC 37023702m

KRBOK Manufacturing BSI*

Actual

Forecast

Previous

87 Bln BRL

November 28 00:00 UTC 38823882m

BRCentral Govt Balance

Actual

Forecast

Previous

-22.725 Bln BRL

November 28 07:00 UTC 43024302m

DEGDP Growth QQ* Advance

Actual

Forecast

Previous

10.7 %

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