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Europe Roundup: Sterling off 1-1/2 week high on weak economic data, dollar steadies against yen near 2-month trough amid subdued trading, European shares trade in red - Thursday, November 23rd, 2017

Market Roundup

  • EUR/USD 0.25%, USD/JPY -0.01%, GBP/USD -0.11%, EUR/GBP 0.35%
     
  • DXY -0.13%, DAX 0.12%, FTSE -0.06%, Brent -0.41%, Gold 0.02%
     
  • EZ Markit Composite Flash PMI Nov, 57.5, 56.0 forecast, 56.0 previous
     
  • EZ Markit Manufacturing Flash PMI Nov, 60.0, 58.3 forecast, 58.5 previous
     
  • EZ Markit Service Flash PMI Nov, 56.2, 55.1 forecast, 55.0 previous
     
  • Germany Markit Manufacturing Flash PMI Nov, 62.5, 60.4 forecast, 60.6 previous
     
  • Germany Markit Service Flash PMI Nov, 54.9, 55.0 forecast, 54.7 previous
  • Germany Markit Composite Flash PM Nov, 57.6, 56.7 forecast, 56.6 previous
     
  • Great Britain GDP 2nd Release QQ Q3, 0.4%, 0.4% forecast, 0.4% previous
  • Great Britain GDP 2nd Release YY Q3, 1.5%, 1.5% forecast, 1.5% previous
     
  • Great Britain Business Invest Prelim Q3, 0.2% QQ, 1.3% YY; previous0.5%, 2.5%
     
  • UK shop sales rebound in November, but price pressures rampant – CBI
  • Brimming German economy well placed to ride out political uncertainty
     
  • China c. bank adviser rejects criticism of forex management – paper
  • US oil prices ease from two-year highs on oversupply worries
     
  • Gold prices dip on profit-taking amid Fed inflation concerns

Economic Data Ahead

  • (0730 ET/1230 GMT) European Central Bank releases its Monetary Policy Meeting Accounts.
     
  • (0830 ET/1330 GMT) Statistics Canada is expected to report that retail sales gained 0.9 percent in September after falling 0.3 percent in August. While excluding autos, retail sales are likely to have risen 1.0 percent, after declining 0.7 percent in the previous month.
     
  • (1645 ET/2145 GMT) The Statistics New Zealand releases its trade balance data for the month of October. The economy posted an annual trade deficit of $2.910 billion in September.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending November 17.
     
  • (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending November 17.

Key Events Ahead

  • (1130 ET/1630 GMT) The Swiss National Bank Chairman of the Governing Board Thomas J. Jordan's speech.
     
  • (0830 ET/1230 GMT) European Central Bank Executive Board member Benoît Cœuré's speech.

FX Beat

DXY: The dollar index tumbled to a 1-month low as investors slashed expectations on the outlook for U.S. interest rate hikes next year after the release of the Federal Reserve's latest policy meeting minutes. The greenback against a basket of currencies traded 0.2 percent down at 93.10, having touched a low of 93.08 earlier, its lowest since Oct. 19. FxWirePro's Hourly Dollar Strength Index stood at -95.91 (Slightly Bearish) by 1000 GMT.

EUR/USD: The euro advanced to a 1-week high after data showed Eurozone business growth accelerated, supporting the European Central Bank's move last month to announce a throttling back of its monetary stimulus. The European currency traded 0.2 percent up at 1.1840, having touched a high of 1.1846 earlier; its highest since Nov. 15. FxWirePro's Hourly Euro Strength Index stood at -7.08 (Neutral) by 1000 GMT.  Any break above 1.1875 will take the pair till 1.1900/1.1928 (50% retracement)/1.2000. On the lower side, near-term support is around is around 1.1800 and any violation below will drag it to next level till 1.1755 (100-day MA)/1.1700.

USD/JPY: The dollar steadied after declining to a 2-month low earlier in the session, as investors seemed to have digested Wednesday's dovish FOMC meeting minutes. Trading activity is likely to remain subdued with the United States off for Thanksgiving Day holiday. The major was trading flat at 111.22, having hit a low of 111.07 earlier, its lowest since Sept. 18. FxWirePro's Hourly Yen Strength Index stood at 35.93 (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 112.08 (233- day MA) will take the pair to next level till 112.70/113.36 likely.

GBP/USD: Sterling eased from a 1-1/2 month peak after preliminary figures of UK GDP showed the economy is likely to expand at an annualized 1.5 percent during the July-September period and 0.4 percent inter-quarter, both prints coming in in line with estimates. The major traded 0.2 percent down at 1.3305, having hit a high of 1.3336, it’s highest since Oct. 13. FxWirePro's Hourly Sterling Strength Index stood at -85.91 (Slightly Bearish) by 1000 GMT. Any break above 1.3380 will take the pair to next level till 1.3400/1.3500. On the lower side, near-term support is around 1.3230 and any break below will drag it to next level till 1.3175/1.3130/1.3100/1.3060/1.30270. Against the euro, the pound was trading 0.3 percent down at 88.99 pence, having hit a high of 88.42 pence on Tuesday, it’s highest since Nov. 10.

USD/CHF: The Swiss franc rallied to a 1-month peak as the greenback slumped on speculation the Federal Reserve might not tighten U.S. policy as aggressively as previously thought. The major trades 0.2 percent down at 0.9801, having touched a low of 0.9800 earlier, it’s lowest since Oct. 20. FxWirePro's Hourly Swiss Franc Strength Index stood at 14.58 (Neutral) by 1000 GMT. On the lower side, near-term support is around 0.9800 (200- day EMA) and any break below will drag the pair to lower level till 0.97730 (resistance turned into support)/0.9745/0.9705. The near term resistance is around 0.9850 (233- day MA) and any violation above will take it to next level till 0.9875/0.9900.

AUD/USD: The Australian dollar climbed to an over 1-week high as the U.S. dollar fell after dovish FOMC meeting minutes cast doubts over the pace of rate increases in 2018. The Aussie trades up at 0.7634, having hit a low of 0.7532 on Tuesday; it’s lowest since Jun. 14. FxWirePro's Hourly Aussie Strength Index stood at 111.08 (Highly Bullish) 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 slumped, weighed down by losses in British stocks, while the greenback tumbled to a 1-month low on the speculation the Fed might not tighten U.S. policy as aggressively as previously expected.

The pan-European STOXX 600 index declined 0.1 percent to 386.59 points, while the FTSEurofirst 300 index eased 0.1 percent to 1,519.63 points.

Britain's FTSE 100 trades 0.2 percent lower at 7,407.66 points, while mid-cap FTSE 250 rose 0.01 percent to 20,015.52 points.

Germany's DAX fell 0.1 percent at 12,999.22 points; France's CAC 40 trades 0.3 percent rose at 5,369.37 points.

Commodities Recap

Crude oil prices eased back from recent highs, as concerns about oversupply outweighed the impact of a pipeline shutdown in the United States. International benchmark Brent crude was trading 0.5 percent down at $62.99 per barrel by 1028 GMT, having hit a high of $63.39 the day before, its highest since Nov. 13. U.S. West Texas Intermediate was trading 0.3 percent lower at $57.85 a barrel, after rising as high as $58.12 on Wednesday, its highest since June 2015.

Gold prices decline as investors took profits after gaining nearly 1 percent in the previous session on weaker U.S. economic data and concerns among some Federal Reserve policymakers over lower inflation. Spot gold was 0.1 down percent at $1,289.64 per ounce by 1030 GMT, having touched a low of $1,274.36 on Monday, its lowest since Nov. 14. U.S. gold futures GCcv1 for December delivery edged down 0.2 percent to $1,289.70.

Treasuries Recap

The UK gilts jumped after the country’s third-quarter gross domestic product (GDP) remained unchanged compared to that in the second quarter, although meeting market expectations as households spending increased at the fastest pace in a year. The yield on the benchmark 10-year gilts, slumped 2 basis points to 1.25 percent, the super-long 30-year bond yields also slipped nearly 1 basis point to 1.82 percent and the yield on the short-term 2-year too traded 2 basis points lower at 0.44 percent.

The German bunds traded flat after the country’s gross domestic product (GDP) for the third quarter of this year showcased a solid reading, albeit unchanged from that in the second-quarter. The German 10-year bond yields, which move inversely to its price, traded tad lower at 0.35 percent, the yield on 30-year note hovered around 1.18 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.69 percent.

The New Zealand bonds closed higher following weaker-than-expected retail sales data for the third-quarter of this year. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 3 basis points to 2.790 percent, the yield on 20-year note also dipped 2 basis points to 3.380 percent and the yield on short-term 2-year ended 2 basis points lower at 1.970 percent.

The Australian bonds traded a little firmer following firmness in the U.S. Treasuries after Federal Open Market Committee toned cautious about inflation in its October 31-November 1 monetary policy meeting minutes. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.525 percent, the yield on the long-term 30-year note dipped 1 basis point to 3.265 percent and the yield on short-term 2-year fell 1 basis point to 1.777 percent.

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December 15 21:00 UTC Released

USOverall Net Capital Flows

Actual

151.2 Bln USD

Forecast

Previous

-51.3 Bln USD

December 15 21:00 UTC Released

USNet L-T Flows,Incl.Swaps

Actual

7.9 Bln USD

Forecast

Previous

65.1 Bln USD

January 9 11:00 UTC 3374033740m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3374033740m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374033740m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374033740m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3374033740m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3374033740m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

December 12 09:30 UTC 66716671m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 66716671m

GBPPI Input Prices MM NSA

Actual

Forecast

Previous

1 %

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