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Europe Roundup: Sterling off 2-month peak despite better-than-expected UK manufacturing PMI, dollar eases as U.S. tax plan progress stalls, European shares decline - Friday, December 1st, 2017

Market Roundup

  • EUR/USD -0.13%, USD/JPY -0.17%, GBP/USD -0.27%, EUR/GBP 0.15%
     
  • DXY 0.03%, DAX -1.45%, FTSE -0.5%, Brent 0.86%, Gold 0.24%
     
  • EZ Markit Mfg Final PMI Nov, 60.1, 60.0 f’cast, 60.0 prev
     
  • Germany Marki/BME Mfg PMI Nov, 62.5, 62.5 forecast, 62.5 prev
     
  • France Markit Mfg PMI Nov, 57.7, 57.5 forecast, 57.5 prev
     
  • Great Britain Markit/CIPS Mfg PMI Nov, 58.2, 56.5 forecast, 56.3 prev 
     
  • Italy GDP Final QQ Q3, 0.4%, 0.5% forecast, 0.5% prev
     
  • Italy GDP Final YY Q3, 1.7%, 1.8% forecast, 1.8% prev
     
  • Japan budget outline seeks to combine monetary and pro-growth fiscal policies
     
  • U.S. formally opposes China market economy status at WTO
     
  • Oil prices rise after OPEC extends output curbs
     
  • Gold inches up on weaker dollar; improved risk appetite weighs

Economic Data Ahead

  • (0830 ET/1330 GMT) The Statistics Canada is expected to report that gross domestic product increased at a 1.6 percent annual rate in the third quarter after growing at a 4.5 percent pace in the second quarter. While on monthly basis, it is likely to rise 0.1 percent in September, after posting a contraction of 0.1 percent in August.
     
  • (0830 ET/1330 GMT) The Statistics Canada releases employment report for the month November. The economy probably added 10,000 jobs, after recording strong gains in the previous month, while the participation rate stood at 65.7 percent in October.
     
  • (0830 ET/1330 GMT) Canada's unemployment rate is expected to edge down to 6.2 percent in November from 6.3 percent in October.
     
  • (0930 ET/1430 GMT) The Markit will release Canada's Manufacturing PMI for the Month of November. The indicator stood at 54.8 in the prior month.
     
  • (0945 ET/1445 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of November. The index is likely to show a final reading of 53.8 after posting similar gains in the previous month.
     
  • (1000 ET/1500 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. manufacturing Purchasing Managers' index dropped to 58.4 in November from 58.7 in October.
     
  • (1000 ET/1500 GMT) The Commerce Department is likely to report that U.S. construction spending increased 0.5 percent in October after rising 0.3 percent in the previous month.
     
  • (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count. 
     
  • (1530 ET/ 2030 GMT) Autodata Corp is expected to report that U.S. auto sales figures dropped to an annualized rate of 17.50 million units in November from 18.1 million units in October.

Key Events Ahead

  • (0905 ET/1405 GMT) Federal Reserve Bank of St. Louis President James Bullard will be giving a presentation on the U.S. economy and monetary policy before the Little Rock Regional Economic Briefing.
     
  • (0930 ET/1430 GMT) Federal Reserve Bank of Dallas President Robert Kaplan is scheduled to participate in a moderated question-and-answer session before the Border Economic Development and Entrepreneurship Symposium hosted by the Federal Reserve Bank of Dallas' San Antonio Branch; University of Texas, Rio Grande Valley; and McAllen Chamber of Commerce, in McAllen, Texas.
     
  • (1015 ET/1515 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on "Inclusive Economic Growth" before the Philadelphia Fed Policy Forum: "People, Place, Prosperity: Revitalizing Our Cities"
     

FX Beat

DXY: The dollar index declined, weighed down by a fall in the U.S. Treasury yields and a delay in a vote on tax reform. The greenback against a basket of currencies traded 0.05 percent down at 93.02, having touched a high of 93.51 in the prior session, its highest since Nov. 22. FxWirePro's Hourly Dollar Strength Index stood at 70.31 (Bullish) by 1000 GMT.

EUR/USD: The euro trimmed gains after rising to a 4-day high despite Eurozone factories recording their busiest month for over 17 years in November in a broad-based acceleration. The bloc's final manufacturing Purchasing Managers' Index rose to 60.1 last month from October's 58.5, above a preliminary estimate of 60.0. The European currency traded 0.1 percent up at 1.1910, having touched a low of 1.1809 the day before, its lowest since Nov. 22. FxWirePro's Hourly Euro Strength Index stood at -2.58 (Neutral) by 1000 GMT. The pair is facing resistance at 1.19615 (Nov 27th high) and any break above will take it to next level till 1.2000/1.2090. On the lower side, near-term support is around 1.19000 and any break below will drag it to next level till 1.18700 (50- H MA)/1.1835 (233- H MA).

USD/JPY: The dollar eased after rising to a 10-day high as it was decided that the U.S. Senate will not vote on the tax bill late on Thursday but would continue the debate on Friday. The major was trading 0.1 percent down at 112.41, having hit a high of 112.69 earlier, its highest since Nov. 21. FxWirePro's Hourly Yen Strength Index stood at -61.13 (Bearish) 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 112.88 (233- 4H MA) will take the pair to next level till 113.36/114 likely.

GBP/USD: Sterling retreated from an over 2-month peak despite the release of better-than-expected UK’s manufacturing PMI, suggesting manufacturing will give a boost to the country's sluggish economy going into 2018. The economy's purchasing managers index in the manufacturing sector jumped to 58.2 in November from an upwardly revised 56.6 in October. Sterling traded 0.3 percent down at 1.3488, having hit a high of 1.3549 earlier, it’s highest since Sept. 25. FxWirePro's Hourly Sterling Strength Index stood at 64.23 (Bullish) by 1000 GMT. The pair was facing strong resistance at 1.3550 and any convincing break above will take the pair to next level till 1.3600/1.3700 level. On the lower side, near-term support is around 1.34700 (23.6% fibo) and any break below will drag it to next level till 1.3430/1.3400. Against the euro, the pound was trading 0.2 percent down at 88.17 pence, having hit a high of 87.76 pence in the previous session, it’s highest since Nov. 2.

USD/CHF: The Swiss franc extended previous session gains as the greenback eased following a drop in the U.S. Treasury yields. The major trades 0.05 percent down at 0.9831, having touched a high of 0.9882 the day before, it’s highest since Nov. 22. FxWirePro's Hourly Swiss Franc Strength Index stood at -15.05 (Neutral) 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 0.9885 (233- 4H MA) and any convincing close above will take it to next level till 0.9900/0.9945/1.000.

AUD/USD: The Australian dollar steadied after falling to a 10-day low earlier in the day as the postponement of the Senate tax bill vote kept a lid on the gains in the US dollar. The Aussie trades 0.1 percent up at 0.7561, having hit an early low of 0.7551; it’s lowest since Nov. 21. FxWirePro's Hourly Aussie Strength Index stood at -41.48 (Neutral) by 1000 GMT.  On the lower side, the pair’s 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 (trend line resistance) and any break above targets 0.7680/0.7730/0.7780.

Equities Recap

European shares plunged, weighed down by weakness in British stocks, while the greenback eased as U.S. tax plan progress stalled.

The pan-European STOXX 600 index declined 0.5 percent to 384.66 points, while the FTSEurofirst 300 index slumped 0.5 percent to 1,511.00 points.

Britain's FTSE 100 trades 0.2 percent lower at 7,315.26 points, while mid-cap FTSE 250 eased 0.3 percent to 19,920.14 points.

Germany's DAX fell 0.9 percent at 12,910.84 points; France's CAC 40 trades 0.9 percent up at 5,324.93 points.

Commodities Recap

Crude oil prices rose after OPEC and non-OPEC led by Russia agreed to extend output curbs until the end of 2018 in order to tackle global oversupply. International benchmark Brent crude was trading 0.7 percent up at $63.12 per barrel by 1002 GMT, having hit a low of $62.14 the day before, its lowest since Nov. 21. U.S. West Texas Intermediate was trading 0.7 percent higher at $57.79 a barrel, after falling as low as $56.74 on Thursday, its lowest since Nov. 21.

Gold prices steadied after falling to a 3-1/2-week low in the previous session, as investors rushed towards riskier assets amid a surge in U.S. equities. Spot gold was trading 0.1 percent up at $1,276.51 an ounce at 1005 GMT, having declined 0.7 percent to its lowest since Nov. 6 at $1,270.30 on Thursday. U.S. gold futures gained 0.2 percent to $1,275.30.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.370 percent lower by 0.046 bps, while 5-year yield was 0.031 bps down at 2.112 percent.

The German 10-year bond yields traded 0.046 bps lower at 0.330 percent and the yield on short-term 2-year traded 0.006 basis point lower at -0.693 percent.

The yield on the UK benchmark 10-year gilts fell 0.052 basis points to 1.278 percent, while the yield on the short-term 2-year traded 0.014 basis points lower at 0.503 percent.

The Japanese government bond prices declined with the market tracking an overnight retreat by U.S. Treasuries. The benchmark 10-year yield rose half a basis point to 0.035 percent and the 30-year yield was 1 basis point higher at 0.830 percent.

The Australian government bond futures eased, with the three-year bond contract down 3 ticks at 98.050. The 10-year contract was off 3.5 ticks at 97.45. The New Zealand government bonds gained, sending yields about 1 basis point lower across 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 3581235812m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3581235812m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3581235812m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3581235812m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

January 9 11:00 UTC 3581235812m

BRRetail Sales MM*

Actual

Forecast

0.35 %

Previous

January 9 11:00 UTC 3581235812m

BRRetail Sales YY*

Actual

Forecast

3.20 %

Previous

December 12 09:30 UTC 45994599m

GBRPIX YY

Actual

Forecast

Previous

4.2 %

December 12 09:30 UTC 45994599m

GBPPI Input Prices MM NSA

Actual

Forecast

Previous

1 %

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