Market Roundup
- EUR/USD 0.31, USD/JPY 0.09%, GBP/USD 0.17%, EUR/GBP 0.08%
- DXY -0.22%, DAX 1.31%, FTSE 0.65%, Brent 0.33%, Gold 0.22%
- U.S. job growth seen accelerating; strong annual wage gain expected
- Trump, Xi upbeat on trade after phone call; U.S. targets more Chinese firms
- EZ Oct Markit Mfg Final PMI, 52.0, 52.1 forecast, 52.1 previous
- Germany Oct Markit/BME Mfg PMI, 52.2, 52.3 forecast, 52.3 previous
- Germany Sep Import Prices YY, 4.4%, 4.6% forecast, 4.8% previous
- Great Britain Oct Markit/CIPS Cons PMI, 53.2, 52.0 forecast, 52.1 previous
- China says "grey rhino" financial risks may surface in 2019
- Japan's PM says he won't force sales tax hike if shock hits economy
- U.S. grants 8 countries Iran sanctions waivers – Bloomberg
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department releases the nonfarm payrolls report for the month of October. The report is likely to show 190,000 jobs were added compared with an increase of 134,000 in September.
- (0830 ET/1230 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of October. The rate stood at 62.7 percent in the previous month.
- (0830 ET/1230 GMT) The U.S. Labor Department is expected to report that unemployment rate remained unchanged 3.7 percent in October.
- (0830 ET/1230 GMT) The United States' average hourly earnings are likely to rise 0.2 percent in October after climbing 0.3 percent in the month before.
- (0830 ET/1230 GMT) The United States releases trade balance figures for the month of September. The economy's trade deficit is expected to have widened to $53.6 billion from $53.2 billion in August.
- (0830 ET/1230 GMT) The Statistics Canada releases the employment report for October. The economy is expected to have added 10,000 jobs, compared to a rise of 63,300 jobs in September, while the participation rate stood at 65.4 percent in the same month.
- (0830 ET/1230 GMT) Canada's unemployment rate is expected to remain unchanged at 5.9 percent in October.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that international trade surplus narrowed to C$0.15 billion in September from C$0.53 billion in August.
- (1000 ET/1400 GMT) The United States is likely to report that factory orders increased 0.5 percent in September, after posting a rise of 2.3 percent in the prior month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0900 ET/1300 GMT) The Federal Reserve Bank of New York hosts public Town Hall meeting related to the Federal Reserve System's Strategies for Improving the U.S. Payment System (SIPS) initiative.
- (0845 ET/1245 GMT) The Federal Reserve Bank of Philadelphia President Patrick Harker speaks on "Workforce Investment by Sector" before the Investing in America's Workforce Book Launch, in New York.
FX Beat
DXY: The dollar index slumped ahead of U.S. employment report, which is expected to show the unemployment rate steady at a 49-year low of 3.7 percent. The greenback against a basket of currencies trades 0.3 percent down at 96.01, having touched a low of 95.99, its lowest since October 24. FxWirePro's Hourly Dollar Strength Index stood at -134.27 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro rallied to an over 1-week peak, despite Eurozone factory activity grew at its weakest pace in more than two years in October as export orders fell for the first time since late 2014. The European currency traded 0.3 percent up at 1.1445, having touched a low of 1.1302 on Wednesday, its lowest since August 15. FxWirePro's Hourly Euro Strength Index stood at 39.06 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1432 (October 25 High), a break above targets 1.1476 (October 24 High). On the downside, support is seen at 1.1368 (5-DMA), a break below could drag it till 1.1302 (October 31 Low).
USD/JPY: The dollar rebounded against the Japanese yen on signs U.S. President Donald Trump is seeking to resolve a damaging trade war with China. The major was trading 0.2 percent up at 112.86, having hit a high of 113.38 on Wednesday, its highest since October 9. FxWirePro's Hourly Yen Strength Index stood at -15.89 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payroll, unemployment data, trade balance, and factory orders. Immediate resistance is located at 113.71 (September 28 High), a break above targets 114.10 (October 5 High). On the downside, support is seen at 112.35 (October 22 Low), a break below could take it lower 112.01 (October 17 Low).
GBP/USD: Sterling extended gains for the third straight session and was on course for its second best week of 2018 on optimism for a Brexit deal and signals from the Bank of England that it could hike interest rates if the exit from the European Union is smooth. The major traded 0.3 percent up at 1.3029, having hit a low of 1.2695 on Tuesday; it’s lowest since August 16. FxWirePro's Hourly Sterling Strength Index stood at 61.12 (Bullish) 1000 GMT. Immediate resistance is located at 1.3103 (October 19 High), a break above could take it near 1.3192 (October 17 High). On the downside, support is seen at 1.2936 (October 23 Low), a break below targets 1.2867 (October 24 Low). Against the euro, the pound was trading 0.2 percent down at 87.90 pence, having hit a high of 87.57 on Thursday, it’s highest since October 16.
USD/CHF: The Swiss franc rose to a 4-day peak, as the greenback eased after Bloomberg reported that Trump had asked U.S. officials to begin drafting a possible trade deal with Beijing. The major trades 0.5 percent down at 0.9971, having touched a high of 1.0094 on Wednesday, it’s highest since May 2017. FxWirePro's Hourly Swiss Franc Strength Index stood at -16.81 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0100 and any break above will take the pair to next level till 1.0145. The near-term support is around 0.9954 (September 25 Low) and any close below that level will drag it till 0.9937 (September 23 Low).
Equities Recap
European shares surged amid improving investor risk sentiment, while sterling gained on Brexit hopes and hawkish Bank of England.
The pan-European STOXX 600 index gained 1.0 percent at 366.96 points, while the FTSEurofirst 300 index rallied 1.0 percent to 1,441.23 points.
Britain's FTSE 100 trades 0.7 percent up at 7,167.72 points, while mid-cap FTSE 250 surged 1.1 percent to 19,379.48 points.
Germany's DAX rose 1.4 percent at 11,624.31 points; France's CAC 40 trades 1.3 percent higher at 5,150.85 points.
Commodities Recap
Crude oil prices surged but were heading for a weekly loss of more than 6 percent, after a report that Washington has granted several countries waivers on sanctions on Tehran, allowing them to continue to import Iranian crude. International benchmark Brent crude was trading 0.5 percent up at $73.12 per barrel by 1023 GMT, having hit a low of $74.48 earlier, its lowest since August 21. U.S. West Texas Intermediate was trading 0.2 percent up at $63.63 a barrel, after falling as low as $63.15 on Thursday, its lowest since April 9.
Gold prices held previous session gains as investors remained cautious ahead of a U.S. jobs report, which could provide clues on the pace of further interest rate hikes. Spot gold was 0.2 percent up at $1,235.14 per ounce by 1030 GMT, having touched a low of $1,211.87 on Wednesday, its lowest since Oct. 11. U.S. gold futures were down 0.3 percent at $1,235.1 per ounce.
Treasuries Recap
The U.S. Treasuries fell during late afternoon session ahead of the country’s non-farm payrolls data for the month of October and unemployment rate for the similar period, both scheduled to be released today by 12:30GMT respectively. The yield on the benchmark 10-year Treasuries jumped nearly 2-1/2 basis points to 3.167 percent, the super-long 30-year bond yields climbed 1-1/2 basis points higher to 3.401 percent and the yield on the short-term 2-year traded 2-1/2 basis points higher at 2.879 percent.
The United Kingdom’s gilts suffered during the afternoon session after the country’s construction PMI for the month of October, came in better than market expectations, also rising from the previous reading in September. The yield on the benchmark 10-year gilts, jumped 3 basis points to 1.482 percent, the super-long 30-year bond yields surged nearly 2-1/2 basis points to 1.886 percent and the yield on the short-term 2-year traded 2 basis points higher at 0.781 percent
The German bunds slumped during European session after investors have largely shrugged-off the lower-than-expected manufacturing PMI for the month of October, besides, the slight dip in Eurozone counterpart as well. The German 10-year bond yields, which move inversely to its price, jumped nearly 4 basis points to 0.434 percent, the yield on the 30-year note climbed 3 basis points to 1.064 percent and the yield on short-term 2-year too traded 2 basis points higher at -0.640 percent.
The New Zealand bonds closed lower tracking United States’ Treasuries amid a muted trading session that witnessed data of little economic significance. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, rose climbed 2 basis points to 2.615 percent, the yield on the long-term 20-year note rose 1 basis point to 2.915 percent and the yield on short-term 2-year closed 1-1/2 basis points higher at 1.840 percent
The Australian government bonds slid during Asian session after investors have shrugged-off the lower-than-expected fall in retail sales for the month of September; however, gains in the country’s producer price index (PPI) for the third quarter of this year, helped cushion further losses in debt prices. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, remained tad higher at 2.657 percent, the yield on the long-term 30-year bond rose 1-1/2 basis points to 3.159 percent and the yield on short-term 2-year jumped nearly 2 basis points to 2.027 percent.
