Market Roundup
- Switzerland Q3 2018 industrial production QQ increase to 1.4 %
- France Nov 2018 business climate mfg increase to 105 balance (forecast 104 balance) vs previous 104 balance
- German Chancellor Angela Merkel says the China U.S. trade conflict is already causing uncertainty among our companies
- Italy's Prime Minister says not ready to backtrack on any point of the budget when it comes to defending Italians' interests
- European Commission and British negotiators have agreed on draft text of political declaration on future EU-UK ties after Brexit
- EU officials says now up to 27 EU member states to decide if they accept it before leaders summit on Sunday
- EU's Moscovici says convinced that a budget agreement can be reached with Italy because it's in everyone's interests
Economic Data Ahead
- (0930 ET/1430 GMT) The Bank of Canada will release its financial system review.
- (1000 ET/1500 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of November. The index is expected to slump 3.0 percent after posting a drop of 2.7 in the prior month.
Key Events Ahead
- (0730 ET/1230 GMT) ECB publishes the minutes of its October policy meeting in Frankfurt
- (0900 ET/1400 GMT) Canadian Finance Minister Bill Morneau will address a business community audience about the budget update in Ottawa
- (0945 ET/1445 GMT) Bank of Canada Senior Deputy Governor Carolyn A. Wilkins participate in a Panel at Canadian Mortgage and Housing Corporation, Ottawa
- (1555 ET/2055 GMT) Bank of England Monetary Policy Committee Member Michael Saunders will speak at the Annual CBI South West Economics Dinner in London
FX Beat
DXY: The dollar index declined after a survey showed the probability of a U.S. recession in the next two years at a median 35 percent. The greenback against a basket of currencies trades 0.4 percent down at 96.38, having touched a low of 96.04 on Tuesday, its lowest since Nov 7. FxWirePro's Hourly Dollar Strength Index stood at 52.62 (Bullish) by 1000 GMT.
EUR/USD: The euro surged as investors grew optimistic about the near-term outlook after the concerns over Italy's budget negotiations with the European Union slightly receded. The European currency traded 0.2 percent up at 1.1404, having touched a high of 1.1472 on Tuesday, its highest since Nov. 7. FxWirePro's Hourly Euro Strength Index stood at 14.72 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1446 (November 8 High), a break above targets 1.1499 (November 7 High). On the downside, support is seen at 1.1351 (November 8 Low), a break below could drag it till 1.1317 (November 9 Low).
USD/JPY: The dollar retreated from a 6-day high touched earlier in the session, as uncertainty over Italian politics, Brexit and worries over slowing economic growth discouraged investors from taking risks. The major was trading 0.1 percent down at 112.93, having hit a high of 113.21, its highest since November 16. FxWirePro's Hourly Yen Strength Index stood at -61.77 (Bearish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, as the U.S. markets remain closed on account of Thanksgiving Day. Immediate resistance is located at 113.38 (October 31 High), a break above targets 113.81 (November 7 High). On the downside, support is seen at 112.14 (October 19 Low), a break below could take it lower 111.82 (October 25 Low).
GBP/USD: Sterling rallied above the 1.2800 handle after an EU official stated that the European Commission's and Britain's Brexit negotiators agreed on the draft text of political declaration on the future EU-UK relationship after Brexit. The major traded 0.8 percent up at 1.2879, having hit a low of 1.2723 last week; it’s lowest since October 31. FxWirePro's Hourly Sterling Strength Index stood at -39.84 (Neutral) 1000 GMT. Immediate resistance is located at 1.2919 (October 25 High), a break above could take it near 1.2990 (October 24 High). On the downside, support is seen at 1.2723 (November 14 Low), a break below targets 1.2695 (October 30 Low). Against the euro, the pound was trading 0.4 percent up at 88.72 pence, having hit a low of 89.32 on Monday, it’s lowest since October 31.
USD/CHF: The Swiss franc rose, extending previous session gains as investors remain cautious amid escalating trade tensions and signs of slackening global growth. The major trades 0.2 percent down at 0.9924, having touched a low of 0.9908 on Tuesday; it’s lowest since Oct. 17. FxWirePro's Hourly Swiss Franc Strength Index stood at 77.48 (Slightly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9980 (Oct. 22 High) and any break above will take the pair to next level till 1.0050 (Nov. 7 High). The near-term support is around 0.9897 (October 17 Low). and any close below that level will drag it till 0.9847 (October 15 Low).
Equities Recap
European shares tumbled, weighed down by disappointing corporate earning updates, while sterling gained after the European Commission and British negotiators agreed a declaration on the two sides' future ties.
The pan-European STOXX 600 index fell 0.9 percent at 352.16 points, while the FTSEurofirst 300 index slumped 0.9 percent to 1,387.10 points.
Britain's FTSE 100 trades 1.1 percent down at 6,974.24 points, while mid-cap FTSE 250 eased 0.8 percent to 18,434.61 points.
Germany's DAX declined 0.8 percent at 11,153.28 points; France's CAC 40 trades 0.9 percent lower at 4,931.02 points.
Commodities Recap
Crude oil prices declined over 1 percent after U.S. crude inventories surged to their highest level since December 2017 amid concerns of an emerging global glut. International benchmark Brent crude was trading 1.4 percent down at $62.56 per barrel by 0924 GMT, having hit a low of $61.75 on Tuesday, its lowest since Dec. 6. U.S. West Texas Intermediate was trading 1.7 percent down at $53.68 a barrel, after falling as low as $52.80 on Tuesday, its lowest since the end of October 2017.
Gold prices surged after rising the highest in two weeks in the previous session, as investors turned cautious amid escalating trade tensions between U.S. and China. Spot gold was 0.1 percent higher at $1,227.35 per ounce at 0929 GMT, having hit a high of $1229.93 on Wednesday, its highest since Nov. 7. U.S. gold futures were down 0.2 percent at $1,226.1 per ounce.
Treasuries Recap
The United Kingdom’s gilts climbed during the afternoon session as investors remain confused over the Brexit state of affairs and is awaiting fresh cues for further direction in the debt market. The yield on the benchmark 10-year gilts, jumped 2 basis points to 1.417 percent, the super-long 30-year bond yields rose 1 basis point to 1.960 percent and the yield on the short-term 2-year traded 3 basis points higher at 0.770 percent
The German bunds jumped during afternoon session ahead of the European Central Bank’s (ECB) account of monetary policy meeting, due today by 12:30GMT. The German 10-year bond yields, which move inversely to its price, fell nearly 2 basis points to 0.356 percent, the yield on 30-year note also slumped 2 basis points to 1.022 percent and the yield on short-term 2-year traded nearly 1 basis point lower at -0.644 percent.
The Japanese government bonds remained flat after the country’s national consumer price inflation (CPI) data for the month of October met market expectations, unchanged from the prior reading in September as well, ahead of a long holiday on account of Thanksgiving Day. The yield on the benchmark 10-year JGB note, which moves inversely to its price, remained tad higher at 0.094 percent, the yield on the long-term 30-year note hovered around 0.826 percent and the yield on short-term 2-year remained flat at -0.140 percent.
The Australian government bonds gained across the curve during Asian session on news reports that the Fed could pause its rate tightening cycle next year. But the yields on the U.S. Treasuries were relatively unchanged due to Thanksgiving holiday. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 4 basis points to 2.663 percent, the yield on the long-term 30-year bond also dipped 4 basis points to 3.184 percent and the yield on short-term 2-year down 2 basis points to 2.042 percent.
