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Europe Roundup: Sterling rebounds on better-than-expected service PMI, gold off 2-week peaks, investors eye U.S. nonfarm payroll report - Friday, November 3rd, 2017

Market Roundup

  • EUR/USD -0.07%, USD/JPY -0.02%, GBP/USD 0.05%, EUR/GBP -0.11%
     
  • DXY 0.07%, DAX 0.29%, FTSE 0.3%, Brent 0.43%, Gold -0.01%

  • U.S. job growth seen surging after storm-related disruptions
     
  • BoE's Broadbent - rate signal is no promise
     
  • Eurozone inflation may be higher than expected in 2018

  • Catalonia unemployment jumps as political crisis drags on
     
  • Great Britain Oct Markit/CIPS Service PMI 55.6 vs 53.6, forecast 53.3
     
  • China's services sector sees modest growth in Oct
     
  • Germany’s Merkel says sees difficult coalition talks ahead
     
  • Oil near two-year highs as tightening market woos buyers
     
  • Gold little changed amid steady dollar ahead of U.S. jobs report

Economic Data Ahead

  • (0830 ET/1230 GMT) The U.S. Labor Department releases nonfarm payrolls report for the month of October. The report is likely to show 310,000 jobs were added compared with a 33,000-jobs fall 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 63.1 percent in the previous month.
     
  • (0830 ET/1230 GMT) The U.S. Labor Department is expected to report that unemployment rate remained unchanged at 4.2 percent in October.
     
  • (0830 ET/1230 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in October after advancing 0.5 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 $43.2 billion from 42.4 billion in August.
     
  • (0830 ET/1230 GMT) The Statistics Canada is likely to report that international trade deficit narrowed to C$3 billion in September from C$3.41 billion in August.
     
  • (0830 ET/1230 GMT) The Statistics Canada releases employment report for October. The economy is likely to have added 15,000 jobs, compared to a rise of 10,000 jobs in September, while the participation rate stood at 65.6 percent in the same month.
     
  • (0830 ET/1230 GMT) Canada's unemployment rate is expected to remain steady at 6.2 percent in the month of October.
     
  • (0945 ET/1345 GMT) Financial firm Markit releases final U.S. composite PMI for the month of October. The index posted a final reading of 55.7 in the previous month.
     
  • (0945 ET/1345 GMT) Markit Economics reports final U.S. services PMI for the month of October. The index posted a final reading of 55.9 in September.
     
  • (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. non-manufacturing Purchasing Managers' index fell to a final reading of 58.6 in October from 59.8 in September.
     
  • (1000 ET/1400 GMT) The United States is likely to report that factory orders increased 1.3 percent in September after posting a rise of 1.2 percent in the prior month.
     
  • (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count. 

Key Events Ahead

  • (1145 ET/1545 GMT) FedTrade Operation 30-year Fannie Mae / Freddie Mac (max $1.665 bn)
     
  • (1215 ET/1615 GMT) Minneapolis Fed President Neel Kashkari participates in a moderated Q&A session before an event hosted by Women in Housing and Finance in Washington.

FX Beat

DXY: The dollar index steadied as investors refrained from taking big positions ahead of the highly crucial Nonfarm payroll report that could provide further insight on the strength of the economy and monetary policy outlook. The greenback against a basket of currencies traded flat at 94.79, having touched a low of 94.41 the day before, its lowest since Oct. 26. FxWirePro's Hourly Dollar Strength Index stood at 35.13 (Neutral) by 1000 GMT.

EUR/USD: The euro eased after rising to a 1-week high in the previous session, as the greenback gained ahead of the U.S. payroll data that could seal the case for the Fed to raise interest rates in December. The European currency traded 0.1 percent down at 1.1649, having touched a high of 1.1687 on Thursday, its highest since Oct. 26. FxWirePro's Hourly Euro Strength Index stood at 67.10 (Bullish) by 1000 GMT. The pair is facing hurdle at 1.1680- 1.1670 and any convincing break above will take the pair to next level till 1.1720 (support turned into resistance)/1.1755/1.1800. On the lower side, near-term support is around 1.16400 (20- 4H MA) and any break below will drag it till 1.1600/1.15715.

USD/JPY: The dollar steadied above the 114.00 handle, as investors held back from placing big bets ahead of the U.S. nonfarm payroll report for October and the Institute for Supply Management's gauge of services sector activity. The major was trading flat at 114.10, having hit a low of 112.95 on Tuesday, its lowest since Oct. 20. FxWirePro's Hourly Yen Strength Index stood at -103.58 (Highly 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% fib) confirms minor bullishness, a jump till 116 likely.

GBP/USD: Sterling rebounded from a near 1-month low against the dollar after data showed Britain's dominant services sector grew at the fastest rate in six months. The economy's service PMI advanced to 55.6 in October from 53.6 in September, recording its highest level since April and its biggest one-month rise since August 2016. Sterling traded flat at 1.3063, having hit a low of 1.3039 earlier in the day, its lowest since Oct. 6. FxWirePro's Hourly Sterling Strength Index stood at -39.29 (Neutral) by 1000 GMT. Any break below 1.30270 (Oct 6th, 2017) will drag the pair till 1.2780 (233- day MA). On the higher side, near-term resistance is around 1.3080 (100- day MA) and any break above will take it till 1.3130/1.3175 (55- day EMA)/1.3230. Against the euro, the pound was trading 0.1 percent up at 89.18 pence, having hit a low of 89.38 pence the prior day, its lowest since Oct. 26.

USD/CHF: The Swiss franc rose, extending previous session gains as investors remained cautious ahead of highly influential U.S. nonfarm payroll data. The major trades down at 0.9989, having touched a high of 1.0037 the day before, it’s highest since May. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at -41.21 (Neutral) by 1000 GMT. The near-term support stands at 0.9930 (7- day MA) and any break below will drag the pair to next level till 0.9900/0.9860 (233- H MA). The major resistance is around 1.000 and any break above will take it to next level till 1.0040/1.0100.

AUD/USD: The Australian dollar slumped after rising to a 1-week high in the previous session, as weaker-than-expected domestic retail sales figures undermined the bid tone around the major.  The Aussie trades 0.5 percent down at 0.7672 having hit a high of 0.7729 on Thursday; it’s highest since Oct. 25. FxWirePro's Hourly Aussie Strength Index stood at -103.97 (Highly Bearish) by 1000 GMT. On the lower side, the pair should close below 0.7650 (233 –day MA) and any close below targets 0.7600/0.7550. The near-term resistance is around 0.7743 (23.6% fibo) and any break above targets 0.7775 (20- day MA)/0.7822 (55 – day EMA).

Equities Recap

European shares edged up in early deals, underpinned by gains in tech and carmakers stocks, while the greenback steadied ahead of the highly influential Nonfarm payroll report.

The pan-European STOXX 600 index rallied 0.2 percent to 395.56 points, while the FTSEurofirst 300 index advanced 0.1 percent to 1,555.91 points.

Britain's FTSE 100 trades 0.3 percent higher at 7,576.40 points, while mid-cap FTSE 250 gained 0.05 percent to 20,392.82 points.

Germany's DAX rose 0.4 percent at 13,498.44 points; France's CAC 40 trades 0.05 percent up at 5,511.14 points.

Commodities Recap

Crude oil prices advanced, extending previous session gains, underpinned by OPEC-led supply cuts which are tightening the market as well as by strong demand. International benchmark Brent crude was trading 0.5 percent up at $61.02 per barrel by 0916 GMT, having hit a high of $61.68 on Wednesday, its highest since July 2015. U.S. West Texas Intermediate was trading 0.3 percent up at $54.89 a barrel, after rising as high as $55.19 on Wednesday its highest since Feb. 23.

Gold prices eased, reversing some of its previous session gains, as the dollar steadied amid cautious trade ahead of U.S. jobs data later in the day. Spot gold was trading 0.1 percent down at $1,274.87 per ounce at 0922 GMT and was on track for its first weekly gain in three. U.S. gold for December delivery dipped 0.1 percent to $1,276.50.

Treasuries Recap

The 10-year U.S Treasury yield stood at 2.348 percent lower by 0.001 bps, while 5-year yield was 0.001 bps down at 2.001 percent.

The British government bond yields fell, with 5 and 10-year yields falling around 8 to 9 basis points to hit their lowest level since Sept. 15, the day after the BoE first flagged the possibility of an imminent rate hike.

The Japanese government bond prices were little changed as investors remained cautious ahead of key events pertaining to U.S. fiscal and monetary policy. The benchmark 10-year JGB yield stood flat at 0.055 percent and the 20-year yield was also unchanged, at 0.585 percent.

The Australian government bond futures jumped, with the three-year bond contract up 6 ticks at 98.060. The 10-year contract climbed 7.5 ticks to 97.40. The New Zealand government bonds gained, sending yields 7.5 basis points lower at the long end of the curve.

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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 29552955m

ITExport Prices*

Actual

Forecast

Previous

111 %

November 27 09:00 UTC 29552955m

ITImport Prices*

Actual

Forecast

Previous

116.1 %

November 27 14:00 UTC 32553255m

MXTrade Balance, $*

Actual

Forecast

Previous

-1.886 Bln USD

November 27 14:00 UTC 32553255m

MXTrade Balance SA*

Actual

Forecast

Previous

-1.559 Bln USD

November 27 15:30 UTC 33453345m

USDallas Fed mfg bus index

Actual

Forecast

Previous

27.6

November 27 21:00 UTC 36753675m

KRBOK Manufacturing BSI*

Actual

Forecast

Previous

87 Bln BRL

November 28 00:00 UTC 38553855m

BRCentral Govt Balance

Actual

Forecast

Previous

-22.725 Bln BRL

November 28 07:00 UTC 42754275m

DEGDP Growth QQ* Advance

Actual

Forecast

Previous

10.7 %

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