Menu

Search

  |   Market Roundups

Menu

  |   Market Roundups

Search

Europe Roundup: Sterling slumps as UK inflation disappoints investors, euro hits over 2-week high following upbeat economic data, European shares edge down - Tuesday, November 14th, 2017

Market Roundup 

  • EUR/USD 0.49%, USD/JPY 0.02%, GBP/USD -0.12%, EUR/GBP 0.58%
     
  • DXY -0.24%, DAX -0.06%, FTSE 0.17%, Brent -0.28%, Gold -0.34%
     
  • Fed chief says policy guidance beneficial but must be conditional
     
  • ECB's Draghi says "forward guidance" on policy a success
     
  • EZ Q3 GDP Flash Estimate QQ 0.6% vs 0.6%, forecast 0.6%
     
  • EZ Q3 GDP Flash Estimate YY 2.5% vs 2.5%, forecast 2.5%
     
  • EZ Sept Industrial Production YY 3.3% vs 3.8%, forecast 3.2%, revised 3.9%
     
  • Germany Q3 GDP Flash QQ SA 0.8% vs 0.6%, forecast 0.6%

  • Germany Q3 GDP Flash YY NSA 2.3% vs 0.8%, forecast 2.3%, revised 1%
     
  • Germany Oct CPI final YY 1.6% vs 1.6%, forecast 1.6%
     
  • Germany Oct HICP final YY 1.5% vs 1.5%, forecast 1.5%
     
  • Germany Nov ZEW Economic Sentiment 18.7 vs 17.6, forecast 20
     
  • Germany Nov ZEW Current Conditions 88.8 vs 87, forecast 88
     
  • Great Britain Oct CPI YY 3% vs 3%, forecast 3.1%
     
  • Great Britain Oct RPI YY 4% vs 3.9%, forecast 4.1%
     
  • Great Britain Oct PPI Core Output YY NSA 2.1% vs 2.5%, forecast 2.2%
     

Economic Data Ahead

  • (0830 ET/1330 GMT) The U.S. producer price index is likely to have increased 0.1 percent in October, while in the 12 months through the same period, it is expected to have advanced 2.4 percent. PPI excluding food and energy probably edged up 0.2 percent after posting a gain of 0.4 percent in September.

  • (1600 ET/2100 GMT) Chile's central bank will meet to set its benchmark interest rate, where is widely expected to keep its rate steady at 2.5 percent.
     
  • (1630 ET/2130 GMT) API reports its weekly crude oil stock.
     
  • (1830 ET/2330 GMT) The Faculty of Economics and Commerce Melbourne Institute will release Australia's Westpac consumer confidence for the month of November. The index rose 3.6 percent in the previous month.
     
  • (1850 ET/2350 GMT) Japan's Cabinet Office will release gross domestic product for the third quarter. The economy grew at a pace of 0.6 percent in the previous quarter.

Key Events Ahead

  • (0815 ET/1315 GMT) St. Louis Fed President James Bullard speaks on the U.S. economy and monetary policy in Louisville, Kentucky.
     
  • (0830 ET/1330 GMT) European Central Bank (ECB) Executive Board member Benoît Cœuré's Speech. 
     
  • (1145 ET/1645 GMT) FedTrade Operation 30-year Ginnie Mae (max $1.280 bn)
     
  • (1330 ET/1730 GMT) Bank of England Deputy Governor for Financial Stability Sir Jon Cunliffe's speech.
     
  • (1305 ET/1805 GMT) Atlanta Fed President Raphael Bostic speaks on the economic outlook and monetary policy before the 35th Annual Business and Economic Forum hosted by Auburn University Montgomery, the Montgomery Chamber of Commerce and the Montgomery Area Committee of 100, in Montgomery, Alabama. 

FX Beat

DXY: The dollar index eased after Fed Chair Janet Yellen stated that the central bank's future policy guidance is beneficial but should always be viewed as conditional. The greenback against a basket of currencies traded 0.2 percent down at 94.29, having touched a low of 94.26 on Friday, its lowest since Oct. 26. FxWirePro's Hourly Dollar Strength Index stood at 6.56 (Neutral) by 1000 GMT.

EUR/USD: The euro rallied to a more than 2-week high on growing expectations that Eurozone economic growth will remain strong against a backdrop of record low interest rates. The upside in the major was also supported by upbeat Eurozone gross domestic product figures, which rose by 0.6 percent in July-September from the previous three months and was 2.5 percent higher than in the same period of 2016. The European currency traded 0.5 percent up at 1.1721, having touched a high of 1.1725 earlier; its highest since Oct. 26. FxWirePro's Hourly Euro Strength Index stood at 124.20 (Highly Bullish) by 1000 GMT. The low made after Nonfarm payroll will be acting as near-term support 1.1550 and any break below will drag the pair to next level till 1.1500/1.1460/1.1430. On the higher side, minor bullishness can be seen above 1.17200 and any break above will take it to next level till 1.1755/1.1800.

USD/JPY: The dollar extended gains for the third consecutive session, amid a modest uptick in the U.S. Treasury bond yields. The major was trading 0.1 percent up at 113.71, having hit a low of 113.09 on Thursday, its lowest since Oct. 31. FxWirePro's Hourly Yen Strength Index stood at 3.72 (Neutral) by 1000 GMT. On the lower side, any close below 112.95 confirms minor weakness, a decline till 112.22 (233- day MA)/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 slumped, extending previous session gains, after UK inflation data came in slightly lower than expected, weakening the case for further interest rate rises. The economy's consumer price inflation came in at an annual rate of 3.0 percent in October, below expectation for a 3.1 percent annual rise. Sterling traded 0.2 percent down at 1.3092, having hit a low of 1.3061 on Monday, its lowest since Nov. 6. FxWirePro's Hourly Sterling Strength Index stood at -79.50 (Slightly Bearish) by 1000 GMT. Any daily close above 1.3100 will take the pair to next level till 1.3135/1.3180. On the lower side, near-term support is around 1.30600 and any break below will drag it to next level till 1.30270/ 1.3000/ 1.29235 (161.8% fibo). Against the euro, the pound was trading 0.6 percent down at 89.49 pence, having hit a low of 89.53 pence earlier in the day, its lowest since Oct. 26.

USD/CHF: The Swiss franc edged up, after falling for two straight sessions, amid uncertainty over the outlook for tax reforms in the United States. The major trades 0.2 percent down at 0.9947, having touched a low of 0.9921 on Thursday, it’s lowest since Oct. 26. FxWirePro's Hourly Swiss Franc Strength Index stood at 44.67 (Neutral) by 1000 GMT. The near-term support is around 0.9908 (20- day MA).Any break below will drag the pair to next level till 0.98948 (23.6% fibo and trend line support)/0.98550. The major resistance is around 1.0040 and any break above will take it to next level till 1.0100/1.0174.

AUD/USD: The Australian dollar retreated from a 4-month low hit earlier in the session on the back of a surprisingly strong domestic survey of business activity, while investors largely ignored the downbeat Chinese data.  The Aussie trades 0.1 percent up at 0.7629, having hit a low of 0.7609 earlier; it’s lowest since Jul. 11. FxWirePro's Hourly Aussie Strength Index stood at -33.58 (Neutral) by 1000 GMT. On the lower side, the pair should close below 0.7624 for further weakness. Any close below targets 0.7600/0.7550. The near-term resistance is around 0.7688 (100- 4H MA) and any break above targets 0.7730/0.7780.

Equities Recap

European shares traded near seven-week lows hit in the previous session, while the euro rose to an over two-week high on growing expectations that economic growth will remain strong despite record low-interest rates.

The pan-European STOXX 600 index edged down 0.2 percent to 385.50 points, while the FTSEurofirst 300 index fell 0.2 percent to 1,516.94 points.

Britain's FTSE 100 trades 0.1 percent higher at 7,424.02 points, while mid-cap FTSE 250 rose 0.4 percent to 19,868.26 points.

Germany's DAX rose 0.1 percent at 13,082.80 points; France's CAC 40 trades 0.1 percent up at 5,344.73 points.

Commodities Recap

Crude oil prices declined, as the prospect of further rises in U.S. output offset optimism that OPEC-led production cuts would balance the market. International benchmark Brent crude was trading 0.1 percent down at $63.03 per barrel by 0416 GMT, having hit a low of $62.59 the day before, its lowest since Nov. 6. U.S. West Texas Intermediate was trading 0.2 percent down at $56.60 a barrel, after falling as low as $56.28 on Monday, its lowest since Nov. 6.

Gold prices slumped to a 1-week low, weighed down by higher U.S. Treasury yields amid uncertainty over the outlook for tax reforms in the United States. Spot gold was 0.3 percent down at $1,273.28 per ounce at 1013 GMT, having touched its highest since Oct. 20 at $1,288.31 an ounce on Thursday.  U.S. gold futures for December delivery fell 0.2 percent to $1,276.50.

Treasuries Recap

The U.S. Treasuries traded flat amid a silent trading day and as investors are awaiting the country’s consumer price-led inflation index, scheduled to be released on November 15 by 13:30GMT. The yield on the benchmark 10-year Treasuries neutral at 2.40 percent, the super-long 30-year bond yields slipped 1 basis point to 2.86 percent and the yield on short-term 2-year note traded flat at 1.68 percent.

The UK gilts remained flat after the country’s consumer price-led inflation index for the month of October failed to meet market expectations, coming in at 3.0 percent y/y vs consensus estimates of 3.1 percent y/y, although unchanged from a year ago period. The UK 10-year bond yields, which move inversely to its price, hovered around 1.33 percent, the yield on the 30-year note rose nearly 1 basis point to 1.89 percent and the yield on short-term 2-year traded flat at 0.48 percent.

The German bunds slipped after the country’s gross domestic product (GDP) for the third quarter of this year beat market expectations, rising from that in the second-quarter. The German 10-year bond yields, which move inversely to its price, remained tad higher at 0.42 percent, the yield on 30-year note hovered around 1.31 percent and the yield on short-term 2-year traded nearly 1/2 basis point higher at -0.74 percent.

The New Zealand government bonds closed a tad lower in a quiet trading session, although rising U.S. Treasury yields dragged the bonds prices lower. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.97 percent, the yield on 20-year note also climbed 1 basis point to 3.52 percent and the yield on short-term 2-year ended 1 basis point higher at 2.06 percent.

The Japanese government bonds traded narrowly mixed in quiet trading session as investors remained focused on the recent developments in the U.S. Treasury yields, although the big movements were limited as Nikkei 225 continued retreating from 26-year peaks. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.051 percent, the yield on long-term 40-year climbed nearly 1 basis point to 0.991 percent and the yield on short-term 2-year declined 1/2 basis point to -0.170 percent.

The Australian government bonds slumped following weakness in the U.S. Treasuries after U.S. Treasury two-year note yields touched a fresh nine-year high as investors priced in an interest rate hike of 25 basis points by the Federal Reserve in December meeting. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 2-1/2 basis point to 2.659 percent, the yield on the long-term 30-year note jumped 1-1/2 basis points to 3.425 percent and the yield on short-term 2-year climbed 4-1/2 basis points to 1.852 percent.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.