Market Roundup
- ECB not close to reversal rate: de Guindos
- UK PM Johnson promises quick Brexit
- Italian minister delivers warning over reform of eurozone bailout fund
- Gold gains on U.S.-China tensions
Economic Data Ahead
- (0830 ET/1330 GMT) Statistics Canada is expected to report that the annual inflation rate rose 1.9 percent in October, while on a monthly basis, the consumer price index rose 0.3 percent after falling 0.4 percent in September.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending November 15.
- (1400 ET/1900 GMT) The Federal Open Market Committee issues minutes of its October 29-30 policy meeting.
Key Events Ahead
- (1200 ET/1700 GMT) European Central Bank Executive Board member Philip Richard Lane's speech
FX Beat
DXY: The dollar index surged as Investors awaited minutes from the Federal Reserve's October policy meeting, due at 1900 GMT, for further cues on the monetary policy outlook. The greenback against a basket of currencies traded 0.2 percent up at 98.00, having touched a low of 97.68 on Monday, its lowest since November 5.
EUR/USD: The euro declined, halting a 4-day rally after Italian Foreign Minister Luigi Di Maio stated that reform of the European Stability Mechanism (ESM) bailout fund may be unacceptable for Italy. The European currency traded 0.1 percent up at 1.1065, having touched a high of 1.1089 on Monday, its highest since November 7. Immediate resistance is located at 1.1091, a break above targets 1.1123. On the downside, support is seen at 1.1039, a break below could drag it below 1.1002.
USD/JPY: The dollar plunged to a near 1-week low as risk sentiment weakened after the U.S. president threatened a trade war escalation and China condemned a U.S. senate measure backing pro-democracy protesters in Hong Kong. The major was trading 0.1 percent down at 108.44, having hit a low of 108.34 earlier, its lowest since November 14. Investors’ will continue to track the broad-based market sentiment, ahead of the FOMC minutes. Immediate resistance is located at 108.74 (21-DMA), a break above targets 109.15 (November 13 High). On the downside, support is seen at 108.29, a break below could take it near at 108.03.
GBP/USD: Sterling declined, extending previous session losses, but held gains above the 1.2900 handle on expectations the ruling Conservative Party will win a parliamentary majority in Britain’s election next month. The major traded 0.2 percent down at 1.2902, having hit a high of 1.2985 on Monday, it’s highest since November 4. Immediate resistance is located at 1.2975, a break above could take it near 1.3012 (October 21 High). On the downside, support is seen at 1.2864 (10-DMA), a break below targets 1.2824. Against the euro, the pound was trading 0.05 percent down at 85.74 pence, having hit a high of 85.21 on Monday, it’s highest since May 6.
USD/CHF: The Swiss franc slumped to a 1-week low as investors awaited the U.S. Federal Reserve’s minutes. The major trades at 0.2 percent up at 0.9917, having touched a high of 0.9918 earlier, it’s highest since November 13. On the higher side, near-term resistance is around 0.9936 and any break above will take the pair to the next level till 0.9983. The near-term support is around 0.9887, and any close below that level will drag it till 0.9859.
Equities Recap
European shares declined as risk sentiment weakened after U.S. President Donald Trump threatened to raise tariffs on Chinese imports if no trade deal was reached with Beijing.
The pan-European STOXX 600 index slumped 0.8 percent at 402.08 points, while the FTSEurofirst 300 tumbled 0.9 percent to 1,573.41 points.
Britain's FTSE 100 trades 1.3 percent down at 7,227.83 points, while mid-cap FTSE 250 declined 0.7 to 20,384.45 points.
Germany's DAX declined 1.1 percent at 13,082.58 points; France's CAC 40 trades 0.7 percent lower at 5,865.81 points.
Commodities Recap
Crude oil prices rebounded after falling to a for a near 3-week trough on the back of a surge in U.S. stockpiles and easing hopes for any movement on the U.S.-China trade war. International benchmark Brent crude was trading 0.3 percent up at $60.88 per barrel by 1028 GMT, having hit a low of $60.27 earlier, its lowest since November 1. U.S. West Texas Intermediate was trading 0.4 percent higher at $55.33 a barrel, after falling as low as $54.83 earlier, its lowest since November 1.
Gold prices surged to a near 2-week peak as trade and political tensions ratcheted up between United States and China, while investors awaited minutes from the U.S. Federal Reserve’s October meeting. Spot gold rose 0.2 percent to $1,475.67 per ounce by 1030 GMT, having touched a high of $1,478.70 earlier, its highest November 7. U.S. gold futures were unchanged at $1,474.00 per ounce.
Treasuries Recap
The U.S. Treasuries gained during the afternoon session amid a relatively quiet day ahead of the Federal Open Market Committee’s (FOMC) monetary policy meeting minutes for the month of October, scheduled to be released today by 19:00GMT. The yield on the benchmark 10-year Treasury yield plunged 4 basis points to 1.747 percent, the super-long 30-year bond yield also slumped 4 basis points to 2.214 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points down at 1.584 percent.
The United Kingdom’s gilts surged during European trading hours as investors remained side-lined amid a muted trading session that witnessed data of little economic significance. However, investors’ attention might turn towards the Bank of England’s (BoE) Monetary Policy Committee (MPC) Treasury Committee Hearings, due on November 21 and the country’s manufacturing and services PMIs for the month of November, both due to be released on the following day for further direction into the debt market. The yield on the benchmark 10-year gilts, plunged nearly 4-1/2 basis points to 0.692 percent, the 30-year yield slumped 3-1/2 basis points to 1.240 percent and the yield on the short-term 2-year also traded nearly 4-1/2 basis points down at 0.531 percent.
The German bunds jumped during European session amid silent trading hours that barely witnessed any data of major economic significance. But, attention remain glued to the European Central Bank’s (ECB) account of monetary policy meeting for the month of October, scheduled to be released on November 21 by 12:30GMT. Besides, the country’s gross domestic product (GDP) for the third quarter of this year and November month manufacturing PMI, both scheduled to be released on November 22 by 07:00GMT and 08:30GMT respectively shall provide further direction into the debt market. The German 10-year bond yield, which move inversely to its price, plunged 4 basis points to -0.382 percent, the yield on 30-year note slumped nearly 5 basis points to 0.105 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points down at -0.653 percent.
