Market Roundup
- Eurozone October 2018 inflation ex-tobacco IDX increase to 104.3 vs previous 104.05
- Eurozone October 2018 HICP-x tobacco yy increase to 2.1 % vs previous 2 %
- Eurozone October 2018 HICP-x f, e, a, t final mm stays flat at 0.1 % (forecast 0.1 %) vs previous 0.1 %
- Eurozone October 2018 HICP-x f,e,a&t final yy stays flat at 1.1 % (forecast 1.1 %) vs previous 1.1 %
- Eurozone October 2018 HICP-x tobacco mm decrease to 0.2 % vs previous 0.5 %
- Eurozone October 2018 HICP-x f&e mm decrease to 0.1 % vs previous 0.3 %
- Eurozone October 2018 HICP final yy stays flat at 2.2 % (forecast 2.2 %) vs previous 2.2 %
- Eurozone October 2018 HICP final mm decrease to 0.2 % (forecast 0.2 %) vs previous 0.5 %
- Eurozone October 2018 HICP-x f&e final yy decrease to 1.2 % vs previous 1.3 %
- Italy September 2018 industrial sales yy wda increase to 3.9 % vs previous 3.2 %
- Italy September 2018 industrial orders yy nsa decrease to -0.9 % vs previous 0.8 % (revised from 0.9 %)
- Italy September 2018 industrial orders mm sa decrease to -2.9 % vs previous 4.9 %
- Italy September 2018 global trade balance decrease to 1.274 eur vs previous 2.491 eur (revised from 2.564 eur)
- Italy September 2018 trade balance EU increase to 1.183 eur vs previous 0.745 eur (revised from 0.817 eur)
Economic Data Ahead
- (0830 ET/1330 GMT) The Statistics Canada will report foreign portfolio investment in domestic stocks for the month of September.
- (0830 ET/1330 GMT) The Statistics Canada will release investment in foreign securities figures for the month of September.
- (0915 ET/1415 GMT) The Federal Reserve is likely to report that industrial production rose 0.2 percent in October after increasing 0.3 in the prior month.
- (0915 ET/1415 GMT) The Federal Reserve Board is expected to report that capacity utilization edged up to 78.2 percent in October from 78.1 percent in September.
- (1100 ET/1600 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of November. The indicator stood at 5 in the previous month.
- (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0800 ET/1300 GMT) Bundesbank President Jens Weidmann speak at a conference in Frankfurt
- (0915 ET/1415 GMT) German Finance Minister Olaf Scholz speak at a conference speak at a conference in Frankfurt.
- (1130 ET/1630 GMT) Federal Reserve Bank of Chicago President Charles Evans participates in a moderated question-and-answer session before the Fixed Income Forum Roundtable in Chicago, Illinois.
FX Beat
DXY: The dollar index declined after a senior U.S. official stated that China's offer was unlikely to spur major trade breakthrough. The greenback against a basket of currencies trades 0.1 percent down at 97.05, having touched a high of 97.69 on Monday, its highest since June 2017. FxWirePro's Hourly Dollar Strength Index stood at -26.55 (Neutral) by 1000 GMT.
EUR/USD: The euro rallied to a 1-week peak after European Central Bank President Mario Draghi stated that the ECB still plans to ease stimulus at the end of the year, but inflation may rise more slowly than expected earlier. The European currency traded 0.1 percent up at 1.1334, having touched a low of 1.1215 on Monday, its lowest since June 2017. FxWirePro's Hourly Euro Strength Index stood at 70.88 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1387 (October 30 High), a break above targets 1.1420 (October 26 High). On the downside, support is seen at 1.1302 (October 31 Low), a break below could drag it till 1.1264.
USD/JPY: The dollar slumped, hovering towards an over 1-week low touched in the previous session, amid growing concerns over the U.S.-china trade tensions and Brexit deal with the European Union. The major was trading 0.3 percent down at 113.30, having hit a low of 113.09 on Thursday, its lowest since November 7. FxWirePro's Hourly Yen Strength Index stood at 3.02 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. capacity utilization and industrial production. Immediate resistance is located at 114.00 (November 14 High), a break above targets 114.55 (October 4 High). On the downside, support is seen at 113.07 (November 5 Low), a break below could take it lower 112.60 (November 1 Low).
GBP/USD: Sterling rebounded from a 2-week low hit in the previous session as Prime Minister Theresa May struck a defiant tone and vowed to take Britain out of the European Union in March as planned, despite strong opposition to her Brexit deal. The major traded 0.4 percent up at 1.2820, having hit a low of 1.2732 on Thursday; it’s lowest since October 31. FxWirePro's Hourly Sterling Strength Index stood at -75.46 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.2853 (October 29 High), a break above could take it near 1.2919 (October 25 High). On the downside, support is seen at 1.2700, a break below targets 1.2665. Against the euro, the pound was trading 0.4 percent up at 88.34 pence, having hit a low of 88.88 on Thursday, it’s lowest since October 31.
USD/CHF: The Swiss franc edged down, extending previous session losses, as the global stock market recovered from recent lows amid improving market risk sentiment. The major trades 0.2 percent up at 1.0077, having touched a low of 1.0128 on Tuesday; it’s lowest since March 2017. FxWirePro's Hourly Swiss Franc Strength Index stood at 2.47 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 1.0145 and any break above will take the pair to next level till 1.0190. The near-term support is around 0.9937 (September 23 Low) and any close below that level will drag it till 0.9897 (October 17 Low).
Equities Recap
European shares rebounded, boosted by gains in the media sector, while sterling retreated from 2-week lows as Prime Minister Theresa May stuck to her Brexit plan despite the resignation of key ministers.
The pan-European STOXX 600 index rallied 0.3 percent at 359.61 points, while the FTSEurofirst 300 index surged 0.2 percent to 1,414.86 points.
Britain's FTSE 100 trades 0.1 percent down at 7,030.64 points, while mid-cap FTSE 250 gained 0.2 percent to 18,705.63 points.
Germany's DAX rose 0.5 percent at 11,408.40 points; France's CAC 40 trades 0.3 percent higher at 5,047.32 points.
Commodities Recap
Crude oil prices surged, extending gains for the third straight session on hopes that supply cuts will be agreed at OPEC's meeting on Dec. 6. International benchmark Brent crude was trading 1.5 percent up at $67.61 per barrel by 1016 GMT, having hit a low of $65.20 on Tuesday, its lowest since mid- March. U.S. West Texas Intermediate was trading 1.2 percent up at $57.18 a barrel, after falling as low as $54.79 on Tuesday, its lowest since Nov. 2017.
Gold prices rallied to a 1-week high earlier in the session, as investors sought safe-haven assets amid fears of a chaotic departure for Britain from the European Union. Spot gold was 0.2 percent up at $1,215.93 per ounce by 1018 GMT, having hit a high of $1216.69 on Tuesday, its highest since Nov. 9. U.S. gold futures were flat at $1,215.3 per ounce.
Treasuries Recap
The U.S. Treasuries remained steady during the late afternoon session ahead of today’s industrial production release for the month of October, which is expected to show that output rose for the fifth consecutive month. The yield on the benchmark 10-year Treasuries hovered around 3.120 percent, the super-long 30-year bond yields remained tad higher at 3.368 percent and the yield on the short-term 2-year remained nearly 1 basis point higher at 2.870 percent.
The United Kingdom’s gilts lost ground during the afternoon session, after remaining highly on the upper-end yesterday, owing to uncertainties over Brexit negotiations. The yield on the benchmark 10-year gilts climbed nearly 2-1/2 basis points to 1.392 percent, the super-long 30-year bond yields jumped 4 basis points to 1.900 percent and the yield on the short-term 2-year traded 2-1/2 basis points higher at 0.725 percent.
The German bunds traded slightly lower during the afternoon session on the last trading day of the week after the Eurozone’s consumer price inflation (CPI) for the month of Eurozone met market expectations, remaining unchanged from that in September. The German 10-year bond yields, which move inversely to its price, rose nearly 1-1/2 basis points to 0.370 percent, the yield on the 30-year note edged nearly 1 basis point higher to 1.039 percent and the yield on short-term 2-year too traded tad higher at -0.654 percent.
The Australian government bonds surged during Asian session tracking a similar movement in the United States Treasuries after chaos struck over Brexit negotiations as UK Minister Dominic Raab resigned on late Thursday. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged nearly 4-1/2 basis points to 2.685 percent, the yield on the long-term 30-year bond slumped 4 basis points to 3.199 percent and the yield on short-term 2-year traded nearly 2-1/2 basis points lower at 2.063 percent.
