Market Roundup
- China envoy warns of dire consequences if U.S. hardliners hold sway
- Trump says 'not even a little bit happy' with Fed's Powell -report
- UK government, Bank of England to spell out no-deal Brexit risks for economy
- Trump open to deal with Xi at dinner but with conditions -Kudlow
- China not seriously considering U.S. Treasuries as trade war weapon -envoy
- As Trump renews border wall demands, U.S. government shutdown looms
- UK shop prices rise for only third time since 2013 - BRC
- European politicians call for new sanctions on Russia over Ukraine
- New Zealand cenbank to ease mortgage curbs but lift bank capital norms
- Australia Q3 Construction Work Done, -2.8%, 1.0% f'cast, 1.6% prev, 1.8% r'vsd
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Dec Gfk Consumer Sentiment, 10.5 f'cast, 10.6 prev
- (0400 ET/0900 GMT) EZ Oct Money-M3 Annual Growth, 3.5% f'cast, 3.5% prev
Key Events Ahead
- (0200 ET/0700 GMT) Bank of England publishes Financial Stability report in London
- (0705 ET/1205 GMT) Opening remarks by ECB board member Benoit Coeure at the Foreign Exchange Contact Group meeting in Frankfurt, Germany
- (0800 ET/1300 GMT) ECB Vice President Luis de Guindos gives Opening remarks at conference in Luxembourg
- (0930 ET/1430 GMT) Fed holds technical background teleconference to discuss release of the Financial Stability Report, in Washington
- (1020 ET/1520 GMT) ECB board member Peter Praet chairing panel session II on "Investment finance in Europe – a system fit for growth?" in Luxembourg
- (1200 ET/1700 GMT) Federal Reserve Chairman Jerome Powell speaks on "The Federal Reserve's Framework for Monitoring Financial Stability" in New York
FX Beat
DXY: The dollar index held gains near a 2-week peak as Investor attention turned towards Fed Chairman Jerome Powell's speech later in the day, as they look for indications on U.S. rates hikes in 2019. The greenback against a basket of currencies trades 0.05 percent up at 97.35, having touched a high of 97.50 on Tuesday, its highest since Nov 13. FxWirePro's Hourly Dollar Strength Index stood at 111.83 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after falling to a near 2-week low in the previous session on signs of weakening eurozone economic momentum. Moreover, news that the EU government representatives are set to back the European Commission's disciplinary move against Italy over its debt dented the bid tone around the major. The European currency traded 0.1 percent up at 1.1297, having touched a low of 1.1277 on Tuesday, its lowest since Nov. 15. FxWirePro's Hourly Euro Strength Index stood at 39.63 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and EZ M3 money supply, ahead of the U.S. preliminary gross domestic product index, wholesale inventories, goods trade balance. personal consumption expenditures, new home sales and speech from Fed Chair Powell. Immediate resistance is located at 1.1330 (November 12 High), a break above targets 1.1387 (October 30 High). On the downside, support is seen at 1.1263 (November 14 Low)., a break below could drag it till 1.1216 (November 13 Low).
USD/JPY: The dollar rallied to a 2-week peak after Federal Reserve Vice Chair Richard Clarida stated that the Fed should continue to gradually hike interest rates, but it was important to monitor economic data as monetary policy was getting close to a neutral stance. The major was trading 0.1 percent up at 113.86, having hit a high of 114.00, its highest since November 14. FxWirePro's Hourly Yen Strength Index stood at -71.70 (Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. preliminary gross domestic product index, wholesale inventories, goods trade balance, personal consumption expenditures, new home sales and speech from Fed Chair Powell. Immediate resistance is located at 114.14 (November 13 High), a break above targets 114.60. On the downside, support is seen at 113.29 (November 14 Low), a break below could take it lower 112.64 (November 16 Low).
GBP/USD: Sterling consolidated near a 2-week low amid growing doubts over whether British Prime Minister Theresa May can get a Brexit agreement through a divided parliament. The major traded flat at 1.2746, having hit a low of 1.2725 on Tuesday; it’s lowest since November 15. FxWirePro's Hourly Sterling Strength Index stood at -116.27 (Highly Bearish) 0500 GMT. Investors’ attention will remain UK Bank Stress test results and Financial Stability Report, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2819 (November 21 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2723 (November 14 Low), a break below targets 1.2698 (October 31 Low). Against the euro, the pound was trading 0.05 percent down at 88.61 pence, having hit a high of 88.35 on Monday, it’s highest since Nov. 16.
AUD/USD: The Australian dollar rebounded from a 2-week low, as the investors waited for some clarity to emerge on U.S.-China trade. The Aussie trades 0.3 percent up at 0.7242, having hit a low of 0.7199 on Tuesday; it’s lowest since November 14. FxWirePro's Hourly Aussie Strength Index stood at 0.76 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7182 (November 5 Low), a break below targets 0.7154. On the upside, resistance is located at 0.7270 (November 9 High), a break above could take it near 0.7319 (August 17 High).
NZD/USD: The New Zealand dollar rose, extending gains for the third straight session, after Reserve Bank of New Zealand stated that it would ease some restrictions on home lending in a positive step for the housing market. The Kiwi trades 0.2 percent up at 0.6799, having touched a low of 0.6753 on Tuesday, its lowest level November 13. FxWirePro's Hourly Kiwi Strength Index was at 75.22 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6839 (November 15 High), a break above could take it near 0.6921 (June 25 High). On the downside, support is seen at 0.6727 (November 9 Low), a break below could drag it below 0.6700
Equities Recap
Asian shares consolidated within narrow ranges amid conflicting signals on prospects for de-escalating the U.S.-China trade dispute.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei rose 1.1 percent to 21,185.88 points, Australia's S&P/ASX 200 index fell 0.1 percent to 5,725.10 points and South Korea's KOSPI rallied 0.3 percent to 2,105.09 points.
Shanghai composite index surged 0.7 percent to 2,593.78 points, while CSI300 index traded 1.0 percent up at 3,168.72 points.
Hong Kong’s Hang Seng traded 1.1 percent higher at 26,620.16 points. Taiwan shares added 1.1 percent to 9,884.31 points.
Commodities Recap
Crude oil prices surged ahead of an OPEC meeting next week at which the producer cartel is expected to decide some form of supply cut to counter an emerging glut. International benchmark Brent crude was trading 0.3 percent up at $61.01 per barrel by 0511 GMT, having hit a low of $58.42 on Friday, its lowest since October 2017. U.S. West Texas Intermediate was trading 0.3 percent up at $52.24 a barrel, after falling as low as $50.14 on Monday, its lowest since the October 2017.
Gold prices declined, hovering towards an over 1-week low touched in the previous session, weighed down by a robust dollar after a senior U.S. Federal Reserve official reaffirmed the need for a further increase in interest rates. Spot gold was trading down at $1,214.51 per ounce at 0515 GMT, having eased to its lowest level since Nov. 15 at $1,211.82 on Tuesday. U.S. gold futures were down about 0.1 percent at $1,214.
Treasuries Recap
The Japanese government bonds crawled downside ahead of the country’s retail sales and industrial production data for the month of October, scheduled to be released on today and 29 respectively by 23:50GMT. The yield on the benchmark 10-year JGB note, which moves inversely to its price, jumped to 0.099 percent, the yield on the long-term 30-year note remained tad higher at 0.813 percent while the yield on short-term 2-year fell to -0.134 percent, from yesterday’s 0.139 percent.
The Australian government bonds remained tad higher during Asian session as investors’ risk appetite showed downward signs, tracking a similar movement in the United States’ Treasuries. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1/2 basis point to 2.627 percent, the yield on the long-term 30-year bond fell nearly 1 basis point to 3.150 percent and the yield on short-term 2-year traded nearly steady at 2.032 percent.
The Canadian government bond prices were higher across the yield curve, with the two-year up 3.5 Canadian cents to yield 2.221 percent and the 10-year CA10YT=RR rising 23 Canadian cents to yield 2.326 percent. The 10-year yield touched its lowest intraday since Sept. 13 at 2.325 percent.
