Market Roundup
• Fed, Republican critics may compromise on oversight after Trump win.
• Oil jumps to highest since mid-2015, Fed hike on the horizon.
• Italian PM unveils new government, but centre-right ally threatens to quit.
• Chile analysts see central bank cutting rate next month.
• Turkey rejigs GDP calculations as output falls for the first time since 2009.
• Brazil's latest political risks tolerable for bargain-hunting investors.
• Mexico industrial output barely rises in Oct falls year-over-year.
• Colombia central bank names Echavarria as new head, replacing Uribe.
Looking Ahead - Economic Data (GMT)
• 0:30 Australia NAB Business Confidence Nov 4 -previous
• 2:00 China Industrial Output YY Nov forecast 6.10%, 6.10% - previous
• 2:00 China Retail Sales YY Nov forecast 10.10%, 10.00% - previous
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.0550 levels and currently trading at 1.0631 levels. The pair has made session high at 1.0651 and hit lows at 1.0590 levels. Euro rose against the dollar on Monday as the dollar slumped as investors were worried about the outcome of Wednesday's Federal Reserve policy meeting. The U.S. central bank is widely expected to raise interest rates this week but the market is not convinced that Fed will promise heavily on rate rises for next year. With a hike largely priced in, focus has turned to what signal the Fed will send on further policy tightening next year and the dollar's nearly four percent rally against a basket of major currencies on Friday in the wake of Republican Donald Trump's U.S. election victory on Nov. 8.The euro rose as much as 0.7 percent against the dollar to a session high of $1.0625 after falling to a one-week low of $1.0526 in early trading. The dollar was last flat against the yen at 115.35 yen erasing early gains of about 0.8 percent that took the greenback to a 10-month high against the Japanese currency of 116.12 yen.
GBP/USD is supported in the range of 1.2632 levels and currently trading at 1.2677 levels. It reached session high at 1.2701 and dropped to session low at 1.2632 levels. Sterling rose against the dollar on Monday as the dollar declined and investors braced for a busy week with the latest top-tier UK economic data releases and Bank of England policy meeting. The greenback retreated on concerns the U.S. Federal Reserve, widely expected to raise interest rates on Wednesday, may also express concern that the greenback's gains have gone too far. Sterling chalked up its first weekly fall against the dollar in four last week, falling 1.1 percent as British lawmakers said they would stick to Prime Minister Theresa May's timetable for Britain leaving the European Union, dampening investors' hopes for a delayed Brexit. This week's UK economic calendar opens on Tuesday with November's inflation figures, which are expected to show a slight rise to 1.1 percent. Prices are expected to spike much higher next year as sterling's weakness feeds through.
USD/CAD is supported at 1.3060 levels and is trading at 1.3128 levels. It has made session high at 1.3148 and lows at 1.3106 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday after oil prices surged to their highest since mid-2015 on the back of a weekend deal by OPEC and non-OPEC producers to curtail output. Oil futures gained as much as 6.5 percent after the Organization of the Petroleum Exporting Countries and other major producers reached their first agreement since 2001 to pare output in a bid to deal with global oversupply. The loonie rose 0.8 percent last week despite the Bank of Canada pointing to "significant" slack in the Canadian economy as it held interest rates steady. The central bank's decision to leave rates unchanged set the stage for a divergence in policy from that of the U.S. Federal Reserve. The Canadian dollar was trading at C$1.3128 to the greenback, or 76.25 U.S. cents, stronger than Friday's close of C$1.3180, or 75.87 U.S. cents.
AUD/USD is supported around 0.7472 levels and currently trading at 0.7495 levels. It hit session high at 0.7504 and made session lows at 0.7482 levels. The Australian dollar strengthened against the dollar on Monday after oil prices surged to their highest since mid-2015 on the back of a weekend deal by OPEC and non-OPEC producers to curtail output. Having eased last week towards 0.7429, the Australian dollar recovered to hit high at $0.7502, remaining with the same $0.7414-$0.7509 trading range it has traveled in the past week. The Federal Reserve is widely expected to hike interest rates for only the second time in a decade at a two-day meeting that begins on Tuesday. But bets are now being placed on the timing of rate hikes next year. Markets were pricing in a nearly 100 percent chance for a quarter percentage point increase to the Fed's target range. The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.6 percent, easing from an earlier 1-1/2-week high of 101.780.
Equities Recap
Europe retreated from an 11-month high on Monday with falls in shares such as Swedish biometric technology firm Fingerprint and Swiss drugmaker Lonza outweighing a rally in oil stocks which reached near 17-month highs.
UK's benchmark FTSE 100 closed down by 1.1 percent, the pan-European FTSEurofirst 300 ended the day down by 0.45 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day down by 0.1 percent.
The S&P 500 and Nasdaq Composite fell on Monday after six sessions of gains, weighed by tech sector stocks, while a rally in energy shares petered out as crude oil gains withered.
Dow Jones closed up by 0.19 percent, S&P 500 ended down 0.12 percent, Nasdaq finished the day down by 0.49 percent.
Treasuries Recap
U.S. Treasury yields rose on Monday, with benchmark 10-year notes climbing to more than two-year peaks, after oil prices increased and as investors braced for a widely expected interest rate increase from the Federal Reserve this week.
In late trading, U.S. 10-year notes were down 4/32, while the yield rose to 2.478 percent from 2.464 percent late on Friday. Earlier, the yield touched 2.528 percent, its highest since Sept. 29, 2014.
U.S. 30-year bonds were down 4/32 with a yield of 3.160 percent, after rising to 3.215 percent, the highest since July 2015.
U.S. three-year notes were flat at 1.407 percent after earlier hitting a two-week high of 1.457 percent.
Commodities Recap
Gold prices turned higher after falling to their lowest in more than 10 months on Monday, as U.S. Treasury yields came off their highs and the U.S. dollar fell ahead of the Federal Reserve meeting.
Spot gold rose 0.3 percent at $1,161.62 an ounce by 2:49 p.m. EST (1949 GMT) after tapping its lowest since Feb. 5 at $1,151.34 an ounce.
U.S. gold futures settled up 0.3 percent at $1,165.80 per ounce.
Oil rose to an 18-month high on Monday after OPEC and some of its rivals reached their first deal since 2001 to jointly reduce output to tackle global oversupply, though prices slipped late in the day.
U.S. crude futures settled up $1.33 at $52.83 a barrel, a 2.6 percent gain, though that was sharply off the day's highs. Prices continued to fall following settlement, with crude up just 98 cents to $52.48 at 3:22 p.m. ET (2022 GMT).
Brent crude futures settled up $1.36 at $55.69 per barrel, a 2.5 percent rise, after hitting a session peak of $57.89, highest since July 2015.
