Market Roundup
• British PM May says firmly believe draft withdrawal agreement is best that could be negotiated.
• British PM May says this deal delivers on the vote of the referendum.
• No-deal Brexit would cost Britain 6 pct of GDP, IMF warns.
• Euro zone GDP growth rate confirmed at four-year low.
• Oil rebounds from steep selloff as OPEC, partners discuss supply cut.
• US Oct Core CPI YY, NSA, 2.1%, 2.2% forecast, 2.2% previous.
• US Oct CPI YY, NSA, 2.5%, 2.5% forecast, 2.3% previous.
• US Oct CPI MM, NSA, 0.3%, 0.3% forecast, 0.1% previous.
• US 9 Nov w/e Mortgage Market Index, 316.7, 316.2 previous.
• US 9 Nov w/e Mortgage Refinance Index, 824.7, 861.8 previous.
• US 9 Nov w/e MBA 30-Yr Mortgage Rate, 5.17%, 5.15% previous.
• US Oct Real Weekly Earnings MM, 0.1%, 0.2% forecast, 0.2% previous, -0.1% revised.
• Defiant Italy sets stage for budget showdown with EU.
• Emerging economies see debt rise $1 trln in Q2, face record redemptions –IIF.
• Bitcoin drops to 1-year low as slump persists; ethereum down sharply.
• CA Nov TR IPSOS PCSI, 57.05, 55.25 previous.
• Bank of Canada sees slightly higher perceived risk to financial system.
Looking Ahead - Economic Data (GMT)
• 14 Nov 23:50 Japan 10 Nov w/e Foreign Bond Investment (JPY), -167.3 bln previous
• 15 Nov 00:30 Australia Oct Employment, 20.0k forecast 5.6k previous
• 15 Nov 00:30 Australia Oct Unemployment Rate, 5.1% forecast, 5.0% previous
• 15 Nov 00:30 Australia Oct Participation Rate, 65.5% forecast, 65.4% previous
• 15 Nov 01:30 China Oct China House Prices YY, 7.9% previous
Looking Ahead - Events, Other Releases (GMT)
• 14 Nov 23:00 Fed's Jerome Powell participates in Q&A before Fed Dallas's Global Perspective Speaker Series - Dallas
• 15 Nov 08:15 First Deputy Governor of Sweden Kerstin af Jochnick discusses e-krona and participates in discussion of central bank digital currencies at Euro Finance Week – Frankfurt
• 15 Nov 12:15 ECB's Benoit Coeuré at CPMI academic conference - Basel, Switzerland
• 15 Nov 13:00 BoE's Silvana Tenreyro speaks at BoE conference - London
• 15 Nov 13:10 ECB's Peter Praet speaks at Credendo Trade Forum 2018 - Brussels
• 15 Nov 14:35 ECB's Luis de Guindos speaks at General Annual Meeting of Foreign Bankers Association - Amsterdam
• 15 Nov 15:00 Fed's Randal Quarles gives semiannual testimony, "Federal Reserve's Supervision and Regulation of the Financial System" before Senate Banking Committee - Washington
• 15 Nov 16:30 Fed's Jerome Powell participates in Community Listening Session on Post-Hurricane Harvey Recovery Efforts - Houston
• 15 Nov 18:00 Fed Atlanta's Raphael Bostic participates in discussion on "Monetary Policy in a New Economic and Geopolitical Environment" before Global Interdependence Center - Madrid
• 15 Nov 20:00 Fed Minneapolis's Neel Kashkari participates in moderated Q&A session with the Minnesota AgriGrowth Council - Minneapolis
• 15 Nov N/A BoE hosts "2nd conference on Forecasting at Central Banks" at 20 Moorgate Auditorium (to Nov. 16) - London
• 15 Nov N/A Bank of Slovenia's Primoz Dolenc speaks at banking conference at Brdo pri Kranju – Ljubljana
Currency Summaries
EUR/USD is likely to find support at 1.1250 levels and currently trading at 1.1307 levels. The pair has made session high at 1.1350 and hit lows at 1.1261 levels. The euro rose higher against US dollar on Wednesday as British Prime Minister Theresa May obtained backing from her cabinet on her Brexit deal, which she now has to convince parliament to approve. Hopes the U.K. parliament would approve a draft accord for Britain to leave the European Union have bolstered the pound and provided some support for the euro.The single currency has been under pressure down by uncertainty on how EU officials would react to Italy's latest fiscal proposal after they rejected a version of it last month for violation of certain EU rules. Italy re-submitted its draft budget for next year to the European Commission with the same growth and deficit assumptions but with falling debt, the new draft showed. The euro was up 0.18 percent at $1.1306, erasing an earlier loss tied partly to weak regional growth data. An index that tracks the dollar versus a basket of six major currencies was down 0.45 at 96.867 after hitting a 16-month high of 97.693 on Monday.
GBP/USD is supported in the range of 1.2833 levels and currently trading at 1.2993 levels. It reached session high at 1.3045 and dropped to session low at 1.2880 levels. Sterling scaled back its earlier losses against the dollar on Wednesday after Britain's Prime Minister Theresa May said her cabinet backed her Brexit deal. The decision by British Prime Minister Theresa May's cabinet of top ministers to back a draft Brexit agreement was made by majority rather than unanimous, a senior eurosceptic Conservative lawmaker said on Wednesday. Sterling has risen more than 1 percent from the 2018 lows of below $1.27 in August as expectations of a Brexit deal have grown in recent weeks before Britain officially leaves the European Union at the end of March 2019. The strength in both the euro and pound pushed the dollar lower. The greenback retreated further from a 16-month peak against a basket of currencies. Traders brushed off a government report on U.S. consumer prices that showed domestic inflation grew at a moderate annual pace in October, although they recorded their biggest monthly increase in nine months as expected. In late U.S. trading, sterling was last trading at $1.2993, up 0.19 percent on the day.
USD/CAD is likely to find support at 1.3180 levels and is trading at 1.3240 levels. It has made intraday high at 1.3264 and lows at 1.3205 levels. The Canadian dollar was little changed against its U.S. counterpart on Wednesday, holding near its weakest level since July, as the recent sell-off in oil lost some momentum and the greenback declined broadly. The price of oil, one of Canada's major exports, rose on hopes for output cuts after a steep drop a day earlier, while a gauge of global stock markets fell for a fifth straight session as declines in tech and financial shares pressured Wall Street. The U.S. dollar declined against a basket of currencies as British Prime Minister Theresa May obtained backing from her cabinet on her Brexit deal, boosting the euro and sterling. Data showing U.S. consumer prices grew in line with analysts forecasts in October also weighed on the greenback. It reinforced the view domestic inflation is increasing at a moderate pace. The Canadian dollar was last trading nearly unchanged at 1.3240 to the greenback, or 75.56 U.S. cents. The currency earlier matched Tuesday's low of 1.3264, which was its weakest in nearly four months.
USD/JPY is supported around 113.07 levels and currently trading at 113.63 levels. It peaked to hit session high at 114.16 and made session lows at 113.25 levels. The dollar declined against Japanese yen on Wednesday after data showed U.S. consumer prices increased at a moderate pace, easing some concerns about the rising lending rates in the world's largest economy. U.S. consumer prices increased by the most in nine months in October amid gains in the cost of gasoline and rents, pointing to steadily rising inflation that likely will keep the Federal Reserve on track to raise interest rates again next month. The Labor Department said on Wednesday its Consumer Price Index rose 0.3 percent last month after edging up 0.1 percent in September. In the 12 months through October, the CPI increased 2.5 percent, picking up from September's 2.3 percent rise. Economists polled by had forecast the CPI climbing 0.3 percent and the core CPI gaining 0.2 percent in October. The U.S. central bank left interest rates unchanged last Thursday, but is expected to increase borrowing costs in December for a fourth time this year. In its statement after last week's policy meeting, the Fed noted that annual inflation measures "remain near 2 percent. The dollar was 0.14 lower versus the Japanese yen at 113.63. The yen touched a six-week low of 114.20 on Monday.
Equities Recap
European shares hit their lowest in two weeks on Wednesday in a broadbased sell-off across oil, mining, technology and banking stocks amid renewed worries about a global economic slowdown and Italy's budget crisis deepens.
UK's benchmark FTSE 100 closed down by 0.3 percent, the pan-European FTSEurofirst 300 ended the day down by 0.65 percent, Germany's Dax ended down by 0.6 percent, France’s CAC finished the day down by 0.6 percent.
Wall Street stocks fell on Wednesday, with the S&P 500 notching a fifth straight day of losses as financial stocks were hit by fears that regulations on the banking industry would tighten once the Democratic Party takes control of the U.S. House of Representatives.
Dow Jones closed down by 0.82 percent, S&P 500 ended down by 0.75 percent, Nasdaq finished the day down by 0.89 percent.
Treasuries Recap
U.S. Treasury yields fell on Wednesday, as investors fretted about renewed weakness on Wall Street, which could signal much deeper problems in the world's largest economy.
U.S. 30-year yields slipped to 3.350 percent, after earlier sliding to a two-week trough of 3.334 percent, compared with Tuesday's 3.367 percent.
On the short end, U.S. two-year yields fell to a two-week low of 2.837 percent, down from 2.895 percent on Tuesday. Two-year yields were last at 2.862 percent.
Commodities Recap
Gold rose 1 percent on Wednesday, helped by a slight retreat in the dollar following a rally and as some investors covered their short positions after the metal held the key $1,200 level.
Spot gold was up 1 percent at $1,214.14 per ounce at 13:43 p.m. EST (1843 GMT). This was the metal's biggest one-day gain in nearly two weeks. Prices had slipped to their lowest since Oct. 11 at $1,195.90 in the previous session. U.S. gold futures settled up $8.70, or 0.72 percent, at $1,210.10.
Oil rose nearly 2 percent on Wednesday, recouping some of the previous session's heavy selloff, on growing prospects that the Organization of the Petroleum Exporting Countries and allied producers would cut output at a meeting next month to prop up prices.
Brent crude settled up 65 cents, or 1 percent, at $66.12 a barrel, after hitting a session high of $67.63.
U.S. crude futures rose 56 cents cents, or 1.01 percent, to settle at $56.25 a barrel, after sliding for 12 straight sessions to the lowest since November 2017.
