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America's Roundup: Dollar steady as Americans head to the polls, Wall Street ends, Gold dips, Oil prices drop over 1 pct on Iran sanctions waivers-November 11th,2018

Market Roundup

• Trump agenda at stake as voters decide control of U.S. Congress.

• US Sep JOLTS Job Openings, 7.009M, 7.100M forecast, 7.136M 7.293M revised.

• US 3 Nov w/e Redbook y/y, 6.1%, 5.9% previous.

• EU could impose sanctions if no deal with Italy, but no decision yet - Moscovici.

• No deal yet as Irish border holds up Brexit, EU and UK say.

• "Opaque" Chinese FX swaps may mask users' economic ills - French Treasury.

• Oil prices drop over 2 pct on Iran sanctions waivers.

• CA Sep Building Permits m/m, 0.4%, 0.4% forecast, 0.4% previous, -1.1% previous.

Looking Ahead - Economic Data (GMT)

• 6 Nov 21:30 Australia Oct AIG Construction Index, 49.3 previous

• 6 Nov 21:45 New Zealand Q3 HLFS Unemployment Rate, 4.5% forecast, 4.5% previous

• 6 Nov 21:45 New Zealand Q3 HLFS Job Growth q/q, 0.5% forecast, 0.5% previous

• 6 Nov 21:45 New Zealand Q3 HLFS
Participation Rate, 70.9% forecast, 70.9% previous

• 6 Nov 21:45 Labour Cost Index Q3 y/y, 1.9% forecast, 2.1% previous

• 6 Nov 23:50 Japan Oct Foreign Reserves (USD), 1,259.70B previous

• 7 Nov NA China Oct FX Reserves m/m (USD), 3.060T forecast, 3.087T previous

• 7 Nov 00:00 Japan Sep Overtime Pay, 1% previous

• 7 Nov 02:00 New Zealand Oct Reserve Assets Total (NZD), 30634 previous

• 7 Nov 05:00 Japan Sep Coincident Index, 1.4 previous, 0.6 revised

• 7 Nov 05:00 Japan Sep Leading Indicator, 0.5 previous, 0.6 revised

Looking Ahead - Events, Other Releases (GMT)

• NA The U.S. Federal Reserve's Federal Open Market Committee starts its two-day meeting on interest rates in Washington D.C.

• NA ECB governing council holds a non-monetary policy meeting in Frankfurt 

• 01:30 Bank of Japan's Yukitoshi Funo delivers speech, meets business leaders in Kochi, southwestern Japan

• 16:30 Riksbank's Martin Flodén discusses the economic situation and monetary policy in Stockholm

Currency Summaries

EUR/USD is likely to find support at 1.1352 levels and currently trading at 1.1415 levels. The pair has made session high at 1.1429 and hit lows at 1.1390 levels. The euro edged lower against the dollar in the US session on Tuesday as dollar held steady ahead of U.S. midterm elections. Investors are focused on whether congressional elections could disrupt the stellar run of the world's most liquid currency. The elections are expected to help the Democratic Party win control of the U.S. House of Representatives, with Republicans likely to retain their majority in the Senate. Analysts believe a divided Congress will see the dollar dip because it is unlikely that any new fiscal stimulus could be launched to counterbalance forecasts of slowing U.S. economic growth next year. The dollar index, a gauge of its value versus six major peers traded up 0.2 percent at 96.446. It had hit a 16-month high of 97.20 last week. The euro was slightly lower at $1.1415, about one percent above this year's trough of $1.1301 touched on Aug. 15.

GBP/USD is supported in the range of 1.3018 levels and currently trading at 1.3089 levels. It reached session high at 1.3097 and dropped to session low at 1.3058 levels. Sterling strengthened against the dollar on Tuesday as growing hopes of a Brexit deal breakthrough supported sterling. British Brexit Secretary Dominic Raab said "Thumbs Up" on his way out of a weekly cabinet meeting, according to a tweet by the BBC political editor, sending the euro to a five-month low against the British pound. Against the dollar, the pound hit a two-week high at $1.3090. While hopes have grown of a deal covering Britain's exit from the European Union, fuelling a 3 percent rally in the British pound over the last week, domestic opposition from within Prime Minister Theresa May's own Conservative party and parliament has made investors wary of betting big on the pound. Headlines on the progress of Brexit negotiations have made the pound increasingly jumpy. Implied volatility on one-month pound options, a gauge for expected swings in the British currency, is at its highest levels since February.

USD/CAD is supported at 1.3100 levels and is trading at 1.3130 levels. It has made session high at 1.3143 and lows at 1.3138 levels. The Canadian dollar weakened against its U.S. counterpart on Tuesday as Americans began casting votes in U.S. midterm congressional elections that could help shape prospects for the greenback. Investors were focused on whether congressional elections could disrupt the stellar run of the U.S. dollar over recent months. The greenback was little changed on Tuesday against a basket of major currencies. The price of oil, one of Canada's major exports, fell after Washington granted sanctions exemptions to top buyers of Iranian oil. U.S. crude prices were down 0.2 percent at $62.97 a barrel. The value of Canadian building permits increased by 0.4 percent in September from August, matching analysts' estimates, data from Statistics Canada showed. Compared to the same month last year, permit values were down 0.6 percent. The Canadian dollar was last trading 0.1 percent lower at 1.3130 to the U.S. unit, or 76.20 U.S. cents. The currency traded in a range of 1.3106 to 1.3132.

AUD/USD is supported around 0.7182 levels and currently trading at 0.7223 levels. It hit session high at 0.7234 and made session lows at 0.7212 levels. The Australian dollar slipped lower against dollar on Tuesday as markets were cautions ahead of U.S. midterm Congressional elections as policy decisions that could sway the world's largest economy hinge on the results. Investors are bracing for a split Congress, with Democrats taking control of the House of Representatives and Republicans holding their advantage in the Senate, but are mindful that President Donald Trump's victory in 2016 surprised experts. A split Congress would likely reduce trade tensions, while the dollar could come under pressure as it is unlikely any new fiscal stimulus could be launched to counterbalance forecasts of slowing U.S. economic growth next year. Market participants also waited for a two-day Federal Reserve meeting starting on Wednesday to gauge the outlook for U.S. monetary policy.

Equities Recap

European shares ended a choppy session in negative territory on Tuesday as investors punished companies like Zalando that missed expectations and remained cautious while waiting for the results of U.S. mid-term elections.

UK's benchmark FTSE 100 closed down by 0.9 percent, the pan-European FTSEurofirst 300 ended the day down by 0.26 percent, Germany's Dax ended down by 0.1 percent, France’s CAC finished the day down by 0.4 percent.

U.S. stock indexes clung to small gains on Tuesday after losing ground in the late afternoon on investor jitters about making big bets as they awaited the outcome of U.S. midterm congressional elections.

Dow Jones closed up by 0.70 percent, S&P 500 ended up 0.63 percent, Nasdaq finished the day up by 0.67 percent.

Treasuries Recap 

U.S. Treasury yields rose modestly on Tuesday as selling spurred by this week's record amounts of longer-dated government debt supply offset investors' anxiety about the outcome of high-stake U.S. congressional elections.

The yield on benchmark 10-year Treasury notes was up 1.1 basis point at 3.210 percent on moderate volume. It was still below the 7-1/2-year peak of 3.261 percent reached on Oct. 9 during a dramatic bond market selloff.

Commodities Recap

Oil prices fell on Tuesday, with U.S. crude futures sliding to an eight-month low, a day after Washington granted sanction waivers to top buyers of Iranian oil and as Iran said it had so far been able to sell as much oil as it needs to sell.

Brent crude futures fell $1.04 to settle at $72.13 a barrel, a 1.42 percent loss. The global benchmark hit a session low of $71.18 a barrel, lowest since Aug. 16.

U.S. West Texas Intermediate (WTI) crude futures fell 89 cents, or 1.41 percent, to settle at $62.21 a barrel. The session low was $61.31 a barrel, the weakest since March 16.

Gold edged up on Tuesday as investors sought shelter from uncertainty over the outcome of the U.S. midterm elections.

Spot gold rose 0.3 percent to $1,234.94 per ounce as of 1314 GMT, while U.S. gold futures were up 0.4 percent at $1,236.50.
 

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