Market Roundup
- China, U.S. discuss next stage of trade talks
- Trump considering several candidates for chief of staff -sources
- Brexit in turmoil as UK's May pulls vote to seek changes to EU divorce
- UK MP Blunt sends letter of no confidence to '1922 Committee'-The Times
- Japan keeps distance from FX as U.S automakers target yen manipulation
- Canadian court weighs bail for jailed CFO of China's Huawei
- To quell unrest, France's Macron speeds up tax cuts but vows no U-turn
- Indian rupee, bonds slump after cenbank governor's resignation
- Australia Nov NAB Business Conditions, 11, 12 prev
- Australia Nov NAB Business Confidence, 3, 4 prev
- Australia Q3 Home Price Index, -1.5%, -1.5% f'cast, -0.7% prev
Economic Data Ahead
- (0430 ET/0930 GMT) Great Britain Oct ILO Unemployment Rate, 4.1% f'cast, 4.1% prev
- (0430 ET/0930 GMT) Great Britain Oct Employment Change, 25k f'cast, 23k prev
- (0500 ET/1000 GMT) Germany Dec ZEW Economic Sentiment, -25.0 f'cast, -24.1 prev
- (0500 ET/1000 GMT) Germany DE Dec ZEW Current Conditions, 55.8 f'cast, 58.2 prev
Key Events Ahead
- N/A WTO holds a one-day conference, with speeches from Director-General Roberto Azevedo and World Bank chief economist Penny Goldberg, Geneva
- (0330 ET/0830 GMT) ECB's Luis de Guindos delivers his remarks at the European Statistical Forum, Frankfurt, Germany
- (0430 ET/0930 GMT) BoE publishes Record of the Financial Policy Committee meeting held on November 28, 2018
FX Beat
DXY: The dollar index plunged, as the 10-year Treasury note yield eased to a 3-month low this week on dovish comments from Fed officials, while soft U.S. data further sharpened views on an imminent pause in the tightening cycle. The greenback against a basket of currencies trades 0.1 percent down at 97.11, having touched a low of 96.36 on Monday, its lowest since Nov 22. FxWirePro's Hourly Dollar Strength Index stood at 60.65 (Bearish) by 0500 GMT.
EUR/USD: The euro steadied after falling from a 3-week peak in the previous session on concerns over violent protests in France against President Emmanuel Macron's economic reform. The European currency traded 0.1 percent up at 1.1369, having touched a high of 1.1442 on Monday, its highest since Nov. 20. FxWirePro's Hourly Euro Strength Index stood at 27.38 (Neutral) by 0500 GMT. Investors’ attention will remain on EZ Survey- Economic Sentiment, ahead of the U.S. producer price index. Immediate resistance is located at 1.1401 (November 29 High), a break above targets 1.1455 (November 2 High). On the downside, support is seen at 1.1324 (November 26 Low), a break below could drag it till 1.1305 (November 30 Low).
USD/JPY: The dollar slumped, reversing most of its previous session gains, weighed down by concerns over Beijing's ongoing trade talks with the United States and deepening political turmoil over a Brexit deal. The major was trading 0.2 percent down at 113.11, having hit a low of 112.23 on Monday, its lowest since October 29. FxWirePro's Hourly Yen Strength Index stood at -24.42 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. producer price index. Immediate resistance is located at 113.66 (December 4 High), a break above targets 114.03 (November 28 High). On the downside, support is seen at 112.66 (October 23 Low), a break below could take it lower 112.08 (October 24 Low).
GBP/USD: Sterling edged up after falling to a 20-month low in the previous session as British Prime Minister Theresa May postponed a crucial vote on her Brexit deal, raising the risk of a disorderly exit from the European Union. The major traded 0.2 percent up at 1.2577, having hit a low of 1.2506 on Monday; it’s lowest since mid-April 2017. FxWirePro's Hourly Sterling Strength Index stood at -41.74 (Neutral) 0500 GMT. Investors’ attention will remain on UK labour data, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2600, a break above could take it near 1.2664. On the downside, support is seen at 1.2506 (December 10 Low), a break below targets 1.2460. Against the euro, the pound was trading 0.05 percent down at 90.38 pence, having hit a low of 90.87, it’s lowest since August 29.
AUD/USD: The Australian dollar rebounded, halting a 5-day losing streak as risk-sentiment slightly improved after China's Commerce Ministry stated that Vice Premier Liu He spoke with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer on trade matters. The Aussie trades 0.2 percent up at 0.7205, having hit a low of 0.7178 on Monday; it’s lowest since November 13. FxWirePro's Hourly Aussie Strength Index stood at -89.90 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7164 (November 13 Low), a break below targets 0.7141 (September 17 Low). On the upside, resistance is located at 0.7268 (November 22 High), a break above could take it near 0.7325 (November 19 High).
NZD/USD: The New Zealand dollar rose, extending previous session gains, as signs U.S. and Chinese officials were still talking on trade supported investor sentiment. The Kiwi trades 0.2 percent up at 0.6877, having touched a low of 0.6840 on Monday, its lowest level Nov 29. FxWirePro's Hourly Kiwi Strength Index was at -15.30 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6939 (December 3 High), a break above could take it near 0.6976 (June 15 High). On the downside, support is seen at 0.6816 (November 9 Low), a break below could drag it below 0.6753 (November 27 Low).
Equities Recap
Asian shares consolidated within narrow ranges, amid uncertainties over the prospects for a lasting resolution to a U.S.-China trade dispute and deepening political turmoil over a Brexit deal.
MSCI's broadest index of Asia-Pacific shares outside Japan steadied near 3-week low.
Tokyo's Nikkei declined 0.2 percent to 21,180.51 points, Australia's S&P/ASX 200 index rallied 0.4 percent to 5,575.90 points and South Korea's KOSPI surged 0.1 percent to 2,056.50 points.
Shanghai composite index rose 0.1 percent to 2,586.35 points, while CSI300 index traded 0.1 percent up at 3,146.60 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 25,734.32 points. Taiwan shares added 0.6 percent to 9,707.04 points.
Commodities Recap
Crude oil prices surged after Libya's National Oil Company declared force majeure on exports from the El Sharara oilfield, which was seized at the weekend by a local militia group. International benchmark Brent crude was trading 0.4 percent up at $60.07 per barrel by 0450 GMT, having hit a high of $63.67 on Friday, its highest since November 22. U.S. West Texas Intermediate was trading 0.4 percent up at $51.08 a barrel, after rising as high as $54.20 on Friday, its highest since the December 5.
Gold prices gained, supported by hopes that the U.S. Federal Reserve could pause its rate hike cycle sooner than previously expected. Spot gold was trading 0.2 percent down at $1,246.37 per ounce by 0456 GMT, having touched a high of $1,250.46 on Monday, its highest level since July 11. U.S. gold futures were little changed at $1,250.1 per ounce.
Treasuries Recap
The Australian bond yields recovered from previous lows during Asian session as investors engaged in short-selling amid a muted trading session that witnessed data of little economic significance. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, jumped nearly 2-1/2 basis points to 2.458 percent, the yield on the long-term 30-year bond also rose closely by 2-1/2 basis points to 2.990 percent and the yield on short-term 2-year traded 1 basis point higher at 1.951 percent.
The yields on New Zealand 10-year paper were just above their lowest since late 2016 at 2.46 percent.
The Canadian government bond prices were mixed across a flatter yield curve. The 10-year climbed 19 Canadian cents to yield 2.052 percent. The gap between the 10-year yield and its U.S. equivalent widened by 2.5 basis points to a spread of nearly 80 basis points in favor of the U.S. bond.
