Market Roundup
- After cabinet backing, May girds for Brexit battle in UK parliament
- Fed's Powell: U.S. 'really strong' even with housing, other risks to watch
- Pence says "empire and aggression" have no place in Indo-Pacific
- China sends written response to U.S. trade reform demands -U.S. govt sources
- Europe ready to retaliate if U.S. imposes auto tariffs -EU trade chief
- As U.S. Congress taps leaders, House's McCarthy fends off rival
- Modi government, Indian central bank set for uneasy truce -sources
- Australia Oct Employment, 32.8k, 20.0k f'cast, 5.6k prev, 7.8k rvsd
- Australia Oct Participation Rate, 65.6%, 65.5% f'cast, 65.4% prev, 65.5% rvsd
- Australia Oct Unemployment Rate, 5.0%, 5.1% f'cast, 5.0% prev
- China Oct China House Prices (yy), 8.6%, 7.9% prev
Economic Data Ahead
- (0430 ET/0930 GMT) Great Britain Oct Retail Sales (mm), 0.2% f'cast, -0.8% prev
- (0430 ET/0930 GMT) Great Britain Oct Retail Sales Ex-Fuel (mm), 0.2% f'cast, -0.8% prev
- (0430 ET/0930 GMT) Great Britain Oct Retail Sales (yy), 3.0% f'cast, 3.0% prev
- (0430 ET/0930 GMT) Great Britain Oct Retail Sales Ex-Fuel (yy), 3.3% f'cast, 3.2% prev
- (0600 ET/1100 GMT) Great Britain Nov TR IPSOS PCSI, 49.38 prev
- (0600 ET/1100 GMT) France Nov TR IPSOS PCSI, 41.72 prev
- (0600 ET/1100 GMT) Germany Nov TR IPSOS PCSI, 57.43 prev
Key Events Ahead
- N/A Bank of England hosts "2nd conference on Forecasting at Central Banks" at 20 Moorgate Auditorium, London (to Nov. 16).
- (0800 ET/1300 GMT) BoE MPC memeber Silvana Tenreyro speaks at BoE conference in London.
- (0815 ET/1310 GMT) Keynote speech by ECB Chief Economist Peter Praet at the Credendo Trade Forum 2018 in Brussels, Belgium.
- (0915 ET/1435 GMT) Keynote speech by ECB Vice President Luis de Guindos at General Annual Meeting of Foreign Bankers Association at Amsterdam.
- (1000 ET/1500 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles gives semiannual testimony, "Federal Reserve's Supervision and Regulation of the Financial System" before the Senate Banking Committee in Washington.
- (1130 ET/1630 GMT) Fed Chairman Jerome Powell participates in Community Listening Session on Post-Hurricane Harvey Recovery Efforts in a Low-to-Moderate-Income Houston Neighborhood hosted by the Dallas Fed Houston Branch, in Texas.
- (1300 ET/1800 GMT) Atlanta Fed President Raphael Bostic participates in a moderated discussion before the Global Interdependence Center "Central Banking Series: Madrid," in Madrid, Spain.
- (1500 ET/2000 GMT) Minneapolis Fed President Neel Kashkari participates in a moderated question-and-answer session with the Minnesota AgriGrowth Council in Minneapolis.
- (1600 ET/2100 GMT) Ontario Finance Minister Vic Fedeli will present the fall economic statement of Canada's biggest province in Toronto.
FX Beat
DXY: The dollar index eased after U.S. government stated that China had sent a response to U.S. demands for trade reform but gave no further details. The greenback against a basket of currencies trades 0.2 percent down at 96.84, having touched a high of 97.69 on Monday, its highest since June 2017. FxWirePro's Hourly Dollar Strength Index stood at -111.11 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro rose, extending gains for the third straight session after European Union Trade Commissioner Cecilia Malmstrom stated that the EU has a list of prospective retaliation targets ready in case U.S. President Donald Trump imposes auto tariffs on the bloc's members. The European currency traded 0.3 percent up at 1.1334, having touched a low of 1.1215 on Monday, its lowest since June 2017. FxWirePro's Hourly Euro Strength Index stood at 71.79 (Bearish) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and EZ trade balance, ahead of the U.S. retail sales, unemployment benefit claims, import, and export price index and speeches from FOMC members Quarles, Bostic, and Fed chair Powell. Immediate resistance is located at 1.1368 (November 9 High), a break above targets 1.1420 (October 26 High). On the downside, support is seen at 1.1302 (October 31 Low), a break below could drag it till 1.1264.
USD/JPY: The dollar declined, hovering towards a 1-week low touched in the previous session, amid broader concerns about Brexit and global trade tensions. The major was trading 0.1 percent down at 113.48, having hit a high of 114.23 on Monday, its highest since October 4. FxWirePro's Hourly Yen Strength Index stood at -49.08 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, unemployment benefit claims, import, and export price index and speeches from FOMC members Quarles, Bostic, and Fed chair Powell. Immediate resistance is located at 114.55 (October 4 High), a break above targets 115.00. On the downside, support is seen at 113.07 (November 5 Low), a break below could take it lower 112.60 (November 1 Low).
GBP/USD: Sterling steadied above the 1.3000 handle after Britain's Prime Minister Theresa May stated that her cabinet backed her Brexit deal. However, she will need to get the parliament to approve the agreement. The major traded 0.2 percent up at 1.3009, having hit a high of 1.3071 on Wednesday; it’s highest since November 08. FxWirePro's Hourly Sterling Strength Index stood at 68.31 (Bullish) 0500 GMT. Investors’ attention will remain on the UK retail sales and BoE MPC member Tenreyro speech, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3106 (November 6 High), a break above could take it near 1.3181 (October 15 High). On the downside, support is seen at 1.2936 (October 23 Low), a break below targets 1.2900. Against the euro, the pound was trading 0.1 percent down at 87.10 pence, having hit a high of 86.55 on Tuesday, it’s highest since Apr. 18.
AUD/USD: The Australian dollar rallied to a 1-week peak after data showed domestic employment was surprisingly strong in October as firms took on more full-time staff and the unemployment rate stayed at its lowest since 2012. The Australian employers created a net 32,800 new jobs in October, beating forecasts of 20,000, while full-time jobs rose 42,300 and the unemployment remained at 5.0 percent. The Aussie trades 0.6 percent up at 0.7275, having hit a high of 0.7281 earlier; it’s highest since November 8. FxWirePro's Hourly Aussie Strength Index stood at 131.81 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7205 (November 6 Low), a break below targets 0.7164 (October 13 Low). On the upside, resistance is located at 0.7300, a break above could take it near 0.7345.
NZD/USD: The New Zealand dollar surged, as the greenback tumbled against a basket of currencies. The Kiwi trades 0.2 percent up at 0.6802, having touched a high of 0.6808 on Wednesday, its highest level since November 7. FxWirePro's Hourly Kiwi Strength Index was at 105.86 (Highly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6832 (July 31 High), a break above could take it near 0.6880. On the downside, support is seen at 0.6720 (August 3 Low), a break below could drag it below 0.6687 (July 3 Low)
Equities Recap
Asian shares rallied, boosted by a bounce in Chinese equities on signs China and the United States may be heading towards de-escalate their trade dispute.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.7 percent.
Tokyo's Nikkei declined 0.2 percent to 21,803.62 points, Australia's S&P/ASX 200 index surged 0.1 percent to 5,736.00 points and South Korea's KOSPI gained 0.2 percent to 2,071.80 points.
Shanghai composite index rose 1.01 percent to 2,658.79 points, while CSI300 index traded 0.9 percent up at 3,232.38 points.
Hong Kong’s Hang Seng traded 1.0 percent lower at 25,901.35 points. Taiwan shares added 0.4 percent to 9,826.46 points.
Commodities Recap
Crude oil prices surged, despite increasing supply going into a market in which consumption is expected to slow down. International benchmark Brent crude was trading 0.1 percent up at $65.88 per barrel by 0508 GMT, having hit a low of $65.20 on Tuesday, its lowest since mid- March. U.S. West Texas Intermediate was trading 0.1 percent down at $55.93 a barrel, after falling as low as $54.79 on Tuesday, its lowest since Nov. 2017.
Gold prices edged up, extending gains for the third straight session, as the dollar retreated further from a 16-month peak against a basket of currencies. Spot gold rose 0.1 percent at $1,211.40 per ounce at 0515 GMT, having hit a low of $1199.82 on Tuesday, its lowest since Oct. 11. U.S. gold futures were flat 0.1 percent at $1,203 per ounce.
Treasuries Recap
The Japanese government bonds traded flat amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.110 percent, the yield on the long-term 30-year note remained nearly flat at 0.870 percent and the yield on short-term 2-year fell 6 basis points to -0.134 percent.
The Australian government bonds slumped across the curve during Asian session following the better-than-expected October employment report, which witnessed a big jump in full-time jobs. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 2-1/2 basis points to 2.728 percent, the yield on the long-term 30-year bond also jumped 2-1/2 basis points to 3.238 percent and the yield on short-term 2-year up 3 basis points to 2.090 percent.
The New Zealand government bonds fared better, with yields down 2.5 basis points at the long end of the curve.
The Canadian government bond prices were higher across the yield curve in sympathy with U.S. Treasuries. The two-year rose 6.5 Canadian cents to yield 2.27 percent and the 10-year climbed 24 Canadian cents to yield 2.428 percent.
