Market Roundup
- Fed's Powell, in apparent dovish shift, says rates near neutral
- Trump administration to examine tools to raise U.S. tariffs on Chinese autos
- Extreme Brexit could be worse than financial crisis for UK - BoE
- Mood in UK services firms sours ahead of Brexit - CBI
- No swift new EU sanctions on Russia seen after Ukraine sea incident
- IMF's Lagarde says new Ukraine financing program on track
- Japan Oct Retail Sales (y/y), 3.5%, 2.6% f'cast, 2.1% prev, 2.2% r'vsd
- New Zealand Nov NBNZ Business Outlook, -37.1%, -37.1% prev
- Australia Q3 Capital Expenditure, -0.5%, 1.0% f’cast, -2.5% prev, -0.9% r'vsd
- Australia Capex 2018/19, 114.1 bln, 102 bln prev
Economic Data Ahead
- (0245 ET/0745 GMT) France Oct Consumer Spending (m/m), 0.5% f'cast, -1.7% prev
- (0245 ET/0745 GMT) France Q3 GDP Detailed (q/q), 0.4% f'cast, 0.4% prev
- (0355 ET/0855 GMT) Germany Nov Unemployment Chg SA, -10k f'cast, -11k prev
- (0355 ET/0855 GMT) Germany Nov Unemployment Chg SA, -10k f'cast, -11k prev
- (0430 ET/0930 GMT) Great Britain Oct BOE Consumer Credit, 1 bln f'cast, 0.785 bln prev
- (0500 ET/1000 GMT) EZ Nov Business Climate, 0.96 f'cast, 1.01 prev
- (0500 ET/1000 GMT) EZ Nov Economic Sentiment, 109.0 f'cast, 109.8 prev
- (0500 ET/1000 GMT) EZ Nov Industrial Sentiment, 2.5 f'cast, 3.0 prev
- (0500 ET/1000 GMT) EZ Nov Services Sentiment, 13.1 f'cast, 13.6 prev
- (0500 ET/1000 GMT) EZ Nov Consumer Confidence Final, -3.9 f'cast, -3.9 prev
- (0800 ET/1300 GMT) Germany Nov CPI Prelim (y/y), 2.4% f'cast, 2.5% prev
- (0800 ET/1300 GMT) Germany Nov HICP Prelim (y/y), 2.3% f'cast, 2.4% prev
Key Events Ahead
- (0815 ET/1315 GMT) ECB member of the supervisory board Ignazio Angeloni participates in Panel Session III at The Italian Banking Conference 2018 in Milan
- (0830 ET/1330 GMT) Treasury Office of Financial Research and the Cleveland Fed co-sponsor two-day Financial Stability Conference, in Washington
- (1200 ET/1700 GMT) ECB policymaker Francois Villeroy de Galhau speaks on the economic outlook for the eurozone in Rome
- (1400 ET/1900 GMT) U.S. Federal Reserve's Federal Open Market Committee will release the minutes from its November 7-8 policy meeting in Washington
- (1430 ET/1930 GMT) Cleveland Fed President Loretta Mester, Chicago Fed President Charles Evans, Philadelphia Fed President Patrick Harker, Minneapolis Fed President Neel Kashkari, Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan participate in 'Collaboration for Inclusive Economic Development' in Boston
FX Beat
DXY: The dollar index declined to a near 1-week low after Federal Reserve Chairman Jerome Powell said U.S. interest rates were just below neutral. The greenback against a basket of currencies trades 0.1 percent up at 96.74, having touched a high of 97.54 on Wednesday, its highest since Nov 13. FxWirePro's Hourly Dollar Strength Index stood at -52.44 (Bearish) by 0500 GMT.
EUR/USD; The euro rallied after Economy Minister Giovanni Tria stated that Italy is looking for ways to reduce public spending while supporting flagging economic growth in a bid to avoid disciplinary action by the European Commission. The European currency traded 0.2 percent up at 1.1388, having touched a low of 1.1267 on Wednesday, its lowest since Nov. 14. FxWirePro's Hourly Euro Strength Index stood at 65.03 (Neutral) by 0500 GMT. Investors’ attention will remain on a series of data from the Eurozone economies, EZ consumer confidence, EU Financial Stability Review, and ECB President Darghi's speech, ahead of the U.S. personal consumption expenditures, unemployment benefit claims, pending home sales and FOMC latest monetary policy minutes. Immediate resistance is located at 1.1420 (November 16 High), a break above targets 1.1472 (November 20 High). On the downside, support is seen at 1.1325 (November 14 Low), a break below could drag it till 1.1263 (November 26 Low).
USD/JPY: The dollar eased, extending previous session losses after U.S. Federal Reserve Chair Jerome Powell stated that the central bank's policy rate is now just below estimates of a level that neither brakes nor boosts a healthy U.S. economy. The major was trading 0.4 percent down at 113.24, having hit a high of 114.03 on Wednesday, its highest since November 13. FxWirePro's Hourly Yen Strength Index stood at 6.92 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. personal consumption expenditures, unemployment benefit claims, pending home sales and FOMC latest monetary policy minutes. Immediate resistance is located at 114.14 (November 13 High), a break above targets 114.60. On the downside, support is seen at 113.09 (November 15 Low), a break below could take it lower 112.64 (November 16 Low).
GBP/USD: Sterling surged after opposition Labour finance spokesman John McDonnell stated that another Brexit referendum is an option if a vote of no confidence fails to bring down the government or trigger a general election. The major traded 0.1 percent up at 1.2839, having hit a low of 1.2725 on Tuesday; it’s lowest since November 15. FxWirePro's Hourly Sterling Strength Index stood at -24.76 (Neutral) 0500 GMT. Investors’ attention will remain UK consumer credit and mortgage approvals, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2884 (November 19 High), a break above could take it near 1.2926 (November 22 High). On the downside, support is seen at 1.2767 (November 14 Low), a break below targets 1.2723 (November 22 Low). Against the euro, the pound was trading 0.05 percent down at 88.70 pence, having hit a high of 88.10 on Wednesday, it’s highest since Nov. 15.
AUD/USD: The Australian dollar steadied near a 2-week peak, after Australian companies sharply upgraded spending plans for the coming year, boosted by strong earnings and low-interest rates. The Aussie trades 0.2 percent up at 0.7318, having hit a high of 0.7327 on Wednesday; it’s highest since November 16. FxWirePro's Hourly Aussie Strength Index stood at 23.07 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7277 (November 19 Low), a break below targets 0.7228 (November 15 Low). On the upside, resistance is located at 0.7319 (August 17 High), a break above could take it near 0.7350.
NZD/USD: The New Zealand dollar held firm near a 5-month peak after Federal Reserve Chair Jerome Powell said interest rates were just below neutral. The Kiwi trades 0.05 percent up at 0.6872, having touched a high of 0.6887 on Wednesday, its highest level June 26. FxWirePro's Hourly Kiwi Strength Index was at 99.27 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6921 (June 25, 2017 High), a break above could take it near 0.6955 (June 18 High). On the downside, support is seen at 0.6727 (November 9 Low), a break below could drag it below 0.6700
Equities Recap
Asian shares gained, tracking a surge on Wall Street after the Federal Reserve Chairman Jerome Powell suggested it may nearing an end to its three-year rate tightening cycle.
MSCI's broadest index of Asia-Pacific shares outside Japan traded advanced 0.8 percent.
Tokyo's Nikkei rose 0.7 percent to 22,331.76 points, Australia's S&P/ASX 200 index gained 0.6 percent to 5,758.40 points and South Korea's KOSPI rallied 0.4 percent to 2,116.77 points.
Shanghai composite index surged 0.2 percent to 2,605.86 points, while CSI300 index traded 0.2 percent up at 3,183.27 points.
Hong Kong’s Hang Seng traded 0.05 percent lower at 26,675.54 points. Taiwan shares added 0.4 percent to 9,922.13 points.
Commodities Recap
Crude oil prices surged on optimism that trade talks at the G20 meeting could aid the global economy and improve the demand outlook, however, an increase in U.S. crude inventories to their highest in a year limited upside. International benchmark Brent crude was trading 0.8 percent up at $59.16 per barrel by 0503 GMT, having hit a low of $58.42 on Friday, its lowest since October 2017. U.S. West Texas Intermediate was trading 0.9 percent up at $50.77 a barrel, after falling as low as $50.14 on Monday, its lowest since the October 2017.
Gold prices rallied as the dollar faltered following dovish comments from U.S. Federal Reserve Chair Jerome Powell, calming investor concerns over the pace of rate hikes. Spot gold was 0.3 percent up at $1,225.18 per ounce at 0508 GMT, having eased to a low of $1,211.12 on Wednesday, its lowest level since Nov. 15. U.S. gold futures were little changed at $1,223.2 per ounce.
Treasuries Recap
The Australian government bonds remained tad higher during Asian session as investors’ risk appetite showed downward signs, tracking a similar movement in the United States’ Treasuries. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1/2 basis point to 2.605 percent, the yield on the long-term 30-year bond also remained tad lower at 3.130 percent and the yield on short-term 2-year traded nearly steady at 2.014 percent.
The New Zealand government bonds gained, sending yields 2.8 basis points lower at the long end of the curve.
The Canadian government bond prices were higher across much of a steeper yield curve in sympathy with U.S. Treasuries. The two-year rose 3.5 Canadian cents to yield 2.208 percent and the 10-year climbed 11 Canadian cents to yield 2.325 percent. The 10-year yield hit its lowest intraday since Sept. 13 at 2.313 percent.
