Market Roundup
- Baby step but no big bang: ECB warily starts pulling back from loose money
- Japan Sept core CPI +0.7% y/y, +0.8% eyed, Tokyo Oct core +0.6% vs +0.5%
- Tokyo Core rise best since Mar ’15, EconMin Motegi hints deflation over
- China's Sept industrial profits surge most in nearly six years
- China's focus on quality of growth to be positive for its ratings - Moody's
- Rare China sovereign bond sees robust global demand, tight pricing
- Australian court rules deputy PM ineligible for parliament, govt loses majority
- Australia Q3 PPI, 0.2% q/q, 1.6% y/y vs 0.5%, 1.7%
- Catalonia's leader rules out snap election, crisis deepens
- German coalition talks stumble on migration, climate
- U.S. House narrowly passes measure paving way for Trump tax cuts
- Yellen also seen leaving post, focus on Taylor-Powell for FOMC Chair
- Confidence in UK house price outlook hits 5-year low - Halifax
- N. Korea says to release S. Korean fishing boat; Mattis visits DMZ
- New Saudi mega-city will be listed publicly, crown prince says - Rtrs Exclusive
- Volatility fails to scare investors in U.S. stock, bond funds -Lipper
- Foreign CB US debt holdings -318 mln to $3.365 trln Oct 25 week
- Treasuries +$1.207 bln to $3.038 trln, agencies -1.574 bln to +$261.78 bln
Economic Data Ahead
- (0245 ET/0645 GMT) France Oct Consumer Confidence, 101 eyed, last 101
Key Events Ahead
- (0300 ET/0700 GMT) Norges Bank Deputy Governor Egil Matsen gives a speech - Oslo
- (0315 ET/0715 GMT) ECB's Praet will speak at Goethe University in Frankfurt
- (0645 ET/1045 GMT) ECBs Ignazio Angeloni will participate at Goethe University in Frankfurt
- (0730 ET/1130 GMT) Bundesbank's Jens Weidmann gives a speech at Paris
FX Beat
DXY: The dollar index advanced to an over 3-month high as Trump is expected to announce his candidate for the next central bank chair before his upcoming trip to Asia in early November. The greenback against a basket of currencies traded 0.1 percent up at 94.75, having touched a high of 94.87 earlier, its highest since Oct. 6. FxWirePro's Hourly Dollar Strength Index stood at -7.20 (Neutral) by 0500 GMT.
EUR/USD: The euro slumped to 3-month lows after the European Central Bank extended its bond purchases and reduced the chances that it would hike interest rates in 2018. The European currency traded 0.1 percent down at 1.1635, having touched a low of 1.1624 earlier in the day, its lowest since Jul. 26. FxWirePro's Hourly Euro Strength Index stood at -59.21 (Bearish) by 0400 GMT. Investors’ attention will remain on ECB Praet's speech, ahead of U.S. gross domestic product price index and personal consumption expenditure prices. Immediate resistance is located at 1.1670, a break above targets 1.1710. On the downside, support is seen at 1.1612 (July 26 Low), a break below could drag it lower 1.1600.
USD/JPY: The dollar rallied to a 3-1/2 month high against the yen after the U.S. House of Representatives voted on Thursday to clear a procedural path for a Republican tax bill. The major was trading 0.2 percent up at 114.15, having hit a high of 114.26 earlier, its highest since Jul. 11. FxWirePro's Hourly Yen Strength Index stood at 83.10 (Slightly Bullish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. gross domestic product price index and personal consumption expenditure prices for further clues on the pair. Immediate resistance is located at 114.30, a break above targets 114.80. On the downside, support is seen at 113.71 (5-DMA), a break below could take it near 113.01 (10-DMA).
GBP/USD: Sterling declined, extending previous session losses, as investors attention remained on whether the Bank of England will hike its interest rate for the first time in more than a decade at the end of its next week’s meeting. The major traded 0.3 percent down at 1.3124, having hit a high of 1.3279 the day before, its highest since Oct. 17. FxWirePro's Hourly Sterling Strength Index stood at 77.35 (Slightly Bullish) by 0400 GMT. Investors’ focus will remain on U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3186 (5-DMA), a break above could take it near 1.3219 (21-DMA). On the downside, support is seen at 1.3100, a break below targets 1.3030. Against the euro, the pound was trading 0.1 percent down at 88.65 pence, having hit a high of 88.50 pence on Thursday, its highest since Oct. 10.
AUD/USD: The Australian dollar tumbled to a 3-1/2 month low in early trade after the government lost its one-seat majority in the lower house following a High Court ruling that made the deputy prime minister Barnaby Joyce ineligible to remain in parliament as he was also a citizen of New Zealand when elected. The Aussie trades 0.2 percent down at 0.7642, having hit a low of 0.7625 earlier, it’s lowest since Jul. 11. FxWirePro's Hourly Aussie Strength Index stood at -31.99 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7625 (Session Low), a break below targets 0.7600. On the upside, resistance is located at 0.7682 (78.6% retracement of 0.7883 and 0.7625), a break above could take it near 0.7751.
NZD/USD: The New Zealand dollar steadied after slumping to a 5-1/2 month trough earlier as investors remain worried that the coalition government will take a hardline stance on immigration and foreign investment and shake up the mandate of the Reserve Bank of New Zealand. The Kiwi trades flat at 0.6836, having touched a low of 0.6818 earlier, its lowest level since May 11. FxWirePro's Hourly Kiwi Strength Index was at -0.88 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6909 (5-DMA), a break above could take it near 0.6970. On the downside, support is seen at 0.6800, a break below could drag it till 0.6780.
Equities Recap
Asian shares rallied as technology shares were boosted by upbeat earnings from U.S. high-tech companies, while the euro fell to a 3-month low against the dollar after the European Central Bank extended its bond purchases.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Tokyo's Nikkei rose 1.3 percent to 22,011.16 points, Australia's S&P/ASX 200 index eased 0.2 percent to 5,903.20 points and South Korea's KOSPI advanced 0.7 percent to 2,497.78 points.
Shanghai composite index rose 0.2 percent to 3,412.85 points, while CSI300 index was trading 0.4 percent up at 4,010.02 points.
Hong Kong’s Hang Seng was trading 0.7 percent higher at 28,407.67 points. Taiwan shares shed 0.2 percent to 10,709.11 points.
Commodities Recap
Crude oil prices eased after rising to multi-week highs in the previous session, amid tightening market expectations, supported by comments from Saudi Arabia's Crown Prince backing the extension of OPEC-led output cuts. International benchmark Brent crude was trading 0.2 percent down at $59.38 per barrel by 0445 GMT, having hit a high of $59.53 the day before, its highest since Sept. 26. U.S. West Texas Intermediate was trading 0.3 percent lower at $52.63 a barrel, after rising as high as $52.83 on Thursday, its highest since Sept. 28.
Gold prices steadied after hitting a near three-week low earlier in the day, as the dollar gained against the euro after the European Central Bank extended its bond-buying programme. Spot gold trading 0.1 percent up at $1,267.67 per ounce by 0453 GMT after touching its lowest since Oct. 6 at $1265.34 and was on track for an about 1 percent weekly decline. U.S. gold futures for December delivery shed 0.1 percent to $1,268.00.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.461 percent higher by 0.007 bps, while 5-year yield was 0.08 bps up at 2.079 percent.
The Japanese government bonds remained mixed on the last trading day of the week as investors defied movements amid a muted session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose a little above 1/2 basis point to 0.07 percent, the yield on long-term 30-year hovered around 0.87 percent while the yield on short-term 1-year traded tad lower at -0.14 percent.
The Australian government bonds slumped on the last trading day of this week following weakness in the U.S. Treasuries on speculation that the new Federal Reserve Chair will be hawkish. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 2.461 percent, the yield on the long-term 30-year note also jumped 1 basis point to 2.970 percent and the yield on short-term 2-year traded nearly 1 basis point higher at 1.627 percent.
The New Zealand bonds slumped at the time of closing as investors drifted apart from safe-haven assets despite the country’s ongoing political turmoil surrounding the appointment of ministers after the formation of the coalition government. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1 basis point to 3.05 percent, the yield on 20-year note jumped 2 basis points to 3.60 percent and the yield on short-term 2-year ended 1 basis point higher at 2.08 percent.
