Market Roundup
- FOMC ViceChair Fischer - Fed has done everything to avoid liftoff surprise, told by other CBs to just do it, Asia effect on global growth big, Fed meetings getting interesting.
- Atlanta Fed Lockhart- Fed may need to shift inflation gauge after hike.
- NY Fed VP Potter - Confident counterparties to help implement monetary policy.
- Fed survey - Dealers complained about Fed message on rate hikes.
- Fed Gov Powell - Benefits in US repo market clearing.
- Foreign CB US debt holdings +$4.572 bln to $3.307 trln week-ended Nov 18, Treasuries +$4.965 bln to $2.987 trln, agencies -$214 mln to $274.632 bln.
- NY Fed swaps with foreign CBs $150 mln Nov 18 week, ECB $148 mln, BoJ $2 mln.
- Lipper - US stocks funds post $2.2 bln outflows Nov 18 week.
- RBA ChiefEcon Heath - Economy not as strong as RBA would like but terms of trade cycle managed quick well, AUD fall boosting exports - Reuters.
Looking Ahead - Economic Data (GMT)
- 07:00 Germany Oct producer prices, -0.2% m/m, -2.0% y/y eyed; last -0.4%, -2.1%.
- 09:30 UK Oct PSNB; last bln.
- 09:30 UK Oct - ex-banks, GB P6.0 bln expected; last bln.
- 09:30 UK Oct PSNCR; last bln.
- 14:00 Belgium Nov consumer confidence index; last -8.0.
- 15:00 EZ Nov consumer confidence index - flash, -7.5 eyed; last -7.7.
- 16:00 US Nov KC Fed manufacturing, composite indices; last +4, -1.
Looking Ahead - Events, Auctions (GMT)
- N/A Frankfurt EuroFinance Week- ECB Pres Draghi, others among speakers.
- N/A UK DMO /2.5/2.0 bln 1/3/6-month treasury bill auctions.
- 08:00 ECB/BdF de Galhau speech in Paris.
- 08:40 Riksbank DepGov Jochnick at Stockholm conference.
- 14:00 St Louis Fed Bullard speech in Fort Smith, Arkansas.
- 16:15 NY Fed Dudley in discussion on US economy at Hofstra University, NY.
- 19:15 NY Fed Dudley event at Canon, USA headquarters in New York.
- Sat SF Fed Williams, ECB Coeure at UC Berkeley conference.
- Sun US CommSec Pritzker, USTR Froman in Guangzhou, China.
FX Beat
USD: The dollar was stable against the yen and euro after retreating from a recent rally at 7-month highs against a basket of currencies. It was firm at 122.895 yen after dropping 0.6 percent on Thursday, snapping a four-day winning run. The dollar index stood at 99.070, pulling back from a peak of 99.853 hit on Wednesday, its highest since mid-April.
EUR/USD: The euro was little changed at $1.0718 after gaining 0.7 percent overnight. It is still on track to lose 0.5 percent on the week. The EUR complex was soggy and more subdued after short-covering rally yesterday. It may test 1.0600 next week, 1.0617 (Wednesday's low). Plenty option expiries again nearby - 1.0600 bln, 40-50 786 mln. 1.07 bln, 30-40 1.968, 50 452 mln, 65-70 1.437, 1.08 952, 15 924.
USD/JPY: The pair was better bid in Asia and posted a modest gain by rising from 122.85 to 123.06. It was heavy at 123.00+. EUR/JPY was trading in the range of 131.68-93, GBP/JPY was in 187.67-188.08, AUD/JPY rose from 88.28 to 88.59, NZD/JPY also climbed from 80.54 to 81.14.
GBP/USD: Cable was choppy in Asia, it was trading lower at 1.5270 early before bouncing to 1.5298 later. GBP was initially on back-foot after weak retail sales data yesterday. EUR/GBP was soggy and was trading in 0.7006-20 range, it may re-test 0.6979-82 low this week.
USD/CHF: The pair was hovering between 1.0125-54 in Asia, on the lower plane. It was relatively bid and not far from recent 1.0220 trend high/CHF eased from 1.0875 to 1.0864, away from 1.0900 high yesterday.
AUD/USD: The Australian dollar fetched $0.7207 after rising from Thursday's low of $0.7103. It has gained 1 percent for the week, having proved resilient to sliding commodity prices. A sustained break above the 100-day moving average of $0.7213, a level tested three times this month would be a bullish signal and open the way to $0.7384. It made even bigger strides against the euro which fell to A$1.4912, not far from a three-month low of A$1.4865 touched on Aussie held near 3-month highs against the yen.
NZD/USD: The New Zealand dollar gained 0.5 percent to $0.6597, adding to a gain of 1.4 percent on Thursday when upbeat domestic producer prices data triggered a rally, It was up 0.4 percent this week. Resistance was found near $0.6580. Short-covering flows dominated in thin trading.
USD/CNY: China's yuan rose on Friday after the PBoC set a firmer midpoint and some major state-owned banks sold dollars to offset corporate dollar demand, traders said. The central bank set the midpoint rate at 6.3780 per dollar prior to market open, 0.02 percent firmer than the previous fix 6.3791. The spot market opened at 6.3780 per dollar and was changing hands at 6.3809 by midday, 0.05 percent stronger than the previous close. Offshore yuan was trading 0.43 percent weaker than the onshore spot at 6.4083 per dollar.
Equities Recap
Asian shares were flat and on track post weekly gains. While commodity prices were under pressure, with copper hovering around 6-1/2-year lows at $4,598.50, down 4.7 percent so far this week.
Japan's Nikkei closed up 0.10 pct at 19,879.81. Mainland Chinese shares were flat, with Shanghai composite trading near a 3-month high struck on Tuesday.
MSCI's broadest index of Asia-Pacific shares outside Japan was almost unchanged on the day, though has recorde gains of 1.7 percent so far this week. Seoul shares ended the day up 0.01 pct. Australia's S&P/ASX 200 Index closed up 0.09 pct at 5,247.50 points.
Treasuries Recap
Long-dated U.S. debt yields dipped, with the 30-year yield touching a 2-week low of 2.988 percent on Thursday. It last stood at 3.011 percent. 10-year Treasury yield stood at 2.250 percent vs U.S. close of 2.246 percent on Thursday.
Australian government bond futures climbed, with the 3-year bond contract up a tick at 97.880. The 10-year contract added 3.5 ticks to 96.0850, while the 20-year contract gained 4 ticks to 96.5600. New Zealand government bonds were mixed. Yields inched higher among the shorter-dated bonds.
Canadian government bond prices rose across the maturity curve, with the 2-year price up 4 Canadian cents to yield 0.619 percent and the benchmark 10-year rising 24 Canadian cents to yield 1.623 percent.
Commodities Recap
Oil futures rose in early Asian trading, but stayed near 3-month lows after a persistent supply glut cut prices by up to 13 percent since the start of November. Front-month Brent futures for January climbed 13 cents at $44.31 a barrel as of 0329 GMT, following the previous session's 4 cent gain.U.S. crude's West Texas Intermediate futures higher 5 cents at $40.59 a barrel after settling down 21 cents at $40.54 in the previous session.
Spot gold rose by 0.1 percent to $1,083.26 an ounce by 0312 GMT. Prices touched the weakest in more than five years at $1,064.95 an ounce on Wednesday and are set to close the week little changed. U.S. gold rose 0.5 percent to $1,083 an ounce.
