Market Roundup
- Malaysia's October Trade Surplus at 12.16 Bln Rgt vs Reuters Poll 9.05 Bln Rgt
- Malaysia's October Imports -0.4 Pct vs -4.3 Pct Forecast In Reuters Poll
- Malaysia's Exports To China +25.9 Pct On-Yr, To Us +30.5 Pct On-Yr
- Japan Nov Consumer Confid. Index* Increase To 42.6 Vs Prev 41.5
- Japan Oct real wages +0.4% y/y, total cash earnings +0.7%, overtime +1.2%.
- BPCE launches Y105.2 bln 5-tranche samurais via MUFJ, Mizuho, Natixis et al.
- Santander UK sells Y30 bln 3/5-yr pro-bonds via Mizuho, Nomura.
- PBOC Xing - Yuan SRD basket entry starting point for financial reforms -RTRS.
- Foreign CB US debt holdings +$1.883 bln to $3.324 trln week-ended Dec 2, Treasuries +$2.74 bln to $3.006 trln, agencies -$1.217 bln to $272.113 bln.
- NY Fed- Swaps with foreign CBs $135 mln Dec 2 week, BoJ $1 bln, ECB $134 mln.
- Lipper - US bond funds saw $2.1 bln outflows week-ended Dec 2.
- ECB/Austria CB Nowotny - Property price bubbles possible - ORF TV.
- Australia Oct retail sales +0.5% m/m, as forecast.
- NZ Nov ANZ commodity price index -5.6% m/m, -15.3% y/y, Oct +7.1%, -11.6%.
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Oct industrial orders, +1.2% m/m forecast; last -1.7%.
- (0300 ET/0800 GMT) Spain Oct industrial output; last +3.8% y/y.
- (0315 ET/0815 GMT) Switzerland Nov CPI, unch m/m, -1.3% y/y forecast; last +0.1%, -1.4%.
- (0330 ET/0830 GMT) Sweden Oct industrial output, -0.8% m/m, +3.9% y/y forecast; last +2.0%, +6.3%.
- (0330 ET/0830 GMT) Sweden Oct new mfg orders; last +32.8% y/y.
- (0830 ET/1330 GMT) United States Nov non-farm payrolls, +200k forecast; last +271k.
- (0830 ET/1330 GMT) United States Nov unemployment, 5.0% forecast; last 5.0%, participation 62.4%.
- (0830 ET/1330 GMT) United States Nov average earnings, +0.2% m/m forecast; last +0.4%.
- (0830 ET/1330 GMT) United States Oct int'l trade bal, $40.5 bln deficit forecast; last $40.8 bln deficit.
Key Events Ahead
- N/A UN COP 21 conference in Paris (till December 11).
- N/A Bank of Greece annual monetary policy report.
- N/A UK GBP0.5/2.5/2.0 bln 1/3/6-month treasury bill auctions.
- (0300 ET/0800 GMT) Buba Nagel, Beermann, Austria CB Nowotny at Berlin monetary workshop.
- (0400 ET/0900 GMT) OPEC meeting in Vienna/11:00 press conference.
- (0400 ET/0900 GMT) Norges Bank regional network survey.
- (0700 ET/1200 GMT) Bank of England Gov Carney, Michael Bloomberg discuss climate change in Paris.
- (0900 ET/1400 GMT) BoI Gov Visco speaks at Rome conference.
- (1015 ET/1515 GMT) Philly Fed forum, Philly Fed Harker, St Louis Bullard et al to speak.
- (1145 ET/1645 GMT) NY Fed Dudley, ECB Pres Draghi at Economic Club of NY meeting.
- 5th December 2015 Buba Dombret speech in New York.
FX Beat
USD: Heavy selling in the dollar against the euro made the greenback to lose ground against many of its peers. The dollar index was back to a 1-month low of 97.591 from a 12-1/2-year peak of 100.510 after Euro's rally on Thursday. It dropped 2.1 percent, its worst performance since March 2009 as it last stood at 98.041. Against the yen, it dropped towards the bottom of a 122.23-123.77 range and last stood at 122.63 yen. The hammered greenback looks to the closely-watched U.S. non-farm payrolls due later in the day for relief. November payrolls were not impressive as 271,000 new jobs were created in October, but expectations are on a addition of 200,000 jobs for last month.
EUR/USD: The Euro posted its biggest 1-day surge in nearly 7 years, rose to 1.0981 against the greenback, as the policy easing by the European Central Bank fell short of market expectations. Markets disaapointed by a bare-minimum easing package by the ECB in which the C.bank cut its deposit rate by a mere 10 basis points and extended its asset buys by 6 months. The pair is currently trading at 1.0918, EUR bulls appear to face exhaustion in Asia, after witnessing almost 450 pips rally in the previous session. More volatility likely as markets now brace for the US non-farm payrolls data due in the NY session. Immediate support seen at 1.090 (Oct 29 Low), while next hurdle in sight is located at 1.0931 (50-DMA)
EUR/JPY: Against the yen, the common currency rallied 2.5 percent to hit highs of 134.50. Rally stopped just shy of 100 DMA at 134.61 which is the immediate resistance for EUR/JPY. The pair has shed some of its gains and was last trading at 133.90, slipping below the 134 handle. Techs point to further correction, daily Stochs have approached overbought region and RSI is also biased lower. 133.37 (Oct 23 low) is immediate support on the downside, breaks below could see the pair at 133.15 levels.
USD/JPY: A December U.S. rate hike seemed almost baked in, barring any shocks in Friday's nonfarm payrolls report. But euro's explosive rally sent the dollar index reeling to a 1-month low, weighing heavily on the dollar. USD/JPY broke below 21 DMA in yesterday's trade, falling to as low as 122.30. The pair ran through fresh bids near the mid-point of the 122 handle at Tokyo start, and is now attempting a tepid bounce towards hourly 10-SMA located at 122.69. Immediate resistance is now located at 122.78 (10 DMA) and further ahead at 122.90 21 DMA.
AUD/USD: The Australian and New Zealand dollars held near recent peaks on Friday with further easing by the European Central Bank putting them on track to end the week sharply higher against their U.S. counterpart. Underpinning was data showing Australian retail sales boasted a third month of solid growth in October. The Australian dollar held at 0.7321 against the USD, having climbed to an 8-week peak of 0.7362 on Thursday. Heavy resistance was found at the Oct. 12 trend high of 0.7382. The pair is up 1.9 percent this week, partly due to its attractive government bond yields which compare with negative rates in Germany and France on the short end of the curve.
NZD/USD: The Kiwi edged down against the US dollar to 0.6675 from a one-month high of 0.6706 set the previous session and it was on track with a weekly gain of 2.1 percent. NZD will struggle to break through 0.6700 in the near-term, but there is a possibility if U.S. employment reports tonight misses forecasts. The euro also rallied hard on the kiwi to reach NZ$1.6363, having gained 2.3 percent overnight. NZD/USD has cleared cloud top resistance and is currently trading at 0.6683. 0.6702 (61.8 % Fibo 0.6897-0.6428 fall) is the next hurdle on the upside and cloud-top at 0.6662 is the immediate support on the downside.
USD/CAD: The Canadian dollar was steady against the greenback on Thursday, with a rebound in crude oil prices, but dropped against the euro to C$1.4602, having touched C$1.4647its weakest level in five weeks after the European Central Bank eased policy disappointed investors.
USD/CNY: China's yuan steady against the dollar at the open in line with a stronger midpoint rate at 6.3851 per dollar set by the Central Bank prior to market open, firmer than the previous fix of 6.3982, and higher than the previous day's close 6.3972 . The offshore yuan was trading down 0.61 percent away from the onshore spot at 6.4315 per dollar. The spot market opened at 6.3867 per dollar and was trading at 6.3925 in early trade, 47 pips firmer than the previous close and 0.12 percent away from the midpoint.
Equities Recap
Asian shares dropped in global markets on Friday after the European Central Bank's stimulus package fell short of markets high expectations.
MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.8 percent, extending losses for the week to 0.4 percent while China's CSI300 index slipped 0.9 percent, minimising gains for the week to 4.6 percent.
Australia's S&P/ASX 200 Index ended down 1.56 pct at 5,146.10 points while Nikkei closed down 2.18 pct at 19,504.48 with Seoul Shares down by 0.97 pct.
Commodities Recap
Gold held on to overnight gains on Friday as it looked set to snap a 6-week losing streak as a slump in the dollar buoyed the metal above 2010 lows ahead of the key U.S. non-farm payrolls data later in the session. Spot gold was steady at $1,062.40 an ounce by 0348 GMT and was rallying for a 0.3 percent gain for the week.
Crude oil prices extended gains ahead of an OPEC meeting on Friday as traders hedged their positions in case of a unexpected outcome. U.S. crude was trading up 23 cents at $41.31 per barrel at 0343 GMT, while Brent was up 19 cents at $44.03.
Treasuries Recap
U.S. 10-Year Treasuries yield stood at 2.2906 percent down by 0.037.
Australian government bond futures dropped in a bearish movement of the curve, with the 3-year bond contract off 6 ticks at 97.820, the 10-year contract slipped 11 ticks to 97.0200, while the 20-year contract also eased 11 ticks to 96.5200.
New Zealand government bonds eased, sending yields between 3 and 4.5 basis points higher.
Canadian government bond prices were lower across the maturity curve with the 2-year price down 6.5 Canadian cents to yield 0.656 percent and the benchmark 10-year stumbled C$1.02 to yield 1.627 percent.
