Market Roundup
- Coming-of-age public holiday in Japan
- PBOC sets Yuan mid-point at 6.9262 / dollar vs last close 6.9330 vs 6.8668 fix Fri– Reuters
- Yuan mid-point rate represents biggest daily percentage fall in more than 6 months – Reuters
- Hong Kong's overnight Yuan deposit rate falls to around 10 pct from 87 pct - Reuters News
- Australian building approvals +7.0% in Nov from revised -11.8% previous - Reuters
- Private house approvals -0.2% from -3.4% previous - Reuters
- British prime minister May says will set out plan for Britain, including right deal for Brexit over coming weeks– Reuters
- Scotland's first minister Sturgeon says knows little of British PM's plans for Brexit - Reuters
- Scotland's Sturgeon says "unacceptable" lack of knowledge on Brexit - Reuters
- Chinese state tabloid warns Trump, “end one China policy and China will take revenge”- Reuters
Economic Data Ahead
- (0200 ET/0700 GMT) Germany Trade Balance, EUR, SA bln EU Nov 20.50 previous
- (0200 ET/0700 GMT) Germany Industrial Output MM % Nov 0.30
- (0200 ET/0700 GMT) Germany Exports MM SA % Nov 0.50
- (0200 ET/0700 GMT) Germany Imports MM SA % Nov 1.30
- (0300 ET/0800 GMT) Slovakia Foreign Trade Balance* mln EU Nov 455.60
- (0315 ET/0815 GMT) Switzerland Retail Sales YY % Nov -0.50
- (0400 ET/0900 GMT) Italy Unemployment Rate % Nov 11.60
- (0430 ET/0930 GMT) Eurozone Sentix Index Jan 10.00
- (0500 ET/1000 GMT) Eurozone Unemployment Rate % Nov 9.80
Key Events Ahead
- No Significant Event Scheduled
FX Beat
DXY: The dollar rallied across the board after mixed U.S. employment report strengthened expectations of three U.S. interest rate hikes in 2017. The greenback against a basket of currencies traded 0.2 percent higher at 102.39, drifting away from a low of 101.30 hit on Thursday, it’s lowest since Dec. 14. FxWirePro's Hourly Dollar Strength Index stood at 26.64 (Neutral) by 0500 GMT.
EUR/USD: The euro declined, extending losses from the previous session, as the greenback advanced despite a below expectations non-farm payroll report. On Friday, the major initially rose a 1week high, however, it eased to close at 1.0531, as the case for more interest rate hikes supported the dollar. The European currency trades 0.1 percent down at 1.0524, pulling further away from a peak of 1.0622 hit in the previous session, its highest since Dec 30. FxWirePro's Hourly Euro Strength Index stood at 91.55 (Slightly Bullish) by 0400 GMT. Investors’ await the German November industrial production data and the current account/trade balance figures, ahead of Eurozone's Sentix investor confidence and comments from Fed’s Rosengren and Lockhart for further cues on the pair. Immediate resistance is located at 1.0550, a break above targets 1.0600. On the downside, support is seen at 1.0504 (9-EMA), a break below could drag it till 1.0480 (21-DMA).
USD/JPY: The dollar rallied above the 117.00 handle, as mixed U.S. payrolls report released on Friday supported the case for more interest rate hikes this year. The U.S. economy added 156K jobs, below estimates of 178K, however, upbeat Average Hourly Earnings - a gauge of wage inflation, counterbalanced the initial disappointment. The major trades 0.5 percent higher at 117.48, pulling further away from a low of 115.07 hit in the previous session, its lowest since Dec. 14. Markets focus now shifts on speeches by Chicago Fed C. Evans and Richmond Fed J. Lacker for further momentum on the pair. Trading in the pair is likely to remain subdued, with Japanese markets closed in observance of a National holiday. FxWirePro's Hourly Yen Strength Index stood at -98.61 (Slightly Bearish) by 0400 GMT. Immediate resistance is located at 117.80 (Dec -28 High), a break above targets 118.00. On the downside, support is seen at 116.54, a break below could take it near 116.04.
GBP/USD: Sterling slumped, extending previous session losses as the dollar rallied, underpinned by the performance of US 10-year yields. Moreover, worries about the economic impact as a result of the referendum vote to leave the EU last June will continue to weigh on the major. Sterling trades 0.4 percent down at 1.2222, drifting further away from a high of 1.2431 hit on Thursday, it’s highest since Dec.19. FxWirePro's Hourly Sterling Strength Index stood at -101.06 (Highly Bearish) by 0400 GMT. Markets attention will remain on the UK Halifax House Price figures, ahead of Fed speeches. Immediate resistance is located at 1.2290 (7-EMA), a break above could take it near 1.2361 (21-DMA). On the downside, support is seen at 1.2200, a break below targets 1.2100. Against the euro, the pound trades 0.5 percent down at 86.13 pence, having hit a fresh 1-week low of 86.14 earlier in the day.
AUD/USD: The Australian dollar gained, reversing some of its previous session losses after data showed the economy's approvals to build new homes bounced in November. Building approvals rose 7 percent in November, compared with estimates of a 5 percent increase, however, it did not fully reverse the sharp declines of 11.8 percent recorded in October. The Aussie trades 0.22 percent up at 0.7309, having hit a high of 0.7356 last week, it’s highest since Dec. 16. FxWirePro's Hourly Aussie Strength Index stood at 87.25 (Slightly Bullish) by 0500 GMT. Investors will continue to digest Australian economic data, ahead of the Federal Reserve speeches due later in the day. Immediate support is seen at 0.7268 (9-EMA), a break below could drag it till 0.7238 (10-DMA). On the upside, resistance is located at 0.7350, a break above targets 0.7400.
NZD/USD: The New Zealand dollar hovered away from 3-week peaks as the greenback strengthened following the strong U.S. wage growth data release. Moreover, the major is likely to remain on the downside, as expectations of Federal Reserve interest rate hike as early as March boosted the bid tone around the U.S. dollar. The Kiwi trades 0.05 percent up at 0.6957, having hit a high of 0.7043 on Friday, it’s strongest since Dec. 16. FxWirePro's Hourly Kiwi Strength Index was at -81.98 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of comments from Fed’s Rosengren and Lockhart due later in the day. Immediate resistance is located at 0.7050 (Dec 16 High), a break above could take it till 0.7100. On the downside, support is seen at 0.6980 (21-DMA), a break below could drag it near 0.6950.
Equities Recap
Asian shares nudged higher, following overnight strong gains on the Wall Street, as the dollar rallied against its major peers after the U.S. payrolls data reflected upbeat underlying wage growth, boosting the case for more rate increases this year.
MSCI's broadest index of Asia-Pacific stocks outside Japan rose 0.3 percent.
Australia's S&P/ASX 200 index gained 0.94 percent at 5,809.50 points and South Korea's KOSPI was trading 0.10 percent up at 2,051.17 points.
Shanghai composite index rose 0.4 percent to 3,168.23 points, while CSI300 index was trading 0.45 percent higher at 3,362.46 points.
Hong Kong’s Hang Seng was trading 0.2 percent higher at 22,549.99 points. Taiwan shares shed 0.3 percent to 9,342.42 points.
Commodities Recap
Crude oil prices slightly edged down as Iran raised exports undermining efforts by other oil producers to curb a global fuel oversupply, while U.S. drillers increased activity for a 10th week. International benchmark Brent crude was trading 0.1 percent lower at $56.87 per barrel by 0403 GMT, having touched a high of $57.44 in the previous session, its strongest since Jan 3. U.S. West Texas Intermediate crude rose 0.05 percent at $53.69 a barrel, after rising as high as $54.29 on Friday.
Gold prices gain, reversing some of its previous session losses, as investor shifted attention on more rate hike views from the U.S. Federal Reserve. Spot gold was trading 0.2 percent up at $1,174.77 an ounce by 0408 GMT, having hit a 1-month high of $1184.81 an ounce on Thursday. The safe-haven metal rose nearly two percent last week, recording its biggest weekly percentage rise since early November. U.S. gold futures were unchanged at $1,173.80 per ounce.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.4212 percent higher by 0.003 bps, while 5-year yield was up by 0.003 bps at 1.9255 percent.
The Australian government bonds slid as investors moved away from safe-haven instruments following weakness in the U.S. Treasuries. The yield on the benchmark 10-year Treasury note jumped nearly 7 basis points to 2.44 percent, the yield on the 15-year note rose 5 basis points to 1.55 percent and the yield on short-term 2-year rose 5 basis points to 2.57 percent.
The New Zealand government bonds suffered at the time of closing on tracking rout in the global debt market. In intraday trading, the yield on the benchmark 10-year bond rose 6-1/2 basis points to 3.26 percent, the yield on 7-year note jumped 6 basis points to 2.90 percent and the yield on the short-term 2-year note bounced 4-1/2 basis points to 2.26 percent.
