Market Roundup
- RBNZ survey - Q4 1-yr inflation expectations 1.51%, 2-yr 1.85%.
- China Commerce Ministry : Trade situation more severe this year than last year, facing increasing downward pressure
- China central bank: To expand Singapore RQFII quota to 100 bln yuan
- LME copper drops 2 pct, falls below $4,600 a tonne as selling intensifies over China demand worries
- CFTC IMM CTA data - Specs boost USD bets to mid-August high, JPY, EUR, GBP, AUD, MXN and NZD all sold, CAD exceptions, some shorts pared.
- RBA Nov 3 meeting minutes - Left rates unch given firmer economic prospects, subdued inflation affords scope for further ease, AUD adjusting to commodity decline boosting demand for domestic production, services - Reuters.
- RBA AsstGov Kent - Scope for commodity price rebound, if commodity prices were to fall further then need for AUD further fall - AFR.
- (0400 ET/ 0900 GMT) Italy Sep trade balance - global/EU; last bln and E470 mln surpluses.
- (0400 ET/ 0900 GMT) Norway Q3 GDP - all/mainland, +0.2% and +0.1% q/q eyed; last -0.1%, +0.2%.
- (0430 ET/ 0930 GMT) UK Oct CPI, +0.1% m/m, -0.1% y/y eyed; last -0.1%, -0.1%.
- (0430 ET/ 0930 GMT) UK Oct RPI, +0.1% m/m, +0.9% y/y eyed; last -0.1/+0.8%, RPIX -0.1/+0.9%.
- (0430 ET/ 0930 GMT) UK Oct PPI output, unch m/m, -1.3% y/y eyed; last -0.1%, -1.8%.
- (0430 ET/ 0930 GMT) UK Oct PPI input, +0.2% m/m, -12.0% y/y eyed; last +0.6%, -13.3%.
- (0500 ET/ 1000 GMT) Germany Nov ZEW economic sentiment index, 6.0 eyed; last 1.9.
- (0500 ET/ 1000 GMT) Germany Nov ZEW current conditions index, 55.0 eyed; last 55.2.
- (0830 ET/ 1330 GMT) US Oct CPI, +0.2% m/m, +0.1% y/y eyed; last -0.2%, unch.
- (0830 ET/ 1330 GMT) US Oct - core, +0.2% m/m, +1.9% y/y eyed; last +0.2%, +1.9%.
- (0915 ET/ 1415 GMT) US Oct industrial output, +0.1% m/m eyed; last -0.2%.
- (0915 ET/ 1415 GMT) US Oct capacity utilization, 77.5% eyed; last 77.5%.
- (1000 ET/ 1500 GMT) US Nov NAHB housing market index, 64.0 eyed; last 64.0.
- N/A Riksbank DepGov Skingsley Stockholm speech, Norges Bank Olsen in Bergen.
- N/A ESM E2.5 bln 6-mo, Spain 6/12-mo bill auctions.
- (0230 ET/ 0730 GMT) ECB/Austria CB Nowotny speech in Vienna/13:00 speaks again.
- (0400 ET/ 0900 GMT) ECB Lautenschlager speech at Frankfurt Euro Finance Week conference.
- (0430 ET/ 0930 GMT) ECB refi at fixed 0.05%, E60.5 bln allotment eyed, last bln.
- (0500 ET/ 1000 GMT) BoE DepGov Bailey parliamentary testimony.
- N/A Fed Gov Powell, US Tsy Raskin speak at New York conference.
- (0915 ET/ 1415 GMT) Buba Dombret speech in Frankfurt.
- (1330 ET/ 1830 GMT) Ireland CB Honohan speech at LSE.
- (1600 ET/ 2100 GMT) US Treasury int'l capital flow(TIC) report, last $9.2 bln net overall outflow.
USD/JPY: USD bulls unstoppable, USD/JPY marches higher to test multi-month highs near 123.40. Fresh bid tone near hourly 20-SMA at 123.14 despite Nikkei stall, 123.18 to 123.40 grind up. Risk-on mood supports USD as US yields held steady , diverging CB expectations also supportive. Amid lack of fresh fundamental triggers for the pair in the Asian hours, USD/JPY will continue to track the broader market sentiment. While the US inflation report due later in the NY session is expected to hog the limelight. The pair is currently trading at 123.37, with immediate resisrtance at 123.59 (Nov 9 high) and support at 122.91 (5 DMA).
AUD/USD: RBA ease expectations fade a bit post-November 3 minutes. AUD/USD closed Monday's trade above channel support at 0.7085. The pair trades a narrow range on the day between 0.7108 and 0.7083, but holds above major support at 0.7075. Breaks below could see weakness, pullback upto 0.7060 then looks likely. But as long as 0.7075 support holds, the pair could test 0.7132 and then 0.7160 levels.
GBP/USD: Cable failed to surpass the daily pivot ahead of 1.52 handle and dropped sharply in the late-Asian trades, now testing session lows near 1.5175 region. Decisive break sub-1.5175 area projects test of 1.5133 11/11 hourly low. The pair currently trades at 1.5175, heading towards 10-DMA support placed at 1.5161. The major came under renewed selling pressure after the greenback continued to climb higher against its major competitors amid growing belief in markets that a Dec Fed rate hike is a done deal now. To the upside, the strong resistance can be seen at 1.5229, while immediate support can be seen at 1.5150.
NZD/USD: Price action in the pair dives below the cloud and the pair has made a clean break below the 0.6500 support. Test of 0.6420 levels likely after a global dairy auction to be held early on Wednesday. Dairy prices fell for the second consecutive auction earlier this month and dairy futures suggest a 10 percent fall at Wednesday's auction. Immediate resistance is seen at 0.6511 (Daily cloud top) and support is located at 0.6436 (Oct 6 lows).
GBP/CAD: The pair has once again retreated after making a high of 2.0325 level. It is currently trading around 2.02390. Market eyes UK CPI data which is to be released today for further direction. UK inflation data from ONS is expected to remain unchanged at -0.1% Y-O-Y in Oct and Core CPI is seen steady at 1%. Technically GBP/CAD is facing strong trend line support around 2.020 and any break below targets 2.016/2.008/2. On the higher side major resistance is around 2.33 and break above targets 2.039/2.042.
Equities Recap
Asian stocks rose across the board on Tuesday, relieved after seeing Wall Street take the Paris attacks in stride and surging overnight
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.6 percent, bouncing from a 6-week low struck the previous day on risk aversion triggered by the assault on the French capital.
South Korea's Kospi unofficially closed up 1.17 percent, Australian shares gained 1.84 percent and Shanghai shares climbed 1.7 percent. Japan's Nikkei closed up 1.22 percent.
Commodities Recap
Crude extended gains after the Paris attacks raised geopolitical tensions that were seen to threaten global oil supply.
U.S. crude was up 0.2 percent at $41.80 a barrel after surging 2.4 percent on Monday. Brent crude nudged up 0.2 percent to $44.66 a barrel, adding to overnight gains of 2.2 percent.
Spot gold was little changed at $1,083 an ounce. The precious metal pared gains overnight as an initial flow of flight-to-safety buying after the Paris attacks petered out.
Treasuries Recap
Australian government bond futures pulled closer to recent lows, with the three-year bond contract off 4 ticks at 97.860. The 10-year contract eased 2 ticks to 97.0500, while the 20-year contract shed 3 ticks to 96.5100.
New Zealand government bonds eased, sending yields 2 basis points higher at the long end of the curve.
JGB prices ended the morning session largely unchanged from yesterday in the 20-yr and shorter zone in very quiet trading. At midday, yields on the current 5-yr, 10-yr and 20-yr JGBs are unchanged from yesterday at 0.04%, 0.30% and 1.07%, respectively, while the 30s and the 40s are up 0.5bp at 1.385% and 1.54%, respectively.
