Market Roundup
- Singapore October all items CPI -0.8 pct y/y (Reuters poll -0.5 pct)
- Taiwan October Unemployment Rate 3.79% S/Adj
- New Zealand S/Adj Net Permanent & Long Term Visitors +6210 in Oct
- NZ Short Term Visitors +8.9% in Oct Vs Year Ago
- LME Nickel Extends Losses Falls more than 4.0% on China Concerns
- LME Copper Drops more than 2% to Six Year Low below $4,500 on China
- U.S. Crude Falls more than 2.0% to around $41/Bbl
- Euro Falls below 1.0617, Hits 7-Month Low
- PBOC Sets Yuan Mid-Point at 6.3867 / Dlr Vs Last Close 6.3850
- Argentina's Scioli Concedes Defeat in Presidential Election
- Eurogroup Meeting to Go Ahead In Brussels as Planned Monday despite High Security Alert -EU Presidency
- Venezuelan Oil Minister Eulogio Del Pino says we cannot allow OPEC to get into a Price War; We Need to do something to Balance the Market
- Tehran - Venezuelan Oil Minister Says Russia Will Not Attend OPEC Informal Meeting on Dec. 3
- Tehran - Venezuelan Oil Minister Says if OPEC does not Change its Output Policy, Oil Prices Could Fall into Mid-20s In 2016
Economic Data Ahead
- (0300 ET/ 0800 GMT) France Markit Mfg Flash PMI
- (0300 ET/ 0800 GMT) France Markit Serv Flash PMI
- (0300 ET/ 0800 GMT) France Markit Comp Flash PMI
- (0330 ET/ 0830 GMT) Germany Markit Comp Flash PMI
- (0330 ET/ 0830 GMT) Germany Markit Service Flash PMI
- (0330 ET/ 0830 GMT) Germany Markit Mfg Flash PMI
- (0400 ET/ 0900 GMT) EZ Markit Comp Flash PMI
- (0400 ET/ 0900 GMT) EZ Markit Mfg Flash PMI
- (0400 ET/ 0900 GMT) EZ Markit Serv Flash PMI
Key Events Ahead
- (0600 ET/ 1100 GMT) BELGIUM 10Y B 0.800% 22/06/25 . . EUR1.5-2.0B
- (0600 ET/ 1100 GMT) BELGIUM 13Y B 5.500% 28/03/28 . . TOTAL
FX Beat
USD: Prospect of more policy easing in Europe benefited the U.S. dollar, while activity in Asian shares was crimped by a holiday in Japan. Against a basket of currencies the dollar firmed 0.4 percent to 99.949.
USD/JPY: Increased volatility seen in the pair despite national holiday in Japan. The rising demand for the greenback after a series of hawkish Fed speaks last week boosts the major beyond 123 handle. USD/JPY tested hourly 100-SMA at 123.18, day's range was 123.26/122.80. Markets will continue to digest the latest Fed speak ahead of the US manufacturing PMI and existing home sales data due later today. Immediate resistance is seen at 123.64 (Nov 20 High), while on the downside, immediate support is located at 122.97 (10-DMA) below which 122.54 (20-DMA) would be tested.
AUD/USD: Euro weakness has helped the Antipodean currencies against their U.S. counterpart, though both remain vulnerable to weakening commodity prices. The Aussie stood at $0.7185, having fallen from an early peak of $0.7249 in part due to a drop in copper prices. Support was found at $0.7185 and resistance near $0.7250, a level tested four times in as many weeks. Trading activity during Asian hours was thinned due to a public holiday in Japan.
EUR/AUD: The Australian dollar held near four-month highs against a soggy euro as expectations of further easing by the ECB underpinned demand for carry trades. EUR/AUD dropped to 1.4696, its lowest since July, down around 1.5 percent on Friday, and was last trading at 1.4782 after paring some of Friday's losses. The pair has retraced over 50 % Fibo of the 1.3677 to 1.6584 (Apr to Aug rise), momentum studies, 5, 10 & 20 DMA's trend south - bearish setup in place. A sustained break under 1.4695 could see a retracement all the way to 1.4400 and then 1.4360 (76.4 % Fibo of Apr to Aug rise) with little chart support seen until then. 200 DMA at 1.4797 which gave way on Friday is now the initial resistance ahead of 1.4869 (5 DMA).
EUR/USD: Renewed buying interest seen in the US dollar knocking-off the major to fresh multi-month troughs. There is speculation that US Fed might hike discount rates by 75 bpbs in a meeting today. On the higher side major support is around 1.0720 and break above targets 1.0770/1.0800. Overall bearish invalidation only above 1.08300. The pair's minor resistance is around 1.06800/1.07200. The pair's major support is around 1.0600 and break below targets 1.0525/1.0500 in short term.
NZD/USD: Continued rout in base metals, especially copper weighing on commodity currencies like the NZD. The pair was rejected at highs near 0.6605 on Friday, price action has once again dipped below the cloud. News that New Zealand's net migration inflows remain extremely high and are showing no sign of moderating had little impact as inflationary pressure remains very low. The pair opened Asia 0.6575, extended to 0.6580 top before continuing to slip lower now through 0.6519 5-DMA support to 0.6510/11 base. 0.6488 61.8% Fib retrace of Sep/Oct rally is next support below 0.6500, while resistance is located at 0.6546 (cloud base) ahead of 0.6606 (38.2 % Fibo Oct 15th - Nov 18th fall). NZD losses vs JPY around 0.5%, vs AUD more modest at 0.1%
Equities Recap
Japanese markets closed for Labour Thanksgiving Day.
Elsewhere equities were quieter, MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.2 percent.
South Korea's main index gained 0.7 percent while Australian stocks added 0.31 percent.
Commodities Recap
The strength of the dollar kept commodity prices under pressure. Gold extended losses on Monday, falling towards a near-six-year low reached last week, pressured by a robust dollar and upbeat comments from Federal Reserve officials on a possible U.S. rate hike next month.
Spot gold dropped 0.7 percent to $1,070.36 an ounce by 0320 GMT, down for a 13th session in the 16 trading days this month. The metal declined to $1,064.95 last week, the lowest since February 2010.
Copper slipped to a fresh six-and-a-half year low, as traders bet metals prices had further to fall given China's slowing factory demand.
Brent crude oil has dropped 1.05 percent to $44.19 a barrel in Asian trade along with other commodities prices.
Treasuries Recap
Australian government bond futures fell, with the three-year bond contract down 3 ticks at 97.830, pulling close to five-month lows. The 10-year contract shed 3.5 ticks to 97.0300, while the 20-year contract eased 4 ticks to 96.5000.
New Zealand government bonds eased a tad, sending yields 2 basis points higher across the curve.
Yields on two-year German debt hit their lowest ever at negative 38 basis points, while U.S. yields were at their highest since mid-2010 after Draghi, last week offered the strongest hint yet that the ECB will unveil fresh stimulus measures at its Dec. 3 policy meeting.
