Market Roundup
- DE Nov IFO Current Conditions 113.4 vs prev 112.7 rvsd. 112.4 exp
- De Nov IFO Business Climate 102 vs prev 103. 103 exp
- DE Nov IFO Expectations 104.7 vs prev 103.9 rvsd. 104.0 exp
- GB Nov CBI Retail sales balance +7, lowest since Feb. +19 in Oct. +25 exp
- DXY slips from 8 month peak at 100. Plays 99.785/99.466
- EUR/USD fleeting gains to 1.0670, eased to 1.0635. 1.0620 Asia low
- GBP/USD extends to new lows for the move at 1.5101 fm 1.5155
- Strong EUR/GBP rally to 0.7052 but softer then to 0.7034
- Turkish central bank says to maintain tight monetary policy considering inflation expectations, pricing behaviour
- Turkey shoots down Russian war plane on Syria border
- Turkey says F16s warned jet, Russia says plane didn't leave Syrian airspace
- Nato ambassadors to meet at 1600 gmt in Brussels, Turkey to detail Russian shootdown incident -Nato spokeswoman
- Bank of England's Haldane says if UK monetary policy was very accommodative, would expect above trend growth and big pick up in prices
- Metals fair slightly better on softer dollar. Copper +0.1%. Nikel +1.5%
- Majority of British public now wants a 'Brexit', poll reveals - Independent
- BOE Haldane: Balance of risks around GDP growth/infl skewed to downside
- BOE Forbes: UK is seeing a solid recovery, next move in rate will be up
- RBA Stevens: Lower rates not as stimulatory as used to be
- JP PM Abe: Japan needs to raise minimum wage - Rtrs
- Norway Q4 oil survey shows sharper drop than Q3
- (0830 ET/1330 GMT) U.S. Commerce Department releases preliminary numbers for Q3 GDP and corporate profits. The U.S. economy probably grew at a decent pace in Q3 than initially expected. The Department is expected to revise GDP up to a 2.1 percent annual rate, according to a survey of economists, indicating a lesser drag from inventories and stronger consumer spending than previously estimated. The government previously reported that GDP expanded at a 1.5 percent rate in Q3.
- Core PCE prices and PCE prices are likely to remain flat at 1.3 pct and 1.2 pct respectively.
- (0900 ET/1400 GMT) Standard & Poor's releases its S&P Case/Shiller Home Price Index for September. The CaseShiller 20 mm seasonally adjusted measure likely rose 0.3 pct from 0.1 pct in August, while the annual rate is likely unchanged at 5.1 pct.
- (0900 ET/1400 GMT) Mexico's consumer prices are expected to have risen 0.73 percent in the first half of November, while the annual inflation is also expected to have increased 2.48 percent after it cooled to a record low in early October.
- (1000 ET/1500 GMT) The Conference Board's Consumer Confidence Index for November likely rose to 99.5 from 97.6 in October.
- (1030 ET/1530 GMT) Bank of Canada's Review on economy. Bank of Canada Deputy Governor Lynn Patterson will give a presentation on "Promoting Canada's Economic and Financial Well-Being" in Regina as part of the bank's regional outreach program.
- (1045 ET/ 1545 GMT) FedTrade Operation 15-Yr Fannie Mae/Freddie Mac (max $475 mn)
- (1330 ET/ 1830 GMT) FedTrade Operation 30-Yr Ginnie Mae (max $1.025 bn)
USD/JPY: The Japanese yen (along with other safe-havens) gained strength on news about Syria-Turkey border plane crash, taking USD/JPYto session lows near 122.46. USD/JPY was capped below 123 handle on the day after having crawled off last week's low of 122.62; trading has been soggy and volumes light. Position adjustments ahead of Thursday's U.S. Thanksgiving holiday probably weighing on the pair, BoJ minutes will take centre stage in Japan early tomorrow. Correction of recently overbought daily studies is already well underway and could extend upto 122.40 levels (23.6 5 Fibo retracement of 118.05-123.75 rise). Bullish Ichi alignment remains dominant, prices are above the 21-DMA & the Nov 16 swing low of 122.22.
USD/CAD: The pair has been deflating from Monday's tops in the 1.3430 area as the US Dollar was on the defensive vs. its Canadian neighbour on Tuesday, dragging USD/CAD to the mid-1.3300s. A breakdown of 1.3310 (23.6% Fibo of 1.3459-1.2827) would aim for 1.3192 (55-day sma) and then 1.3135 (100-day sma). On the other hand, the next hurdle lines up at 1.3437 (high ) ahead of 1.3458 (2015 high ). Markets focus on another revision of US GDP figures for Q3, and Consumer Confidence and the S&P/Case-Shiller index due later in the NY Session.
AUD/USD: Aussie slipped against the USD in a knee-jerk reaction to Stevens' dovish comments, but pared losses to to rise back to its hourly 50-MA at 0.7204 levels. The pair has gained around two cents in the past two weeks but met heavy resistance near 0.7250, is likely to consolidate between 0.7150 and 0.7250 until fresh news emerges. Slew of crucial US economic data due later in the NY session, including prelim GDP and consumer confidence will also be closely eyed. Immediate resistance for the pair is seen at 0.7233 (Nov 23 high), while supports is located at 0.7186 (5 DMA)
EUR/USD: Drop in German yields weighed on the EUR/USD, which failed to sustain above the hourly 100-MA at 1.0666 levels. The pair is currently trading at 1.0650, after retreating from high of 1.0670 on losses in the European stock markets. Major intraday resistance is around 1.06700 (34 day 4H EMA) and any break above confirms very minor bullishness , a jump till 1.0720 (trend line joining 1.0829 and 1.07628) is possible. Any break above trend line 1.0720 only confirms very short term bullishness. On the downside watch out 1.0580 for further weakness.
GBP/USD: The pound sterling came under fresh selling pressure against the Greenback in the mid-European session after BOE Carney's Testimony. Cable broke the 1.5130 barrier and fell to to fresh session lows just ahead of 1.51 handle. At the time of writing it was trading at 1.51233. Any break below 1.5050 will drag the pair till 1.5029/1.5000. The pair's minor support is around 1.5090. On the upside, minor resistance is around 1.5160 and break above targets 1.5190/1.5220 (support turned resistance level).
Equities Recap
European shares followed Asian stocks lower on Monday while a slightly weaker dollar eased the pressure on beleaguered metals that held near multi-year lows.
The pan-European FTSEurofirst 300 index dopped 1.2 pct. The early damage was down by a 10 pct fall in Zodiac Aerospace after the company reported a 44.6 pct fall in annual earnings, Britain's FTSE 100 was down 0.4 pct, Germany's DAX fell 0.3 pct, France's CAC 40 slipped 0.6 pct
Japan's Nikkei closed a session of lows with a 0.2 pct gain, after being closed on Monday for a holiday. In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan hovered in and out of positive zone, and was closed marginally lower.
China's Shanghai Composite index ended up 0.2 pct while the CSI300 closed almost flat and HK's Hang Seng Index edged down 0.4 pct at 22,587.63 points.
Commodities Recap
Oil prices edged higher on Tuesday as the oil abundant Middle East tensions increased following the downing of a Russian-made fighter jet near the Syrian-Turkish border and a weaker USD provided incentive for investors to buy more oil. Brent futures for January rose 67 cents to $45.50 a barrel, up 1.5 pct on Monday's close. West Texas Intermediate (WTI) crude edged up 68 cents at $42.43.
Gold and silver hovered near 6-year lows on Tuesday, while platinum dipped to a 7-year low on a strong greenback and growing expectations that the US Fed would increase interest rates in December. Spot gold went up 0.3 pct to $1,072.20 an ounce, but not too far from last week's low of $1,064.95, the weakest since February 2010.
Treasuries Recap
US 10- year treasuries yeild stood at 2.2254, falling 0.025 pct, 30-year treasuries yield fell to session lows, approaching 3 pct.
German 2-year bond yields dropped below -0.40 pct for the first time.
The BoJ, as predicted announced that it would buy JGBs via its operations but unexpectedly reduced the size of its purchase in the 1- to 3-year sector to Y300bn from a usual Y400bn. The initial reaction was mild; the 2-year on-the-run paper traded at -0.025%, softening by a half bp from last Friday's JBTC close. The 2-year yield rallied to 0% in the early afternoon, taking 5-year yields with it to 0.05%. 2- and 5-year yields then fell off to -0.015% and 0.04%, but 2s ultimately moved back up to -0.005%.
UK Gilts started 14 ticks higher than the settlement of 118.06, as expected as a variety of factors combined to support the open.
New Zealand government bonds earned, pushing yields 3 bps lower at the short end of the curve. Australian government bond futures bounced, with the 3-year bond contract up 3 ticks at 97.860. The 10-year contract also added 3 ticks to 97.0600, while the 20-year contract rose 2.5 ticks to 96.5350.
