Market Roundup
- USD/JPY -0.55%, EUR/USD 0.1%, GBP/USD -0.6%
- EUR/CHF hits 1.0806 high clears 1.0773 21DMA resistance
- Brent rallies hard on market optimism ahead of OPEC meeting
- DXY +0.15%, DAX +0.2%, Brent +6.75%, Iron -8.0%, Gold -0.03%
- Italy’s Renzi says banking problems will be addressed after referendum
- OPEC meeting-Qatar min-vital that oil stock levels start to fall
- OPEC-Iraq delegate say there will be an oil agreement
- Brent up 5.0%+ Saudis say close to a deal
- Norway to sell NOK 900 mln PD in December same as November
- China state-owned banks sell USD for third straight day, PBOC fix 6.8865
- UK Nov GfK consumer confidence index -8, -4 eyed, October -3
- ECB Coeure – Greece can maintain 3.5% primary surplus post-’18
- Australia home building boom fast turning to rubble – Reuters.
- New Zealand Nov ANZ business confidence i.e. 20.5%, own activity 37.6%, Oct 24.5%, 38.4%
- RBNZ ‘s Wheeler – NZ in for tough ride on growing global protectionism
Economic Data Ahead
- (0815 ET/1315 GMT) Payrolls processor ADP releases U.S. employment report for the month of November. The report is expected to show that 165,000 jobs were added as compared with 147,000 jobs in October.
- (0830 ET/1330 GMT) The U.S. Commerce Department releases personal income figures for October, which is expected to rise 0.4 percent after gaining 0.3 percent in the previous month.
- (0830 ET/1330 GMT) The U.S. Commerce Department releases the personal consumption expenditures (PCE) price index for the month of October. The index rose 0.2 percent in the prior month while core PCE is likely to have increased 0.1 percent after posting a similar gain in September.
- (0830 ET/1330 GMT) The U.S. Personal spending is likely to surge 0.6 percent in October, after rising 0.5 percent in October.
- (0830 ET/1330 GMT) The Statistics Canada releases its Raw Material Price Index for the month of October. The index posted a decline of 0.1 percent in September.
- (0830 ET/1330 GMT) The Statistics Canada will report its industrial producer prices for the month of October. The indicator rose 0.4 percent in the prior month.
- (0830 ET/1330 GMT) The Statistics Canada is expected to report that gross domestic product increased at a 3.4 percent annual rate in the third quarter after declining at a 1.6 percent pace in the second quarter. While on monthly basis, it is likely to rise 0.1 percent in September, after posting a growth of 0.2 percent in August.
- (0945 ET/1445 GMT) Chicago Purchasing Managers' Index is likely to show that business conditions rose to 51.8 in November from 50.6 last month.
- (1000 ET/1500 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 1.0 percent in October after rising 1.5 percent in September.
- (1400 ET/1900 GMT) The Fed issues its Beige Book, a summary of anecdotes on the health of the economy.
- (1730 ET/2230 GMT) Australian Industry Group (AiG) releases its performance of manufacturing index for the month of October. The index stood at 49.8 in September.
- (1850 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending November 25.
- (1850 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending November 25.
Key Events Ahead
- (0800 ET/1300 GMT) Dallas Fed President Robert Kaplan participates in a moderated Q&A at "A Discussion of Economic Conditions, Key Secular Trends and the Limits of Monetary Policy", hosted by the Economic Club of New York.
- (0815 ET/1315 GMT) European Central Bank President Mario Draghi's Speech.
- (1145 ET/1645 GMT) Federal Reserve Board Governor Jerome Powell speaks on "A View from the Fed" before an event hosted by the Brookings Institution in Washington, D.C.
- (1145 ET/1645 GMT) FedTrade operation 30-year Ginnie Mae max $1.500 bln
- (1235 ET/1735 GMT) Cleveland Fed President Loretta Mester speaks on the economic outlook and monetary policy at the annual business luncheon of the African-American Chamber of Commerce of Western Pennsylvania.
- (1430 ET/1930 GMT) FedTrade operation 15-year Fannie Mae/Freddie Mac max $925 mln
FX Beat
DXY: The dollar edged up versus its major peers as the U.S. Treasury yields resumed their rise after declining in the previous three sessions. The greenback against a basket of currencies trades up at 101.05, after declining for four straight days. FxWirePro's Hourly Dollar Strength Index stood at 2.98 (Neutral) by 1100 GMT.
EUR/USD: The euro nudged up, reversing early session losses after data showed Eurozone inflation rose in November as food and core inflation pushed higher. The economy's consumer prices surged 0.6 percent year-on-year in November, rising from 0.5 percent in October, which provided some relief for the European Central Bank policymakers. The ECB meets next Thursday and is expected to extend its bond-buying beyond an initial target date in March. The European currency was flat at 1.0646, having touched an intra-day high of 1.0663. FxWirePro's Hourly Euro Strength Index stood at 22.34 (Neutral) by 1000 GMT. On the higher side, major resistance is around 1.0685 and any violation above will take the pair to next level till 1.07550 (78.6% retracement of 1.08167 and 1.05320)/1.08167 (Nov 15th high). The immediate support stands at 1.05600 and any indicative break below will drag it down till 1.05180 /1.0436 (161.8% retracement of 1.05320 and 1.06855).
USD/JPY: The dollar rose, extending its recovery mode above the 113.00 handle, as the U.S. Treasury yields resumed their rise after three days of decline. The major was also supported by higher oil prices as optimistic remarks from the OPEC delegates on the proposed output cut deal triggered a bout of risk-on sentiment. The pair traded 0.6 percent higher at 113.06 and has gained almost 8 percent since the start of November, recording its strongest month since December 2009. FxWirePro's Hourly Yen Strength Index stood at -106.92 (Highly Bearish) by 1000 GMT. The major resistance is around 114.08 (161.8% retracement of 113.53 and 112.73) and a break above targets 115/115.53. On the lower side, minor support is around 111.50 (55- 4 H MA) and any break below targets 110.25 (Nov 22nd low)/109.05 (38.2% retracement of 113.89 and 101.19).
GBP/USD: Sterling slumped, reversing most of its previous session gains, as weakness in the EUR/GBP cross and board based greenback strength, softened the bid tone around the British currency. Moreover, the major is likely to remain on the downside, as dollar bulls await ADP jobs report, which is expected to show that 165,000 jobs were added in November. Sterling trades 0.4 percent lower at 1.2440, hovering towards a low of 1.2419 hit in earlier in the session. FxWirePro's Hourly Sterling Strength Index stood at -141.82 (Highly Bearish) by 1100 GMT. The immediate resistance is around 1.2530 and any violation above this level will take the pair to next level till 1.2600/1.2675 in the short term. The short term bottom is around 1.2300 and any break below will drag it till 1.2202 (61.8% retracement of 1.19048 and 1.26738). Against the euro, the pound trades 0.5 percent lower at 85.65 pence, having hit a 1-week low of 85.69 earlier in the day.
USD/CHF: The Swiss franc declined as the greenback strengthened across the board on rising U.S treasury yields. The dollar trades 0.22 percent higher at 1.0136, hovering towards a high of 1.0191 hit last week, its strongest since early Feb. FxWirePro's Hourly Swiss Franc Strength Index stood at -48.05 (Neutral) by 1100 GMT. On the lower side, any break below 1.0110 will drag the pair down till 1.0074/1.00385 (23.6% retracement of 0.95432 and 1.01915)/0.9990. The minor immediate resistance is around 1.0160 and any violation above will take it to 1.0195/1.02260 (88.6% retracement of 1.03284 and 0.94439). The short-term bullishness is only above 1.01915.
AUD/USD: The Australian dollar declined, weighed down by a sharp correction in iron ore prices and an unexpected weak building approvals report. The major initially rose to a near 2-week high, however, it failed to benefit from the prevalent risk-on sentiment led by increasing optimism that OPEC members will be able to arrive at an agreement to restrain output. The Aussie trades 0.31 percent lower at 0.7460, pulling away from an intra-day high of 0.7497, its strongest since Nov. 17. FxWirePro's Hourly Aussie Strength Index stood at 19.34 (Neutral) by 1100 GMT. On the higher side, minor resistance is around 0.7500 and any break above will take the pair till 0.7520/0.7580. The major support is around 0.7435 (trend line joining 0.7300 and 0.7362) and a break below will drag it till 0.7380/0.73500.
NZD/USD: The New Zealand dollar hit a 3-week high above the 0.7100 handle after the Reserve Bank of New Zealand warned on possible restrictions on mortgage lending to curb a soaring property market, underpinning market expectations it was done cutting interest rates. The Kiwi trades 0.3 percent up at 0.7147, having hit a high of 0.7169 hit earlier in the session, its highest since Nov. 11. FxWirePro's Hourly Kiwi Strength Index was at 59.36 (Bullish) by 1100 GMT. Immediate resistance is located at 0.7190 (Nov 1 High), a break above could take it over 0.7200. On the downside, support is seen at 0.7089 (7-EMA), a break below could drag it near 0.7050.
Equities Recap
European shares gained, strengthened by renewed risk-on sentiment as oil prices advanced more than 5 percent on indications that OPEC group was closing in on a deal to cut production.
The pan-European STOXX 600 index increased 0.15 percent at 341.48 points, while the FTSEurofirst 300 index added 0.34 percent at 1,348.31 points.
Britain's FTSE 100 trades 0.33 percent up at 6,794.26 points, while mid-cap FTSE 250 edged up 0.08 percent at 17,546.44 points.
Germany's DAX gained 0.4 percent at 10,665.79 points; France's CAC 40 trades 0.5 percent higher at 4,575.10 points.
Tokyo's Nikkei edged up 0.01 percent to 18,308.48 points, Australia's S&P/ASX 200 index declined 0.36 percent to 5,437.70 points and South Korea's KOSPI rose 0.26 percent at 1,983.48 points.
Shanghai composite index fell 1.0 percent at 3,250.03 points, while CSI300 index dropped 0.7 percent at 3,538.00 points. Hong Kong’s Hang Seng added 0.2 percent at 22,789.77 points.
Commodities Recap
Crude oil prices rose as much as 5 percent after an Iraq delegate stated that there will be an agreement on production cut between the OPEC members at the meeting in Vienna. International benchmark Brent crude was 5.5 percent higher at $49.89 per barrel by 0939 GMT, having hit a 1-month high of $50.12 earlier in the session. U.S. West Texas Intermediate crude rose 5.22 percent at $47.56 a barrel, after rising to an early high of $47.80, its highest since Nov. 25.
Gold prices consolidated between narrow ranges and were on track for its biggest monthly decline since June 2013, weighed down by prospects of imminent U.S. interest rate hike by the Federal Reserve and expectations of improving economic growth. Spot gold was trading lower at $1,185.95 an ounce by 0945 GMT and was down 6.83 percent so far this month. U.S. gold futures were flat at $1,187.90 per ounce.
Treasuries Recap
The U.S. Treasuries saw downward pressure following stronger than expected preliminary third-quarter gross domestic product (GDP) data released Wednesday. The yield on the benchmark 10-year Treasury note rose 2-1/2 basis points to 2.32 percent, the yield on long-term 30-year Treasury inched 2 basis points to 2.97 percent and the yield on short-term 2-year note also bounced 2 basis point to 1.11 percent.
The Eurozone periphery bonds rallied following gains in benchmark German bunds as investors remained cautious ahead of OPEC meeting decision. The French 10-year bond yields fell 4-1/2 basis points to 0.67 percent, Irish 10-year bonds yield dipped 5 basis points to 0.81 percent, Italian equivalent slid 4 basis points to 1.93 percent, Netherlands 10-year bonds yield ticked 3 basis points lower to 0.360 percent and the Spanish 10-year bonds yield tumbled 3 basis points to 1.50 percent.
The UK gilts remained highly volatile on nervous trading ahead of an OPEC meeting final decision. The yield on the benchmark 10-year gilts rose 1 basis point to 1.37 percent, the super-long 30-year bond yield fell 1-1/2 basis points to 1.99 percent and the yield on short-term 2-year bounced 1 basis point to 0.10 percent.
The German bunds traded modestly firmer as investors remained cautious ahead of the OPEC ministerial decision, in which oil-producing countries are expected to strike an agreement on output cut. The yield on the benchmark 10-year bond fell 1 basis points to 0.20 percent, the yield on long-term 30-year note dipped 1 basis point to 0.87 percent and the yield on short-term 3-year bond slid 1/2 basis point to -0.70 percent.
The Japanese government bonds traded narrowly as investors await the OPEC ministerial decisions, in which oil-producing countries are expected to strike an agreement on output cut. The benchmark 10-year bond yield rose ½ basis point to 0.02 percent, the yield on long-term 30-year note climbed 1 basis point to 0.57 percent and the yield on short-term 2-year note slid 1 basis point to -0.15 percent.
The New Zealand government bonds closed lower after the Reserve Bank of New Zealand in its November Financial Stability Report (FSR) signaled steady interest rate for the foreseeable future to curb a soaring property market. The yield on the benchmark 10-year bond closed 2 basis points higher at 3.14 percent, the yield on 7-year note jumped 2 basis points to 2.77 percent and the yield on short-term 2-year note climbed 1-1/2 basis points to 2.16 percent.
The Australian government bonds slumped following firmness in the energy prices ahead of OPEC ministerial gathering, in which oil-producing countries are expected to strike an agreement on output cut. The yield on the benchmark 10-year Treasury note rose 3-1/2 basis points to 2.74 percent, the yield on the 15-year note climbed 3 basis points to 3.15 percent and the yield on short-term 2-year inched 1/2 basis point to 1.85 percent.
