Market Roundup
- Oil gains as U.S. crude stocks fall
- Eurozone economy continues steady growth in Q3
- Gold gains on weak Chinese data
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. producer price index is likely to have increased 0.3 percent in October, while in the 12 months through the same period, it is expected to have advanced 0.9 percent. PPI excluding food and energy probably edged up 0.2 percent after easing 0.3 percent in September.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 4,000 to a seasonally adjusted 215,000 for the week ended Nov. 8, while continuing claims for the week ended Nov. 1 is expected to decline to 1.687 million from previous week's reading of 1.689 million.
- (0830 ET/1330 GMT) Statistics Canada releases its New Housing Price Index (NHPI) for the month of September. The index rose 0.1 percent in August.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending November 8.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending November 8.
Key Events Ahead
- (0910 ET/1410 GMT) Chicago Fed President Charles Evans will deliver opening keynote on Third Annual Fintech Conference Federal Reserve Bank of Philadelphia
- (1000 ET/1500 GMT) Federal Reserve Chair Jerome Powell testifies before Congress
FX Beat
DXY: The dollar index held firm near multi-week peaks, after Federal Reserve Chair Jerome Powell said that the U.S. central bankers see a sustained expansion ahead for the country’s economy, with the full impact of recent interest rate cuts still to be felt and low unemployment boosting household spending. The greenback against a basket of currencies traded 0.1 percent up at 98.39, having touched a high of 98.45 on Wednesday, its highest since October 15.
EUR/USD: The euro steadied near a 1-month low after preliminary data showed the German economy escaped a recession in the third quarter, as output unexpectedly grew 0.1 percent quarter-on-quarter, driven by consumer spending. The European currency traded 0.1 percent down at 1.0996, having touched a low of 1.0994 earlier, its lowest since October 15. Immediate resistance is located at 1.1042, a break above targets 1.1062. On the downside, support is seen at 1.0985, a break below could drag it below 1.0957.
USD/JPY: The dollar slumped to an over 1-week low as weak Chinese data and concerns about whether Beijing and Washington can reach a trade deal sent investors seeking shelter in perceived safe-haven assets. The major was trading 0.2 percent down at 108.64, having hit a low of 108.56 earlier, its lowest since November 5. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. producer price index, unemployment benefit claims and Fed officials' speeches. Immediate resistance is located at 109.07 (5-DMA), a break above targets 109.62 (May 31 High). On the downside, support is seen at 108.29, a break below could take it near at 108.02.
GBP/USD: Sterling steadied, as expectations that the Conservative Party may win a majority in the December 12 national election fuelled investors’ optimism. On Wednesday, a poll by Savanta ComRes showed British Prime Minister Boris Johnson’s Conservatives having a 10-point lead over the main opposition Labour Party. The major traded 0.1 percent up at 1.2862, having hit a high of 1.2897 on Monday, it’s highest since November 5. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2904, a break above could take it near 1.2972 (November 1 High). On the downside, support is seen at 1.2806, a break below targets 1.2768. Against the euro, the pound was trading 0.1 percent up at 85.51 pence, having hit a high of 85.50 earlier, it’s highest since May 8.
USD/CHF: The Swiss franc surged to a 10-day peak as investors risk sentiment weakened after data showed China’s industrial output grew significantly slower than expected in October, due to weakness in global and domestic demand and the drawn-out U.S.-China trade war. The major trades at 0.1 percent down at 0.9888, having touched a high of 0.9978 on Friday, it’s highest since October 16. On the higher side, near-term resistance is around 0.9936 and any break above will take the pair to the next level till 0.9983. The near-term support is around 0.9855, and any close below that level will drag it till 0.9815.
Equities Recap
European shares plunged as lackluster economic data from Asia and Europe countered a handful of positive corporate updates.
The pan-European STOXX 600 index tumbled 0.3 percent at 405.81 points, while the FTSEurofirst 300 slumped 0.2 percent to 1,589.03 points.
Britain's FTSE 100 trades 0.5 percent down at 7,317.56 points, while mid-cap FTSE 250 declined 0.05 to 20,278.84 points.
Germany's DAX eased 0.3 percent at 13,188.35 points; France's CAC 40 trades 0.05 percent lower at 5,904.77 points.
Commodities Recap
Crude oil rose surged after industry data showed a surprise drop in U.S. crude inventories, while comments from an OPEC official about lower-than-expected U.S. shale production growth in 2020 supported upside. International benchmark Brent crude was trading 0.6 percent up at $62.93 per barrel by 1049 GMT, having hit a low of $61.19 on Wednesday, its lowest since November 8. U.S. West Texas Intermediate was trading 0.5 percent higher at $57.59 a barrel, after falling as low as $56.17 on Wednesday, its lowest since November 7.
Gold prices rallied as equities turned lower after weaker-than-expected economic data out of China weighed on risk appetite. Spot gold was trading 0.3 percent down at $1,468.11 per ounce by 1051 GMT, while U.S. gold futures rose 0.3% at $1,467.10 per ounce.
Treasuries Recap
The U.S. Treasuries gained during the afternoon session ahead of the country’s producer price inflation (CPI) for the month of October, scheduled to be released today by 13:30GMT. In addition, Federal Reserve Chair Jerome Powell is due to deliver a testimony today at 15:00GMT, besides, speeches by FOMC members Clarida, Williams and Bullard, all due later in the day, which shall provide further direction into the debt market. The yield on the benchmark 10-year Treasury yield suffered 2 basis points to 1.850 percent, the super-long 30-year bond yield also lost 2 basis points to 2.329 percent and the yield on the short-term 2-year traded tad down at 1.626 percent.
The United Kingdom’s gilts jumped during European trading hours after the country’s retail sales for the month of October disappointed market expectations ahead of a silent end to the trading week tomorrow. The yield on the benchmark 10-year gilts, slumped 2 basis points to 0.740 percent, the 30-year yield slipped nearly 1-1/2 basis points to 1.260 percent and the yield on the short-term 2-year also traded 1-1/2 1 basis points down at 0.543 percent.
The German bunds jumped during European trading session after the country’s gross domestic product (CPI) for the third quarter of this year improved slightly, surpassing market expectations as well. Investors will now eye the eurozone’s consumer price inflation (CPI) for the month of October, scheduled to be released on November 15 by 07:00GMT for further direction into the debt market. The German 10-year bond yield, which move inversely to its price, slumped 2-1/2 basis points to -0.326 percent, the yield on 30-year note plunged nearly 3-1/2 basis points to 0.155 percent and the yield on short-term 2-year suffered 2-1/2 basis points to -0.651 percent.
The Australian 10-year government bond yield slumped to over 1-week low during Asian session after the country’s employment report for the month of October created a surprise disappointment among investors, as jobless rate rose and employment change slumped. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged over 9-1/2 basis points to 1.180 percent, the yield on the long-term 30-year bond slumped over 10 basis points to 1.782 percent and the yield on short-term 2-year plummeted nearly 7 basis points to 0.794 percent.
