|   Market Roundups


  |   Market Roundups


Europe Roundup: Sterling at 8-month peak on expectations of Conservative win in UK election, euro steadies as EZ investor morale improves, European shares tumble - Monday, December 9th, 2019

Market Roundup

  • Surging exports support German economy
  • Eurozone investor morale improves: Sentix
  • Gold inches up on U.S.-China trade uncertainty
  • China hopes to reach trade agreement with U.S

Economic Data Ahead

  • (0815 ET/1315 GMT) Canadian Mortgage and Housing Corp will report housing starts for the month of November. The indicator stood at a seasonally adjusted annualized rate of 202,000 in the previous month.
  • (0830 ET/1330 GMT) Statistics Canada is likely to report that building permits decreased 0.2 percent in October after declining 6.5 percent in September.

Key Events Ahead

  • No significant events scheduled

FX Beat

DXY: The dollar index eased as investors remained cautious ahead of an impending December 15 deadline for the United States to impose a new round of tariffs on China. Market attention will also remain on U.S. Federal Reserve policy meetings this week that could provide fresh clues on the monetary policy outlook. The greenback against a basket of currencies traded 0.1 percent down at 97.60, having touched a low of 97.36 on Friday, its lowest since November 4.

EUR/USD: The euro steadied after data showed German exports rose unexpectedly in October, raising hopes that the economy can avoid contracting in the final quarter, despite a string of negative economic indicators in recent weeks. Moreover, separate data showing investor morale in the eurozone jumped for the second month in a row boosted the bid tone around the major. The European currency traded 0.05 percent up at 1.1063, having touched a low of 1.1039 on Friday, its lowest since December 2. Immediate resistance is located at 1.1080, a break above targets 1.1097. On the downside, support is seen at 1.1042 (21-DMA), a break below could drag it below 1.1025.

USD/JPY: The dollar plunged to a 2-1/2 week low as risk sentiment weakened after White House economic adviser Larry Kudlow stated that a December 15 deadline is still in place to impose a new round of U.S. tariffs on Chinese consumer goods. The major was trading 0.1 percent down at 108.42, having hit a low of 108.42 earlier, its lowest since Nov 21. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. Immediate resistance is located at 108.83, a break above targets 109.02 (10-DMA). On the downside, support is seen at 108.42, a break below could take it near at 108.27.

GBP/USD: Sterling advanced to an 8-month peak on growing confidence that this week’s election will give the Conservative Party the parliamentary majority it needs to deliver Brexit, ending near-term uncertainty. Fresh polls showed British Prime Minister Boris Johnson’s Conservative Party have extended its lead in opinion polls before Thursday’s election. The major traded 0.3 percent up at 1.3167, having hit a high of 1.3181 earlier, it’s highest since May 6. Investors’ attention will remain on the development surrounding the general elections, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3196, a break above could take it near 1.3217. On the downside, support is seen at 1.3064 (5-DMA), a break below targets 1.3039. Against the euro, the pound was trading 0.1 percent up at 84.07 pence, having hit a high of 83.92 earlier, it’s highest since May 2017.

USD/CHF: The Swiss franc consolidated within narrow ranges, as investors awaited the Federal Reserve policy meeting on Wednesday, new European Central Bank chief Christine Lagarde's first policy meeting on Thursday, and a parliamentary election in Britain, with the results due on Friday. The major trades flat at 0.9898, having touched a low of 0.9855 on Wednesday, it’s lowest since November 4. On the higher side, near-term resistance is around 0.9926 (21-DMA) and any break above will take the pair to the next level till 0.9940. The near-term support is around 0.9886 (5-DMA), and any close below that level will drag it till 0.9836.

Equities Recap

European shares tumbled as data from China indicating a slowdown in the Chinese economy, stoked fresh concerns about slowing global growth.

The pan-European STOXX 600 index slumped 0.1 percent at 406.97 points, while the FTSEurofirst 300 fell 0.05 percent to 1,590.47 points.

Britain's FTSE 100 trades 0.1 percent down at 7,232.29 points, while mid-cap FTSE 250 eased 0.6 to 20,815.24 points.

Germany's DAX declined 0.2 percent at 13,145.51 points; France's CAC 40 trades 0.2 percent lower at 5,858.01 points.

Commodities Recap

Crude oil prices eased after data showed that Chinese exports declined for a fourth straight month, raising concerns about the damage being done to global demand by the U.S.-China trade war. International benchmark Brent crude was trading 0.8 percent down at $63.82 per barrel by 1019 GMT, having hit a high of $64.86 on Friday, its highest since September 23. U.S. West Texas Intermediate was trading 0.7 percent down at $58.66 a barrel, after rising as high as $59.81 on Friday, its highest since September 17.

Gold prices rebounded from a 1-week low as investors awaited cues from the U.S. Federal Reserve on its monetary policy outlook. Spot gold rose 0.2 percent to $1,462.36 per ounce by 1021 GMT, having touched a low of $1458.57 earlier, its lowest since Dec. 2. U.S. gold futures rose 0.1 percent to $1,466.50.

Treasuries Recap

The European bond yields held below 1-week highs as investors awaited European Central Bank meeting and a UK election due. The yields on 10-year German government debt were steady at -0.30 percent just below Friday’s high of -0.27 percent, the highest since Dec. 3.

The Japanese government bond yields rose, with the benchmark 10-year JGB futures falling 0.18 point to 152.27. The 10-year JGB yield rose 1 basis point to minus 0.010 percent, the highest since April. The 20-year JGB yield rose 0.5 basis point to 0.295 percent, while the 30-year JGB yield rose 0.5 basis point to 0.440 percent. The five-year yield rose 1.5 basis points to minus 0.105 percent. The two-year JGB yield rose 1 basis point to minus 0.125 percent.

The Australian government bond futures eased, with the 3-year bond contract dipping 1.5 ticks to 99.280, while the 10-year contract lost 3 ticks to 98.8450. The 10-year yields remain 72 basis points lower than those on Treasuries, compared to 41 basis points this time last year.

  • Market Data

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.