Market Roundup
- Oil rebounds amid hopes for U.S.-China trade deal
- Gold eases on positive trade deal news
- German industrial output decline adds to recession fears
- ECB sees modest but positive eurozone growth in second half
Economic Data Ahead
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 3,000 to a seasonally adjusted 215,000 for the week ended Nov. 1, while continuing claims for the week ended Oct. 25 is expected to decline to 1.683 million from previous week's reading of 1.69 million.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending November 1.
- (1500 ET/2000 GMT) The U.S. Federal Reserve is likely to report that consumer credit declined to $15.0 billion in October from $17.9 billion the month before.
Key Events Ahead
- (1300 ET/1800 GMT) Dallas Federal Reserve President Robert Kaplan gives a speech.
FX Beat
DXY: The dollar index edged lower, pulling away from a 3-week peak hit earlier in the session, as investors awaited U.S. unemployment benefit claims and consumer credit data for further clues on the strength of the economy. The greenback against a basket of currencies traded 0.1 percent down at 97.85, having touched a high of 98.02 earlier, its highest since October 17.
EUR/USD: The euro rebounded from a 3-week low after the European Central Bank in an Economic Bulletin stated that the eurozone economy will continue to grow in the second half of the year, even if only modestly, boosted by private consumption and a small growth in employment. The European currency traded 0.2 percent up at 1.1082, having touched a low of 1.1054 earlier, its lowest since October 16. Immediate resistance is located at 1.1092 (21-DMA), a break above targets 1.1116 (5-DMA). On the downside, support is seen at 1.1042, a break below could drag it below 1.1012.
USD/JPY: The dollar rose, reversing most of its previous session losses after the Chinese commerce ministry stated China and the United States have both agreed to cancel in phases the tariffs imposed during their prolonged trade war. The major was trading 0.2 percent up at 109.16, having hit a high of 109.25 on Tuesday, its highest since October 30. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. unemployment benefit claims, consumer credit and Fed Kaplan's speech. Immediate resistance is located at 109.28 (October 30 High), a break above targets 109.62 (May 31 High). On the downside, support is seen at 108.44, a break below could take it near at 108.24.
GBP/USD: Sterling consolidated above a 1-week low as investors cautiously awaited Bank of England policy meeting decision later in the day. The BoE is expected to keep its key policy rate unchanged at 0.75 percent and not give an explicit steer on where interest rates are headed. The major traded 0.1 percent up at 1.2869, having hit a low of 1.2837 earlier, it’s lowest since October 29. Investors’ attention will remain on the development surrounding Brexit, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2949 (October 24 High), a break above could take it near 1.3000. On the downside, support is seen at 1.2806, a break below targets 1.2748. Against the euro, the pound was trading 0.1 percent down at 86.17 pence, having hit a high of 85.85 on Tuesday, it’s highest since October 22.
USD/CHF: The Swiss franc nudged higher, hovering away from a 1-week low hit in the previous session, as Brexit concerns continued to dent investor sentiment. The major trades at 0.1 percent up at 0.9914, having touched a low of 0.9850 on Friday, it’s lowest since October 21. On the higher side, near-term resistance is around 0.9954 and any break above will take the pair to the next level till 0.9970. The near-term support is around 0.9909 (10-DMA), and any close below that level will drag it till 0.9889 (50-DMA).
Equities Recap
European shares advanced for the fifth straight session and recorded their highest in four years as investors cheered signs of progress in U.S.-China trade talks.
The pan-European STOXX 600 index gained 0.3 percent at 406.38 points, while the FTSEurofirst 300 rallied 0.2 percent to 1,592.15 points.
Britain's FTSE 100 trades 0.2 percent up at 7,411.71 points, while mid-cap FTSE 250 surged 0.7 to 20,357.37 points.
Germany's DAX rose 0.8 percent at 13,290.25 points; France's CAC 40 trades 0.3 percent higher at 5,884.06 points.
Commodities Recap
Crude oil prices surged amid new hints from China on progress towards a trade deal with the United States, offsetting downward pressure from a huge increase in U.S. crude stockpiles. International benchmark Brent crude was trading 1.1 percent up at $62.39 per barrel by 1038 GMT, having hit a high of $63.28 on Wednesday, its highest since September 24. U.S. West Texas Intermediate was trading 1.1 percent up at $57.81 a barrel, after rising as high as $57.81 on Wednesday, its highest since September 24.
Gold prices declined after China said that it had agreed with the United States in the past two weeks to a phased cancellation of the additional tariffs imposed during their months-long trade war. Spot gold declined 0.4 percent to $1,484.45 per ounce by 1040 GMT, having touched a low of $1,479.27 on Tuesday, its lowest since Oct. 16. U.S. gold futures were down 0.3 percent at $1,488.3 per ounce.
Treasuries Recap
The U.S. Treasuries plunged during the afternoon session ahead of the country’s weekly initial jobless claims and super-long 30-year auction, both scheduled for today at 13:30GMT and 18:00GMT. Also, Federal Open Market Committee (FOMC) member Kaplan is due to deliver his speech today at 18:05GMT, for further direction into the debt market. The yield on the benchmark 10-year Treasury yield jumped 5 basis points to 1.862 percent, the super-long 30-year bond yield surged 5-1/2 basis points to 2.353 percent and the yield on the short-term 2-year traded nearly 3-1/2 basis points higher at 1.639 percent.
The United Kingdom’s gilts slumped during European trading hours ahead of the Bank of England’s (BoE) monetary policy meeting, scheduled to be held today by 12:00GMT, followed by Governor Mark Carney’s speech later, later today at 12:30GMT. The yield on the benchmark 10-year gilts, jumped 2 basis points to 0.738 percent, the 30-year yield surged 3 basis points to 1.264 percent and the yield on the short-term 2-year edged tad 1 basis point up to 0.551 percent.
The German bunds remained narrowly mixed during European session after the country’s industrial production (IP) for the month of September disappointed market sentiments, while investors still keep a curious eye on the trade balance for the similar period, scheduled to be released on November 8 by 07:00GMT, for further direction in the debt market. The German 10-year bond yield, which move inversely to its price, gained 1 basis point to -0.315 percent, the yield on 30-year note hovered around 0.189 percent and the yield on short-term 2-year traded flat at -0.631 percent.
The Australian government bond yields slumped during Asian session tracking a similar movement in the United States’ counterpart after temporary optimism over the U.S.-China trade deal faded. The latest meeting between President Donald Trump and Chinese leader Xi Jinping to sign a limited trade agreement led to possibilities of a delay until December, owing to uncertainty over the terms and venue. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, plunged 6 basis points to 1.211 percent, the yield on the long-term 30-year bond also slumped 6 basis points to 1.793 percent and the yield on short-term 2-year suffered 4 basis points at 0.869 percent.
