Market Roundup
- Eurozone Q3 2018 employment overall final increase to 158311 person vs previous 158285.6 person
- United Kingdom Nov 2018 BBA mortgage rate stays flat at 4.45 % vs previous 4.45 % (revised from 4.45 %)
- Eurozone Q3 2018 GDP revised yy decrease to 1.6 % (forecast 1.7 %) vs previous 1.7 %
- Eurozone Q3 2018 GDP revised qq stays flat at 0.2 % (forecast 0.2 %) vs previous 0.2 %
- Eurozone Q3 2018 employment final yy stays flat at 1.3 % (forecast 1.3 %) vs previous 1.3 %
- Eurozone Q3 2018 employment final qq stays flat at 0.2 % (forecast 0.2 %) vs previous 0.2 %
- Italy Oct 2018 retail sales sa mm increase to 0.1 % vs previous -0.8 %
- Italy Oct 2018 retail sales nsa yy increase to 1.5 % vs previous -2.5 %
- Switzerland Nov 2018 Forex Reserves CHF increase to 748762.6 CHF
- United Kingdom Nov 2018 Halifaxhouseprice 3m/yy decrease to 0.3 % (forecast 1 %) vs previous 1.5 %
- United Kingdom Nov 2018 Halifax house prices mm decrease to -1.4 % (forecast 0.5 %) vs previous 0.7 %
- France Oct 2018 trade balance, eur, sa increase to -4.1 eur (forecast -6 eur) vs previous -5.66 eur
- France Oct 2018 exports, eur approx time increase to 43.2 eur vs previous
- France Oct 2018 imports, eur approx time increase to 47.3 eur vs previous 46.08 eur
- France Oct 2018 industrial output mm increase to 1.2 % (forecast 0.7 %) vs previous -1.8 %
- Germany Oct 2018 industrial output mm decrease to -0.5 % (forecast 0.3 %) vs previous 0.2 %
Economic Data Ahead
- (0830 ET/1330 GMT) The U.S. Labor Department releases the nonfarm payrolls report for the month of November. The report is likely to show 200,000 jobs were added compared with an increase of 250,000 in October.
- (0830 ET/1330 GMT) The U.S. Bureau of Labor Statistics will release labor force participation rate for the month of November. The rate stood at 62.9 percent in the previous month.
- (0830 ET/1330 GMT) The U.S. Labor Department is expected to report that the unemployment rate remained unchanged at 3.7 percent in November.
- (0830 ET/1330 GMT) The United States' average hourly earnings are likely to rise 0.3 percent in November after climbing 0.2 percent in the month before.
- (0830 ET/1330 GMT) The Statistics Canada releases the employment report for November. The economy probably added 10,000 jobs, compared to a rise of 11,200 jobs in the previous month, while the participation rate came in at 65.2 percent in October.
- (0830 ET/1230 GMT) Canada's unemployment rate is expected to stay unchanged at 5.8 percent for the month of November.
- (0900 ET/1400) Mexican inflation is likely to rise 0.77 percent in November, compared with 0.52 percent in October.
- (1000 ET/1500 GMT) The University of Michigan is likely to report that U.S. preliminary consumer sentiment index declined to 97.0 in December after posting a final reading of 97.5 in November.
- (1000 ET/1500 GMT) The U.S. Census Bureau is likely to report that wholesale inventories rose 0.3 percent in October after posting a gain of 0.7 percent in the prior month.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending November 28.
- (1300 ET/1800 GMT) Baker Hughes reports U.S. Oil Rig Count.
- (1500 ET/2000 GMT) The U.S. Federal Reserve is likely to report that consumer credit rose to $17.0 billion in October from $10.92 billion the month before.
Key Events Ahead
- (1215 ET/1715 GMT) Federal Reserve Board Governor Lael Brainard speaks on "Financial Stability" before a luncheon hosted by the Peterson Institute for International Economics, Washington.
FX Beat
DXY: The dollar index gained as the Federal Reserve is likely to raise interest rates at its Dec. 18-19 meeting, making it the fourth hike this year, while investors wait to see how much further the tightening cycle has to run. The greenback against a basket of currencies trades 0.1 percent up at 96.88, having touched a low of 96.38 on Tuesday, its lowest since Nov 22. FxWirePro's Hourly Dollar Strength Index stood at -7.37 (Neutral) by 1000 GMT.
EUR/USD: The euro edged down after data showed German industrial output fell unexpectedly in October, adding to signs that a cooling trend will continue in the fourth quarter. The European currency traded 0.05 percent down at 1.1370, having touched a high of 1.1418 on Tuesday, its highest since Nov. 23. FxWirePro's Hourly Euro Strength Index stood at -17.13 (Neutral) by 1000 GMT. Immediate resistance is located at 1.1401 (November 29 High), a break above targets 1.1433 (November 22 High). On the downside, support is seen at 1.1305 (November 30 Low), a break below could drag it till 1.1263 (November 26 Low).
USD/JPY: The dollar index surged as investors awaited the U.S. nonfarm payrolls data for clues about the health of the economy which could influence the Fed's monetary policy. The major was trading 0.1 percent up at 112.81, having hit a low of 112.23 on Thursday, its lowest since October 29. FxWirePro's Hourly Yen Strength Index stood at 84.12 (Slightly Bullish) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. nonfarm payrolls, unemployment rate, wholesale inventories, trade balance, consumer credit change, and speeches from Fed policymakers. Immediate resistance is located at 113.23 (November 22 High), a break above targets 113.50 (November 6 High). On the downside, support is seen at 112.42 (November 19 Low), a break below could take it lower 111.82 (October 25 Low).
GBP/USD: Sterling declined as investors remained on the sidelines ahead of the Parliamentary vote on the UK Prime Minister Theresa May’s negotiated Brexit deal with the European Union on Dec. 11th. Moreover, data showing British house prices rose at their slowest pace in six years in the three months to November further dented the bid tone around the British pound. The major traded 0.2 percent down at 1.2760, having hit a low of 1.2658 on Tuesday; it’s lowest since June 2017. FxWirePro's Hourly Sterling Strength Index stood at 47.50 (Neutral) 1000 GMT. Immediate resistance is located at 1.2809 (November 30 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2725 (November 27 Low), a break below targets 1.2699 (December 6 Low). Against the euro, the pound was trading 0.2 percent down at 89.12 pence, having hit a low of 89.44 on Tuesday, it’s lowest since Nov. 19.
USD/CHF: The Swiss franc edged down after rising to a 1-1/2 month peak in the previous session as the greenback surged on expectations the Federal Reserve will raise interest rates again at its Dec. 18-19 meeting. The major trades 0.1 percent up at 0.9936, having touched a high of 1.0008 on Wednesday; it’s highest since Nov. 16. FxWirePro's Hourly Swiss Franc Strength Index stood at -7.37 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9980 (Nov. 23 High) and any break above will take the pair to next level till 1.0026 (Oct. 26 High). The near-term support is around 0.9908 (November 20 Low), and any close below that level will drag it till 0.9881 (October 12 Low).
Equities Recap
European shares recouped previous session losses, however, concerns that the U.S. dispute with China could worsen limited upside.
The pan-European STOXX 600 index gained 1.5 percent at 348.31 points, while the FTSEurofirst 300 index rose 1.3 percent to 1,371.00 points.
Britain's FTSE 100 trades 1.4 percent up at 6,800.12 points, while mid-cap FTSE 250 rallied 1.05 to 17,934.78 points.
Germany's DAX surged 1.0 percent at 10,918.75 points; France's CAC 40 trades 1.5 percent higher at 4,851.58 points.
Commodities Recap
Crude oil prices declined after Saudi Energy Minister stated that he was not confident there will be a deal today and as Iran, Venezuela, Libya are likely to get exemptions from OPEC output cut. International benchmark Brent crude was trading 0.6 percent down at $59.87 per barrel by 1006 GMT, having hit a high of $63.56 on Tuesday, its highest since November 22. U.S. West Texas Intermediate was trading 1.1 percent down at $51.13 a barrel, after rising as high as $54.54 on Tuesday, its highest since the November 22.
Gold prices rose, hovering towards a 5-week peak touched in the previous session and were on track for their best week in 15, as the dollar declined on renewed speculation of an imminent pause in the U.S. Federal Reserve's tightening cycle. Spot gold rose 0.3 percent to $1,240.21 per ounce at 1007 GMT, having touched a high of $1,244.22 on Thursday, its highest level since July 17 and was set to post its best gain since the week of Aug. 24. U.S. gold futures were also marginally higher at $1,243.8 per ounce.
Treasuries Recap
The U.S. Treasuries traded narrowly during late afternoon session ahead of the country’s non-farm payrolls for the month of November, scheduled to be released today by 13:30GMT and the unemployment rate for the similar period, also due today by 13:30GMT. The yield on the benchmark 10-year Treasuries hovered around 2.879 percent, the super-long 30-year bond yields rose nearly 1 basis point to 3.143 percent and the yield on the short-term 2-year remained tad lower at 2.752 percent.
The United Kingdom’s gilts suffered during the afternoon session amid an otherwise silent trading day that witnessed data of little economic significance, except for Brexit uncertainties. The yield on the benchmark 10-year gilts, jumped 2 basis points to 1.263 percent, the super-long 30-year bond yields remained tad higher at 1.847 percent and the yield on the short-term 2-year traded 2 basis points higher at 0.755 percent.
The German bunds slumped during European session despite a fall in the country’s industrial production for the month of October and Eurozone’s lower-than-expected gross domestic product (GDP) for the third quarter of this year, released today. The German 10-year bond yields, which move inversely to its price, jumped 2 basis points to 0.247 percent, the yield on 30-year note also climbed 2 basis points to 0.892 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at -0.611 percent.
The Japanese 10-year government bond yield jumped on the last trading day of the week following an improvement in the country’s household spending for the month of October, albeit surprising market participants who expected a rise compared to same period last year. The yield on the benchmark 10-year JGB note, which moves inversely to its price, jumped 6 basis points to 0.060 percent, the yield on the long-term 30-year note rose nearly 1-1/2 basis points to 0.800 percent and the yield on short-term 2-year surged 9 basis points to -0.140 percent.
The Australian government bonds traded narrowly mixed across the curve during Asian session as investors remain side-lined in any big deal amid lack of any major domestic events. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 1/2 basis point to 2.464 percent, the yield on the long-term 30-year bond also climbed 1/2 basis point to 2.994 percent and the yield on short-term 2-year down 1/2 basis point to 1.930 percent.
