Market Roundup
- Gold edges down as market turns optimistic on trade deal
- Eurozone banks rushing to cash in on ECB's tiered rate: Coeure
- UK jobs fall by most in over four years
Economic Data Ahead
- No major economic data scheduled
Key Events Ahead
- N/A U.S. President Donald Trump speaks to the Economic Club of New York
- (1200 ET/1700 GMT) Federal Reserve Bank of Richmond President Thomas I. Barkin gives a speech
- (1300 ET/1800 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker's speech
- (1800 ET/2300 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari
FX Beat
DXY: The dollar index surged as investors await U.S. President Donald Trump’s speech to the Economic Club of New York for hints about the Trump administration’s long-running trade war with China, and any progress towards the “phase one” trade deal. The greenback against a basket of currencies traded 0.1 percent up at 98.35, having touched a high of 98.40 on Friday, its highest since October 16.
EUR/USD: The euro declined after European Central Bank board member Benoit Coeure stated that bank in the eurozone are taking advantage of the ECB's multi-tier deposit and excess liquidity is already being traded across borders. The European currency traded 0.1 percent down at 1.1020, having touched a low of 1.1016 on Monday, its lowest since October 15. Immediate resistance is located at 1.1048 (5-DMA), a break above targets 1.1062. On the downside, support is seen at 1.1012, a break below could drag it below 1.0985.
USD/JPY: The dollar rose, halting a 2-day losing streak as traders grew optimistic ahead of a speech by U.S. President Donald Trump, during which he is expected to again postpone imposing tariffs on Chinese products. The major was trading 0.1 percent up at 109.20, having hit a high of 109.48 on Thursday, its highest since May 31. Investors’ will continue to track the broad-based market sentiment, ahead of the Fed officials' speeches. Immediate resistance is located at 109.62 (May 31 High), a break above targets 109.92 (May 30 High). On the downside, support is seen at 108.81 (10-DMA), a break below could take it near at 108.49.
GBP/USD: Sterling eased from a near 1-week peak after data showed Britain’s employers cut the most jobs in over four years between July and September, highlighting how the labor market is slowing, just as an election nears. UK's number of people in employment fell by 58,000 to 32.753 million, while the unemployment rate fell back to 3.8 percent, its lowest level since early 1975 during the third quarter. The major traded 0.2 percent down at 1.2825, 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 1.2917, a break above could take it near 1.2972 (November 1 High). On the downside, support is seen at 1.2794, a break below targets 1.2768. Against the euro, the pound was trading 0.1 percent down at 85.89 pence, having hit a high of 85.57 on Monday, it’s highest since May 8.
USD/CHF: The Swiss franc eased, reversing most of its previous session gains on hopes that U.S. President Donald Trump may signal progress on trade talks with China in a speech later in the day. The major trades at 0.3 percent up at 0.9961, having touched a high of 0.9978 on Friday, it’s highest since October 16. On the higher side, near-term resistance is around 0.9983 and any break above will take the pair to the next level till 1.0007. The near-term support is around 0.9915, and any close below that level will drag it till 0.9900.
Equities Recap
European shares gained as investors awaited a speech by U.S. President Donald Trump that could offer clues about a trade deal with China.
The pan-European STOXX 600 index rallied 0.2 percent at 406.24 points, while the FTSEurofirst 300 surged 0.3 percent to 1,592.62 points.
Britain's FTSE 100 trades 0.4 percent up at 7,355.18 points, while mid-cap FTSE 250 declined 0.05 to 20,396.04 points.
Germany's DAX rose 0.5 percent at 13,257.97 points; France's CAC 40 trades 0.3 percent higher at 5,911.44 points.
Commodities Recap
Crude oil prices surged, reversing previous session losses on hopes that U.S. President Donald Trump may signal progress on trade talks with China in a speech later in the day. International benchmark Brent crude was trading 0.6 percent up at $62.63 per barrel by 1048 GMT, having hit a low of $60.65 on Friday, its lowest since November 1. U.S. West Texas Intermediate was trading 0.5 percent up at $57.17 a barrel, after falling as low as $55.74 on Friday, its lowest since November 1.
Gold prices declined, hovering towards a near 3-month low hit in the previous session ahead of U.S. President Donald Trump’s speech at the Economic Club of New York with investors hoping for positive commentary around China trade talks. Spot gold eased 0.1 percent to $1,454.51 per ounce at 1052 GMT, having touched a low of $1,448.13 on Monday, its lowest August 5. U.S. gold futures were down 0.4 percent at $1,451.40 per ounce.
Treasuries Recap
The U.S. Treasuries remained flat during the afternoon session amid a muted trading day that witnessed data of little economic significance. However, speeches by Federal Open Market Committee (FOMC) members Harker and Kashkari, due to be delivered today at 18:00GMT and 23:00GMT respectively, shall provide further direction into the debt market. The yield on the benchmark 10-year Treasury yield flat at 1.933 percent, the super-long 30-year bond yield hovered around 2.407 percent and the yield on the short-term 2-year traded tad higher.
The United Kingdom’s gilts remained nearly flat during European trading hours after the country’s labour market report for the month of September remained mixed. However, Britain’s consumer price inflation (CPI) for the month of October, scheduled to be released on November 13 by 09:30GMT, shall add further direction in the labour market. The yield on the benchmark 10-year gilts, hovered around 0.808 percent, the 30-year yield rose 1 basis point to 1.331 percent while the yield on the short-term 2-year traded tad 1 basis point down at 0.561 percent.
The German bunds remained narrowly mixed during European trading session after an improvement in the country’s ZEW economic sentiment data for the month of November failed to create any significant impact on debt markets. The country’s gross domestic product (GDP) for the third quarter of this year, due to be released on November 14 by 07:00GMT, will provide further insight into the debt market. The German 10-year bond yield, which move inversely to its price, traded flat at -0.242 percent, the yield on 30-year note gained 1-1/2 basis points to 0.272 percent and the yield on short-term 2-year slipped 1-1/2 basis points to -0.633 percent.
The Australian government bonds jumped during Asian session of the second trading day of the week amid a muted day that witnessed data of little economic significance ahead of the country’s employment report for the month of October, scheduled to be released on November 14 by 00:30GMT. Also, the ongoing U.S.-China trade talks remain a concern, sometimes echoing optimism, while igniting uncertainties rest of the time. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped 2 basis points to 1.276 percent, the yield on the long-term 30-year bond plunged 2-1/2 basis points to 1.877 percent and the yield on short-term 2-year suffered 2 basis points at 0.859 percent.
