Market Roundup
- EUR/USD -0.02%, USD/JPY -0.1%, GBP/USD -0.26%, EUR/GBP 0.24%
- DXY -0.02%, DAX 0.36%, FTSE 0.37%, Brent -0.14%, Gold 0.11%
- ECB to curb bond-buying in the first step towards end of easy money
- U.S. House to vote on budget plan amid Republican fight on taxes
- UK parliament expected to vote on Brexit deal by late 2018 or early 2019 -Davis
- Germany Nov GfK Consumer Sentiment 10.7 vs 10.8, forecast 10.8
- EZ Nov Money-M3 Annual Growth 5.1% vs 5.0%, forecast 5.0
- EZ Sept Loans to Households 2.7% vs 2.7%, forecast 2.8%
- EZ Sept Loans to Non-Fin 2.5% vs 2.5%, forecast 2.5%
- Great Britain Oct CBI Distributive Trades -36 vs 42, forecast 15
- China says will not set target to double GDP from 2021, in change from the past
- Global investors race for rare China sovereign bond, orders top $20 bln
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 13,000 to a seasonally adjusted 235,000 for the week ended Oct. 20 while continuing claims for the week ended Oct. 13 is expected to rise to 1.890 million from previous 1.888 million.
- (0830 ET/1230 GMT) The U.S. Census Bureau is likely to report that preliminary wholesale inventories rose 0.4 percent in September after posting a gain of 0.9 percent in August.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of September. The economy recorded a trade deficit of $62.94 billion in the previous month.
- (0830 ET/1230 GMT) Brazil's current account deficit is likely to narrow to $250 billion in September from 0.475 billion in the previous month.
- (0900 ET/1300 GMT) Mexico releases trade balance data for the month of September. The economy posted a $1.283 billion trade deficit in August.
- (1000 ET/1400 GMT) The National Association of Realtors is likely to report that U.S. pending home sales increased 0.2 percent in September after declining 2.6 percent in August.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending October 20.
- (1100 ET/1500 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of October. The indicator stood at 22 in the previous month.
- (1830 ET/2330 GMT) Japan's Statistics Bureau will release its National Consumer Price Index for the month of September. The index rose at an annualized rate of 0.7 percent in August.
Key Events Ahead
- (0830 ET/1230 GMT) The European Central Bank President Mario Draghi will hold a press conference.
- (1030 ET/1430 GMT) Minneapolis Fed President Neel Kashkari gives opening remarks before the Opportunity and Inclusive Growth Institute Fall Conference hosted by the Federal Reserve Bank of Minneapolis.
- (1145 ET/1545 GMT) FedTrade operation 30-year Ginnie Mae (max $1.085 bn)
FX Beat
DXY: The dollar index consolidated within a narrow range as investors awaited U.S. President Donald Trump announcement on who will be appointed as the next Fed Chair. The greenback against a basket of currencies traded flat at 93.69, having touched a high of 94.02 on Monday, its highest since Oct. 6. FxWirePro's Hourly Dollar Strength Index stood at 7.76 (Neutral) by 1000 GMT.
EUR/USD: The euro trimmed early session gains as investors remained cautious ahead of the European Central Bank monetary policy meeting outcome due later in the session. The ECB is certain to cut back on its bond-buying stimulus, however, as low inflation remains a major concern, any reduction in monthly asset purchases would be likely to come with an extension of the programme. The European currency traded flat at 1.1812, having touched a high of 1.1836 earlier in the day, its highest since Oct. 20. FxWirePro's Hourly Euro Strength Index stood at 65.33 (Bullish) by 1000 GMT. On the lower side, the near term support is around 1.1720 and any convincing break below will drag the pair down till 1.1660. On the higher side, near-term resistance is around 1.1850 and any break above will take it to next level till 1.1880/1.1900/1.1928 (61.8% retracement of 1.20925 and 1.16621)/1.2000.
USD/JPY: The dollar declined, extending previous session losses, as investors ignored Wednesday's stronger U.S. durable goods orders and new home sales data and traced weakness in the U.S. Treasury bond yields. The major was trading 0.2 percent down at 113.55, having hit a high of 114.24 the day before, its highest since Jul. 17. FxWirePro's Hourly Yen Strength Index stood at 2.91 (Neutral) by 1000 GMT. On the lower side, any close below 112.30 (233- day MA) confirms minor weakness, a decline till 111.60 (55- day EMA)/111.13 likely. Any convincing close above 114.10 confirms minor bullishness, a jump till 114.50/115.
GBP/USD: Sterling slumped from a 9-day high hit earlier in the day after data showed British retail sales tumbled in October at the fastest pace since early 2009. The economy's CBI monthly retail sales balance declined to -36 from September's two-year high of +42, recording its lowest level since March 2009. Sterling traded 0.2 percent down at 1.3232, having hit a high of 1.3279 earlier, its highest since Oct. 17. FxWirePro's Hourly Sterling Strength Index stood at 87.68 (Slightly Bullish) by 1000 GMT. The near-term major resistance is around 1.3230 and any break above will take the pair to next level till 1.330/1.33374 (Oct 13th, 2017 high). On the lower side, 1.3170 (55- day EMA) will be acting as major support and any break below will drag it down till 1.3100/1.30750 /1.3270 level. Against the euro, the pound was trading 0.2 percent down at 89.27 pence, having hit a high of 88.79 pence on Wednesday, its highest since Oct. 17.
USD/CHF: The Swiss franc steadied after falling to a 5-month low in the previous session, as the greenback edged away from a two-week high set on Monday following a drop in the U.S. Treasury yields. The major trades flat at 0.9899, having touched a high of 0.9939 the day before, it’s highest since May. 16. FxWirePro's Hourly Swiss Franc Strength Index stood at -45.81 (Neutral) by 1000 GMT. On the lower side, near-term support is around 0.9860 (233- day MA) and any break below will drag the pair to next level till 0.9815 (23.6% retracement of 0.9420 and 0.99397)/0.9705/0.9680. The near-term resistance is around 0.9940 and any convincing break above will take it to next level till 0.9985/1.003.
AUD/USD: The Australian dollar rebounded after slumping to a 3-1/2 month low earlier in the day, as renewed weakness in the USD supported the bid tone around the major. The Aussie trades 0.2 percent up at 0.7713, having hit a low of 0.7678, it’s lowest since Jul. 13. FxWirePro's Hourly Aussie Strength Index stood at -29.43 (Neutral) by 1000 GMT. On the lower side, the pair has broken near-term support 0.7680 and any convincing close below will drag it till 0.7600. The near-term resistance is around 0.7760 (5 day MA) and any break above targets 0.7825 (100 – day MA)/0.7860/0.7900/0.7950/0.8000.
Equities Recap
European shares steadied near 4-week lows as markets digested a series of mixed earnings updates, while the euro consolidated within narrow ranges as investors awaited the European Central Bank's decision on reducing its massive stimulus programme.
The pan-European STOXX 600 index advanced 0.1 percent to 387.41 points, while the FTSEurofirst 300 index rallied 0.1 percent to 1,523.87 points.
Britain's FTSE 100 trades 0.4 percent higher at 7,474.00 points, while mid-cap FTSE 250 gained 0.2 percent to 20,120.72 points.
Germany's DAX rose 0.2 percent at 12,981.84 points; France's CAC 40 trades 0.2 percent up at 5,387.05 points.
Commodities Recap
Crude oil prices steadied, despite an unexpected increase in U.S. crude inventories, high U.S. production, and exports. International benchmark Brent crude was trading flat at $58.40 per barrel by 0952 GMT, having hit a high of $58.71 the day before, its highest since Sept. 18. U.S. West Texas Intermediate was trading 0.2 percent higher at $52.22 a barrel, after rising as high as $52.59 on Tuesday, its highest since Sept. 28.
Gold prices rose, extending previous session gains, as the dollar weakened, while the market awaited the European Central Bank monetary policy outcome due later in the day. Spot gold was 0.1 percent up at $1,277.81 an ounce by 0956 GMT, having hit a low of $1,270.88 on Wednesday, the lowest since Oct. 6. U.S. gold futures for December delivery rose 0.2 percent to $1,281.80 an ounce.
Treasuries Recap
The U.S. Treasuries jumped ahead of the country’s initial jobless claims, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasury slumped 2 basis points to 2.42 percent, the super-long 30-year bond yields plunged nearly 2-1/2 basis points to 2.93 percent and the yield on short-term 2-year note traded nearly 1 basis point lower at 1.59 percent.
The German bunds traded range-bound Thursday as markets maintained caution ahead of the European Central Bank’s (ECB) monetary policy decision, to be unveiled today by 11:45GMT. The German 10-year bond yields, which move inversely to its price, fell nearly 1 basis point to 0.47 percent, the yield on 30-year note slumped nearly 2 basis points to 1.26 percent and the yield on short-term 2-year traded flat at -0.70 percent.
The New Zealand bonds closed higher after the country’s trade deficit for the month of September widened as compared to that in August, thus wooing investors away from riskier assets. At the time of closing, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 3.03 percent, the yield on 20-year note also slipped 1 basis point to 3.57 percent and the yield on short-term 2-year ended 1 basis point lower at 2.06 percent.
The Japanese government bonds remained flat during early Asian session as investors remain focused to watch the country’s national consumer price-led inflation index for the month of September, scheduled to be released on October 27 by 19:30GMT. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.06 percent, the yield on long-term 30-year traded flat at 0.86 percent while the yield on short-term 2-year traded 1-1/2 basis points lower at -0.14 percent.
The Australian government bonds slumped after U.S. Treasury yield hit 7-month high of 2.475 percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose 1-1/2 basis points to 2.789 percent, the yield on the long-term 30-year note also jumped 1-1/2 basis points to 3.550 percent and the yield on short-term 2-year traded nearly 1/2 basis point higher at 1.89 percent.
