Market Roundup
- EUR/USD 0.01%, USD/JPY -0.14%, GBP/USD -1.54%, EUR/GBP 1.52%
- DXY 0.35%, DAX 0.09%, FTSE 0.14%, Brent 0.53%, Gold -0.01%
- British PM May battles to save Brexit deal as ministers quit
- BoE rate hike in 2019 now unlikely, money markets suggest
- China sends written response to U.S. trade reform demands -U.S. govt sources
- Pence says "empire and aggression" have no place in Indo-Pacific
- Great Britain Oct Retail Sales YY, 2.2%, 3.0% forecast, 3.0% prev, 3.3% revised
- Great Britain Oct Retail Sales Ex-Fuel YY, 2.7%, 3.3% forecast, 3.2% prev, 3.6% revised
- Great Britain Nov TR IPSOS PCSI, 50.34, 49.38 previous
- Germany Nov TR IPSOS PCSI, 58.62, 57.43 previous
- EZ Sep Eurostat Trade NSA, Eur, 13.1 bln, 11.7 bln previous
- After weak Q3, Germany will not hit 2018 growth forecast - economists
- Mexico's central bank seen hiking key rate to 10-year high
Economic Data Ahead
- (0830 ET/1330 GMT) The Federal Reserve Bank of New York is expected to report that NY manufacturing activity index eased to 20 in November from 21.1 percent in October.
- (0830 ET/1330 GMT) The U.S. Commerce Department is expected to report that retail sales rose 0.5 percent in October after advancing 0.1 percent in September. While excluding autos, retail sales are likely to have gained 0.2 percent, after easing 0.1 percent in the previous month.
- (0830 ET/1330 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 2,000 to a seasonally adjusted 212,000 for the week ended Nov. 9, while continuing claims for the week ended Nov. 9 is expected to increase to 1.630 million from a previous reading of 1.623 million.
- (0830 ET/1330 GMT) The U.S. Labor Department publishes the import and export prices index for the month of October. The import prices are likely to have gained 0.1 percent after rising 0.5 percent in September, while exports are expected to have edged up 0.1 percent after staying flat in the prior month.
- (0830 ET/1330 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity decreased to 20.0 in November from 22.2 in October.
- (1000 ET/1500 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.3 percent in September, after rising 0.5 percent in August.
- (1030 ET/1530 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending November 9.
- (1100 ET/1600 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending November 9.
- N/A Mexico's central bank meets to decide its interest rate and is expected to raise interest rates to 8 percent.
Key Events Ahead
- (0800 ET/1300 GMT) BoE MPC member Silvana Tenreyro speaks at BoE conference in London.
- (0815 ET/1310 GMT) Keynote speech by ECB Chief Economist Peter Praet at the Credendo Trade Forum 2018 in Brussels, Belgium
- (0915 ET/1435 GMT) Keynote speech by ECB Vice President Luis de Guindos at General Annual Meeting of Foreign Bankers Association at Amsterdam
- (1000 ET/1500 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles gives semiannual testimony, "Federal Reserve's Supervision and Regulation of the Financial System" before the Senate Banking Committee in Washington.
- (1130 ET/1630 GMT) Fed Chairman Jerome Powell participates in Community Listening Session on Post-Hurricane Harvey Recovery Efforts in a Low-to-Moderate-Income Houston Neighborhood hosted by the Dallas Fed Houston Branch, in Texas.
- (1300 ET/1800 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic participates in a moderated discussion before the Global Interdependence Center "Central Banking Series: Madrid," in Madrid, Spain.
- (1500 ET/2000 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari participates in a moderated question-and-answer session with the Minnesota AgriGrowth Council in Minneapolis.
- (1600 ET/2100 GMT) Ontario Finance Minister Vic Fedeli will present the fall economic statement of Canada's biggest province in Toronto.
FX Beat
DXY: The dollar index consolidated within narrow ranges ahead of Federal Reserve chairman Jerome Powell's speech later in the day. The greenback against a basket of currencies trades 0.1 percent up at 97.15, having touched a high of 97.69 on Monday, its highest since June 2017. FxWirePro's Hourly Dollar Strength Index stood at -46.20 (Neutral) by 1100 GMT.
EUR/USD: The euro surged on news that Italian Prime Minister Giuseppe Conte was looking to work with the European Union over his government's 2019 budget, which has been rejected by Brussels. The European currency traded 0.1 percent up at 1.1313, having touched a low of 1.1215 on Monday, its lowest since June 2017. FxWirePro's Hourly Euro Strength Index stood at 46.11 (Neutral) by 1100 GMT. Immediate resistance is located at 1.1368 (November 9 High), a break above targets 1.1420 (October 26 High). On the downside, support is seen at 1.1264, a break below could drag it till 1.1230.
USD/JPY: The dollar plunged, extending losses for the third straight session, as uncertainty over Britain's Brexit deal with the European Union triggered a fresh wave of risk-off sentiment across the board. The major was trading 0.1 percent down at 113.47, having hit a high of 114.23 on Monday, its highest since October 4. FxWirePro's Hourly Yen Strength Index stood at 43.72 (Neutral) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, unemployment benefit claims, import, and export price index and speeches from FOMC members Quarles, Bostic, and Fed chair Powell. Immediate resistance is located at 114.55 (October 4 High), a break above targets 115.00. On the downside, support is seen at 113.07 (November 5 Low), a break below could take it lower 112.60 (November 1 Low).
GBP/USD: Sterling slumped to a 2-week low below the 1.2800 handle after British Prime Minister Theresa May's Brexit secretary and other ministers quit one by one, stating that they could not support PM's terms of the draft agreement with the European Union. The major traded 1.4 percent down at 1.2798, having hit a high of 1.3071 on Wednesday; it’s highest since November 08. FxWirePro's Hourly Sterling Strength Index stood at -75.75 (Slightly Bearish) 1100 GMT. Immediate resistance is located at 1.3072 (November 14 High), a break above could take it near 1.3106 (November 6 High). On the downside, support is seen at 1.2740, a break below targets 1.2700. Against the euro, the pound was trading 1.3 percent down at 88.18 pence, having hit a high of 86.55 on Tuesday, it’s highest since Apr. 18.
USD/CHF: The Swiss franc rose to a 1-week peak as the greenback retreated further from a 16-month peak against a basket of currencies. The major trades 0.05 percent down at 1.0055, having touched a low of 1.0128 on Tuesday; it’s lowest since March 2017. FxWirePro's Hourly Swiss Franc Strength Index stood at 7.20 (Neutral) by 1100 GMT. On the higher side, near-term resistance is around 1.0145 and any break above will take the pair to next level till 1.0190. The near-term support is around 0.9937 (September 23 Low) and any close below that level will drag it till 0.9897 (October 17 Low).
Equities Recap
European shares slumped, weighed down by losses in autos and banking stocks, while sterling tumbled as British Prime Minister Theresa May's government was plunged into fresh crisis over Brexit.
The pan-European STOXX 600 index plunged 0.5 percent at 360.46 points, while the FTSEurofirst 300 index fell 0.5 percent to 1,418.69 points.
Britain's FTSE 100 trades 0.2 percent up at 7,048.74 points, while mid-cap FTSE 250 eased 0.9 percent to 18,745.94 points.
Germany's DAX rose 0.1 percent at 11,420.55 points; France's CAC 40 trades 0.3 percent lower at 5,055.38 points.
Commodities Recap
Crude oil prices surged over 1 percent on OPEC's message that it may cut crude output. International benchmark Brent crude was trading 1.05 percent up at $66.51 per barrel by 1134 GMT, having hit a low of $65.20 on Tuesday, its lowest since mid- March. U.S. West Texas Intermediate was trading 0.4 percent up at $56.18 a barrel, after falling as low as $54.79 on Tuesday, its lowest since Nov. 2017.
Gold prices edged higher as the greenback weakened against the euro after Italy agreed to work with EU on its 2019 budget. Spot gold rose 0.1 percent at $1,210.80 per ounce at 1136 GMT, having hit a low of $1199.82 on Tuesday, its lowest since Oct. 11. U.S. gold futures were up 0.1 percent $1,211.7 per ounce.
Treasuries Recap
The U.S. Treasuries gained during late afternoon session ahead of the country’s core retail sales for the month of October, scheduled to be released today by 13:30GMT. The yield on the benchmark 10-year Treasuries fell nearly 2 basis points to 3.103 percent, the super-long 30-year bond yields slipped nearly 1 basis point to 3.347 percent and the yield on the short-term 2-year remained nearly 1-1/2 basis points lower at 2.850 percent.
The German bunds jumped during European session after the United Kingdom’s Brexit Minister Dominic Raab resigned, after the disagreement with Prime Minister Theresa May over the set of Brexit negotiations. The German 10-year bond yields, which move inversely to its price, slumped nearly 4 basis points to 0.362 percent, the yield on 30-year note plunged 3 basis points to 1.031 percent and the yield on short-term 2-year traded nearly 1-1/2 basis points lower at -0.649 percent.
The Japanese government bonds traded flat amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.110 percent, the yield on the long-term 30-year note remained nearly flat at 0.870 percent and the yield on short-term 2-year fell 6 basis points to -0.134 percent.
The Australian government bonds slumped across the curve during Asian session following the better-than-expected October employment report, which witnessed a big jump in full-time jobs. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 2-1/2 basis points to 2.728 percent, the yield on the long-term 30-year bond also jumped 2-1/2 basis points to 3.238 percent and the yield on short-term 2-year up 3 basis points to 2.090 percent.
