Market Roundup
- UK Oct construction output -0.2 pct mm (poll -0.5 pct mm); +3.8 pct yy (poll +3.2 pct), biggest annual rise since Dec 2017
- UK Oct manufacturing output -0.9 pct mm (poll 0.0 pct mm); -1.0 pct yy (poll 0.0 pct), biggest annual fall since March 2016
- UK Oct industrial output -0.6 pct mm (poll +0.1 pct mm), biggest fall since may; -0.8 pct yy (poll -0.2 pct), biggest annual fall since Oct 2016
- UK Oct services output +0.2 pct mm; +1.8 pct yy
- UK Oct GDP +0.1 pct mm (poll +0.1 pct mm); +1.5 pct yy (poll +1.6 pct)
- UK Oct GDP +0.4 pct 3m/3m vs Sept +0.6 pct 3m/3m (Reuters poll +0.4 pct), weakest since June
- UK Oct goods export volumes -0.1 pct 3m/3m vs July +1.6 pct 3m/3m, Oct import volumes +2.2 pct 3m/3m vs July 0.0 pct 3m/3m
- UK Oct goods export volumes -1.8 pct m/m vs Sept +2.2 pct m/m, Oct import volumes +3.8 pct m/m vs Sept -4.1 pct m/m
- UK Oct total goods and services trade balance -3.300 bln stg vs sept revised -2.331 bln stg
- UK Oct non-EU goods trade balance -4.251 bln stg (poll -3.15 bln stg) vs Sept revised -2.946 bln stg
- UK Oct goods trade balance -11.873 bln stg (poll -10.5 bln stg) vs sept revised -10.681 bln stg
- Sentix euro zone investor sentiment index slumps to -0.3 in December (forecast 8.1)
- France Nov 2018 reserve assets total decrease to 149634 eur vs previous
- Germany Oct 2018 current account - balance nsa decrease to 15.9 eur vs previous 21.1 eur
Economic Data Ahead
- (0815 ET/1315 GMT) Canadian Mortgage and Housing Corp will report housing starts for the month of November. The indicator is expected to ease at a seasonally adjusted annualized rate of 198,000 after increasing 206,000 in the previous month.
- (0830 ET/1330 GMT) The Statistics Canada is likely to report that building permits decreased 0.4 percent in October after rising 0.4 percent in September.
- (0830 ET/1330 GMT) The Statistics Canada releases the employment report for November. The economy probably shed 23,000 jobs in the previous month.
- (1000 ET/1500 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of October. The report is expected to show that job openings rose to 7.220 million from 7.009 million in October.
Key Events Ahead
- (0715 ET/1215 GMT) European Central Bank's Ignazio Angeloni participates in a discussion organized by Official Monetary and Financial Institutions Forum, London
- (0745 ET/1245 GMT) Bank of Canada Deputy Governor Timothy Lane's speech.
FX Beat
DXY: The dollar index tumbled as soft U.S. jobs data fuelled futures markets to price in only a 44 percent probability of a U.S. rate increase next year compared with nearly 80 percent last Monday. The greenback against a basket of currencies trades 0.2 percent down at 96.56, having touched a low of 96.36, its lowest since Nov 22. FxWirePro's Hourly Dollar Strength Index stood at 6.13 (Neutral) by 1100 GMT.
EUR/USD: The euro rallied to a 3-week peak, as the greenback eased to multi-week lows after Fed policymakers struck a cautious tone about the economic outlook, lowering the expectations of U.S. rate hikes. The European currency traded 0.2 percent up at 1.1416, having touched a high of 1.1442, its highest since Nov. 20. FxWirePro's Hourly Euro Strength Index stood at 36.62 (Neutral) by 1100 GMT. Immediate resistance is located at 1.1455 (November 2 High), a break above targets 1.1472 (November 20 High). On the downside, support is seen at 1.1348 (November 29 Low), a break below could drag it till 1.1305 (November 30 Low).
USD/JPY: The dollar consolidated within narrow ranges against the Japanese yen as concerns that increasing tensions between Washington and Beijing could reduce the chances of a trade deal sent investors seeking safety in safe-haven assets. The major was trading flat at 112.68, having hit a low of 112.23 earlier, its lowest since October 29. FxWirePro's Hourly Yen Strength Index stood at 20.29 (Neutral) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. JOLTS openings. Immediate resistance is located at 113.01 (November 23 High), a break above targets 113.23 (November 22 High). On the downside, support is seen at 112.08 (October 24 Low), a break below could take it lower 111.82 (October 25 Low).
GBP/USD: Sterling eased as investors turned cautious ahead of a parliamentary vote on Britain's Brexit deal with the European Union that Prime Minister Theresa May is widely expected to lose. Moreover, data showing Britain's economy lost momentum as expected in the three months to October raised doubts about the economy's health ahead of Brexit. The major traded 0.3 percent down at 1.2699, having hit a low of 1.27691 earlier; it’s lowest since December 5. FxWirePro's Hourly Sterling Strength Index stood at -113.99 (Slightly Bearish) 1100 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 1.2671 (December 5 Low), a break below targets 1.2640. Against the euro, the pound was trading 0.5 percent down at 89.86 pence, having hit a low of 89.92, it’s lowest since September 21.
USD/CHF: The Swiss franc advanced to a near 2-month peak as the greenback slumped across the board on growing speculation the Federal Reserve might almost be done hiking rates. The major trades 0.1 percent down at 0.9888, having touched a low of 0.9870; it’s lowest since Oct. 16. FxWirePro's Hourly Swiss Franc Strength Index stood at 103.13 (Highly Bullish) by 1100 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 0.9847 (Oct. 15 Low), and any close below that level will drag it till 0.9800.
Equities Recap
European shares slumped, weighed down by losses in chemicals stocks, while investors remained cautious ahead of Britain's parliamentary vote on PM May's Brexit deal.
The pan-European STOXX 600 index plunged 0.7 percent at 343.33 points, while the FTSEurofirst 300 index declined 0.6 percent to 1,355.06 points.
Britain's FTSE 100 trades 0.2 percent down at 6,766.97 points, while mid-cap FTSE 250 eased 0.9 to 17,672.78 points.
Germany's DAX fell 0.5 percent at 10,739.21 points; France's CAC 40 trades 0.4 percent lower at 4,793.53 points.
Commodities Recap
Crude oil declined over 1 percent, reversing gains made last week when producer group OPEC and other key exporters agreed to cut their crude output from January. International benchmark Brent crude was trading 1.0 percent down at $60.70 per barrel by 1106 GMT, having hit a high of $63.67 on Friday, its highest since November 22. U.S. West Texas Intermediate was trading 1.0 percent down at $51.65 a barrel, after rising as high as $54.20 on Friday, its highest since the December 5
Gold prices eased from a fresh 5-month peak touched early in the session, despite the dollar weakening on soft U.S. jobs report that triggered speculation the Federal Reserve may stop raising interest rates sooner than expected. Spot gold was trading 0.1 percent down at $1,246.83 per ounce by 1109 GMT, having touched a high of $1,250.46 on Monday, its highest level since July 11. U.S. gold futures rose 0.1 percent to $1,253.4 per ounce.
Treasuries Recap
The U.S. Treasuries traded narrowly mixed during late afternoon session amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasuries rose nearly 1 basis point to 2.857 percent, the super-long 30-year bond yields remained flat at 3.142 percent and the yield on the short-term 1-year remained tad lower at 2.678 percent.
The German bunds remained mixed during European session after witnessing a better-than-expected trade balance for the month of October, 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 government bonds slumped on the first trading day of the week after the country’s economic growth for the third quarter of this year worsened, disappointing market participants and investors will now remain focused on Japan’s 3-year auction, scheduled to be held on December 11 by 03:35GMT for further direction in the debt market. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slumped 20 basis points to 0.041 percent, the yield on the long-term 30-year note fell 6 basis points to 0.794 percent and the yield on short-term 2-year dipped 3 basis points to -0.143 percent.
The Australian bonds gained across the curve during Asian session as risk appetites softened further amid ongoing tensions regarding the Huawei issue and disappointing U.S. jobs data on Friday night. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 2-1/2 basis points to 2.430 percent (lowest since June 2017), the yield on the long-term 30-year bond also dipped 2-1/2 basis points to 2.962 percent and the yield on short-term 3-year down 1-1/2 basis points to 1.919 percent.
