Posted at 03 December 2018 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index eased as investors rushed into riskier assets on news that China and the United States will attempt to bridge their differences via new talks aimed at reaching a deal within 90 days. The greenback against a basket of currencies trades 0.1 percent down at 97.10, having touched a high of 97.54 on Wednesday, its highest since Nov 13. FxWirePro's Hourly Dollar Strength Index stood at -23.37 (Neutral) by 1000 GMT.
EUR/USD: The euro surged as the Italian parliament commences voting this week on the government's contested 2019 budget, with Prime Minister Giuseppe Conte being optimistic that a deal can be agreed with the European Commission. Moreover, better-than-expected Eurozone's Markit manufacturing PMI supported the bid tone around the major. The European currency traded 0.3 percent up at 1.1346, having touched a high of 1.1401 on Thursday, its highest since Nov. 23. FxWirePro's Hourly Euro Strength Index stood at 67.66 (Neutral) by 0500 GMT. Immediate resistance is located at 1.1420 (November 16 High), a break above targets 1.1472 (November 20 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 edged up as risk sentiment revived following a truce between the United States and Chinese leaders on trade tariffs. Washington and Beijing agreed at the weekend to halt additional tariffs in a deal that keeps their trade war from escalating. The major was trading 0.1 percent up at 113.53, having hit a high of 114.03 on Wednesday, its highest since November 13. FxWirePro's Hourly Yen Strength Index stood at -0.54 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. manufacturing PMI's, construction spending and FOMC member Brainard's speech. Immediate resistance is located at 114.03 (November 28 High), a break above targets 114.23 (November 12 High). On the downside, support is seen at 113.09 (November 15 Low), a break below could take it lower 112.88 (November 22 Low).
GBP/USD: Sterling slumped to a 1-month low as Prime Minister Theresa May faces a challenge to get lawmakers to back her deal to keep close economic ties with the bloc, which she agreed with the EU in November. Investors seem to have ignored upbeat UK Markit manufacturing PMI amid growing concerns over Brexit deal. The major traded 0.3 percent down at 1.2709, having hit a low of 1.2708 earlier; it’s lowest since October 31. FxWirePro's Hourly Sterling Strength Index stood at -82.34 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.2853 (November 19 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2695 (October 30 Low), a break below targets 1.2661 (August 15 Low). Against the euro, the pound was trading 0.4 percent down at 89.06 pence, having hit a low of 89.24 on Friday, it’s lowest since Nov. 19.
USD/CHF: The Swiss franc eased, extending losses for the third straight session, as risk sentiment revived across the global markets. The major trades 0.05 percent up at 0.9990, having touched a high of 1.0005 on Wednesday; it’s highest since Nov. 19. FxWirePro's Hourly Swiss Franc Strength Index stood at -95.54 (Slightly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0026 (Oct. 26 High) and any break above will take the pair to next level till 1.0050 (Nov. 7 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 surged, boosted by gains in miners, autos, tech, and oil stocks, while sterling slumped to a 1-month trough amid growing concerns over the British parliament's vote on Brexit next week.
The pan-European STOXX 600 index rallied 1.8 percent at 364.02 points, while the FTSEurofirst 300 index advanced 1.9 percent to 1,435.78 points.
Britain's FTSE 100 trades 2.4 percent up at 7,145.44 points, while mid-cap FTSE 250 surged 1.3 to 18,725.44 points.
Germany's DAX rose 2.6 percent at 11,548.26 points; France's CAC 40 trades 2.1 percent higher at 5,106.61 points.
Commodities Recap
Crude oil prices rallied by more than 5 percent ahead of a meeting this week of the producer cartel OPEC that is expected to cut supply. International benchmark Brent crude was trading 5.1 percent up at $61.98 per barrel by 1024 GMT, having hit a low of $57.48 on Thursday, its lowest since October 2017. U.S. West Texas Intermediate was trading 5.2 percent up at $53.17 a barrel, after falling as low as $49.44 on Thursday, its lowest since the October 2017.
Gold prices surged to a more than 3-week high as the greenback weakened after the United States and China agreed to a 90-day truce in a trade dispute. Spot gold was trading 0.8 percent up at $1,231.20 per ounce at 1026 GMT, having touched its highest level since Nov. 7 at $1,232.17 earlier in the session. U.S. gold futures were up 0.8 percent at $1,235.2 per ounce.
Treasuries Recap
The U.S. Treasuries slumped during late afternoon session ahead of the country’s ISM manufacturing PMI report for the month of November, due today by 15:00GMT. The yield on the benchmark 10-year Treasuries jumped nearly 3 basis points to 3.326 percent, the super-long 30-year bond yields rose 1-1/2 basis points to 3.326 percent and the yield on the short-term 2-year traded 3 basis points higher at 2.841 percent.
The United Kingdom’s gilts traded mixed during the afternoon session after the country’s manufacturing PMI for the month of November beating market expectations, also rising from that in October, with the long-term yields gaining the highest. Further, the 5-year auction, due on December 4 by 10:45GMT will add further direction to the debt market. The yield on the benchmark 10-year gilts, remained tad lower at 1.362 percent, the super-long 30-year bond yields jumped 4 basis points to 2.083 percent and the yield on the short-term 2-year traded steady at 0.772 percent.
The German bunds slipped during European session after the country’s manufacturing PMI remained tad higher during the month of November. The German 10-year bond yields, which move inversely to its price, rose 1-1/2 basis points to 0.323 percent, the yield on 30-year note also climbed 1-1/2 basis points to 0.993 percent and the yield on short-term 2-year traded 1 basis point higher at -0.585 percent.
The Australian government bonds slumped across the curve during Asian session oafter China and United States leaders brokered a truce in their trade conflict. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose 3 basis points to 2.623 percent, the yield on the long-term 30-year bond also climbed 3 basis points to 3.147 percent and the yield on short-term 2-year up 1/2 basis point to 2.015 percent.