Posted at 28 November 2018 / Categories Market Roundups
Market Roundup
Economic Data Ahead
Key Events Ahead
FX Beat
DXY: The dollar index consolidated near a 2-week peak as investors focused on whether Fed Chairman Jerome Powell will address the growing hostility from Trump and also indications as to how quickly a rate pause might come. The greenback against a basket of currencies trades 0.05 percent up at 97.36, having touched a high of 97.53 earlier, its highest since Nov 13. FxWirePro's Hourly Dollar Strength Index stood at 101.24 (Highly Bullish) by 1000 GMT.
EUR/USD: The euro rebounded after falling to a fresh 2-week low on European Central Bank's data that showed corporate lending growth slowed in the eurozone last month, adding to signs that a worsening economic outlook is starting to take its hit on credit. The European currency traded 0.05 percent up at 1.1288, having touched a low of 1.1267, its lowest since Nov. 14. FxWirePro's Hourly Euro Strength Index stood at -62.69 (Bearish) by 1000 GMT. Immediate resistance is located at 1.1330 (November 12 High), a break above targets 1.1387 (October 30 High). On the downside, support is seen at 1.1263 (November 14 Low)., a break below could drag it till 1.1216 (November 13 Low).
USD/JPY: The dollar rallied to a 2-week peak after Federal Reserve Vice Chair Richard Clarida reaffirmed the need for a further increase in interest rates. Investors now await Fed Chairman Jerome Powell's speech later in the day for insights into the central bank's plans for monetary tightening and its reaction to recent criticism by U.S. President Donald Trump. The major was trading 0.05 percent up at 113.80, having hit a high of 113.90, its highest since November 14. FxWirePro's Hourly Yen Strength Index stood at 45.64 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. preliminary gross domestic product index, wholesale inventories, goods trade balance, personal consumption expenditures, new home sales and speech from Fed Chair Powell. Immediate resistance is located at 114.14 (November 13 High), a break above targets 114.60. On the downside, support is seen at 113.29 (November 14 Low), a break below could take it lower 112.64 (November 16 Low).
GBP/USD: Sterling bounced back after falling to a 2-week trough in the previous session, as investors await the warnings from the British government and the Bank of England on how much damage a no-deal Brexit would do to the economy. The major traded 0.4 percent up at 1.2746, having hit a low of 1.2725 on Tuesday; it’s lowest since November 15. FxWirePro's Hourly Sterling Strength Index stood at -64.25 (Bearish) 1000 GMT. Immediate resistance is located at 1.2819 (November 21 High), a break above could take it near 1.2884 (November 19 High). On the downside, support is seen at 1.2723 (November 14 Low), a break below targets 1.2698 (October 31 Low). Against the euro, the pound was trading 0.4 percent up at 88.26 pence, having hit a high of 88.25 earlier, it’s highest since Nov. 15.
USD/CHF: The Swiss franc continued to consolidate near a 2-week low, as the greenback surged ahead of Fed Chairman Jerome Powell's speech later on Wednesday that could provide cues on U.S. rates hikes in 2019. The major trades 0.05 percent up at 0.9986, having touched a high of 1.0003 on Tuesday; it’s highest since Nov. 19. FxWirePro's Hourly Swiss Franc Strength Index stood at -24.20 (Neutral) 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 0.9952 (October 26 Low), and any close below that level will drag it till 0.9897 (October 17 Low).
Equities Recap
European shares bounced back as the trade war fears eased on the prospect of a meeting between the U.S. and Chinese presidents at a G20 meeting in Argentina.
The pan-European STOXX 600 index surged 0.1 percent at 357.81 points, while the FTSEurofirst 300 index rallied 0.1 percent to 1,410.00 points.
Britain's FTSE 100 trades 0.1 percent down at 7,012.22 points, while mid-cap FTSE 250 declined 0.05 percent to 18,654.43 points.
Germany's DAX rose 0.1 percent at 11,317.06 points; France's CAC 40 trades 0.3 percent higher at 4,997.62 points.
Commodities Recap
Crude oil declined, halting a two-day winning streak, despite expectations that OPEC and its partners will next week decide to curb supply. International benchmark Brent crude was trading 0.7 percent down at $60.37 per barrel by 0958 GMT, having hit a low of $58.42 on Friday, its lowest since October 2017. U.S. West Texas Intermediate was trading 0.3 percent up at $52.24 a barrel, after falling as low as $50.14 on Monday, its lowest since the October 2017.
Gold prices declined, weighed down by a robust dollar after a senior U.S. Federal Reserve official reaffirmed the need for a further increase in interest rates. Spot gold was trading 0.1 percent down at $1,213.18 per ounce at 1029 GMT, having eased to its lowest level since Nov. 15 at $1,211.82 on Tuesday. U.S. gold futures were down about 0.1 percent at $1,214.
Treasuries Recap
The U.S. Treasuries traded flat during late afternoon session amid a muted trading session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasuries remained flat at 3.057 percent, the super-long 30-year bond yields slipped 1 basis point to 3.311 percent and the yield on the short-term 2-year hovered around 2.835 percent.
The United Kingdom’s gilts remained mixed during the afternoon session amid dominance of Brexit news-flow in the country, with the Treasury and BoE both set to publish assessments of the draft EU-UK Brexit deal. The yield on the benchmark 10-year gilts, slumped 2-1/2 basis points to 1.369 percent, the super-long 30-year bond yields jumped 2-1/2 basis points to 2.014 percent and the yield on the short-term 2-year traded nearly 2 basis points lower at 0.758 percent.
The German bunds rallied during European session ahead of the European Central Bank’s (ECB) President Mario Draghi’s speech, scheduled to be held on November 29 by 14:00GMT, followed by the country’s unemployment change for the month of November, scheduled to be released on the same day by 08:55GMT for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, fell nearly 1-1/2 basis points to 0.335 percent, the yield on 30-year note also slipped 1-1/2 basis points to 1.003 percent and the yield on short-term 2-year traded steady at -0.651 percent.
The Japanese government bonds crawled downside ahead of the country’s retail sales and industrial production data for the month of October, scheduled to be released on today and 29 respectively by 23:50GMT. The yield on the benchmark 10-year JGB note, which moves inversely to its price, jumped to 0.099 percent, the yield on the long-term 30-year note remained tad higher at 0.813 percent while the yield on short-term 2-year fell to -0.134 percent, from yesterday’s 0.139 percent.
The Australian government bonds remained tad higher during Asian session as investors’ risk appetite showed downward signs, tracking a similar movement in the United States’ Treasuries. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slipped 1/2 basis point to 2.627 percent, the yield on the long-term 30-year bond fell nearly 1 basis point to 3.150 percent and the yield on short-term 2-year traded nearly steady at 2.032 percent.