Market Roundup
- RBNZ says too early to judge effectiveness of new macro policy rules on Auckland, recent NZD levels a significant buffer for economy.
- U.S. Treasury’s Lew urges China to stick to its reform path.
- Dollar hits new 7-month high soars vs euro.
- Most net shorts in U.S. bonds since early Aug-JP Morgan.
- Oil rises after IEA reports sharp decline (-20%) in investment in 2015.
- Kashkari, critic of easy Fed policy, to run Minneapolis Fed.
- Fed’s Kocherlakota won’t participate in December meeting.
- Portugal left set to oust centre-right, roll back austerity.
Looking Ahead – Economic Data (GMT)
- 23:30 Australia Consumer Sentiment Nov 4.2%-previous
- 23:50 Japan Foreign Bond Investment w/e 882.8b- previous
- 23:50 Japan Foreign Invest JP Stock w/e187.1b- previous
- 23:50 Japan Corp Goods Price MM* Oct forecast -0.4%, -0.5%- previous
- 23:50 Japan Corp Goods Price YY* Oct forecast -3.5%, -3.9%- previous
- 23:50 Japan Machinery Orders MM* Sep forecast 3.3%, -5.7%- previous
- 23:50 Japan Machinery Orders YY* Sep forecast -4%, -3.5%- previous
- 05:30 China Urban investment (ytd)yy* Oct forecast 10.2%, 10.3%- previous
- 05:30 China Industrial Output YY* Oct forecast 5.8%, 5.7%- previous
- 05:30 China Retail Sales YY*Oct forecast 10.9%, 10.9%- previous
Looking Ahead – Events, Other Releases (GMT)
- 01:30 Bank of Japan board member Yutaka Harada speaks at Utsunomiya
Currency SummariesEUR/USD is likely to find support at 1.0670 levels and currently trading at 1.0714 levels. The pair has made session high at 1.0714 and hit lows at 1.0674 levels. The US dollar edged higher against euro on Tuesday after the single currency was supported by dollar index which hit 7 month high boosted by widening rate differentials in favor of U.S. Treasuries on broad expectations that Federal Reserve rise interest rate in December . Dollar rose sharply against major currencies on Friday after U.S. non-farm payroll report showed a rise of 271,000 last month, printing better than expected figures at 180,000. The greenback rose 0.6 percent against the euro which last traded at 1.0680. The dollar is trading at the highest level since April 24 against the euro. The single currency has lost nearly 3 percent against the dollar in November’s first week. To the upside, immediate resistance can be seen at 1.0750. To the downside, immediate support level is located at 1.0680 levels.GBP/USD is supported in the range of 1.5084 and currently trading at 1.5112 levels. It reached session high at 1.5143 and hit low at 1.5101 levels. Sterling declined modestly against the dollar on Tuesday, as traders waited for the upcoming UK labour market data on Wednesday for clues on when the Bank of England may revise interest rates. Average weekly earnings and unemployment figures, are the key economic data set to be released from UK. The BoE is paying close attention to labour market as it considers raising rates for the first time since the financial crisis. Sterling was flat on Tuesday at $1.5109, not far from a 6 1/2-month low of $1.5027 it reached on Friday after a stronger U.S. jobs report that bolstered the view that the U.S. Federal Reserve would raise interest rates in December. Against a broadly weaker euro, the pound was half a percent higher at 70.735 pence. To the upside, immediate resistance can be seen at 1.5144. To the downside, immediate support level is located at 1.5090 levels.USD/JPY is supported around 122.64 levels and currently trading at 123.18 levels. It to hit session high at 123.28 and made session lows at 123.04 levels. The US dollar decline slightly against Japanese’s Yen on Tuesday after data showed that, U.S. import prices slipped in October as the price of petroleum and a range of goods declined, giving indication that a strong dollar and soft global demand continued to exert downward pressure on imported inflation. Data on Tuesday showed a surprise increase in wholesale inventories in September, suggesting that the slowdown in economic growth in the third quarter was not as expected as initially believed. The Labor Department said import prices slipped to 0.5 percent last month after declining 0.6 percent in September. Import prices have now fallen in 14 of the last 16 months. Imported petroleum prices fell 2.1 percent after slipping 6.0 percent in September. Weak inflation pressures, however, are unlikely to discourage the U.S. central bank from increasing interest rates next month after strong showing from job sector on Friday. The unemployment rate fell to a 7-1/2-year low of 5.0 percent. A tightening labor market could give Fed officials confidence that inflation will gradually move toward its target. To the upside, immediate resistance can be seen at 123.23. To the downside, immediate support level is located at 122.96 levels. USD/CAD is supported at 1.3240 levels and is trading at 1.3265 levels. It has made session high at 1.3281 and lows at 1.3246 levels. The Canadian dollar slipped slightly lower against its US counterpart on Tuesday, as crude oil prices declined and weak Chinese inflation data added pressure on the Canadian dollar. China’s October inflation data showed declining trend intensifying deflationary pressure, adding pressure on central bank to add more stimulate to the slowing economy by year-end. The consumer price index (CPI) declined more than expected, rising 1.3 percent from a year earlier. Compared with 1.6 percent in September, National Bureau of Statistics (NBS) data showed on Tuesday. The currency’s strongest level of the session was C$1.3244, while its weakest level was C$1.3281, trading in a tight range. The Canadian bond market is set to remain closed early ahead of Wednesday’s national Remembrance Day holiday. To the upside, immediate resistance can be seen at 1.3280. To the downside, immediate support level is located at 1.3244 levels.Equities RecapEuropean shares turned higher on Tuesday in volatile trade, supported by a weak euro even as losses among commodity stocks and political uncertainty in Portugal weighed.UK’s benchmark FTSE 100 closed down by 1 percent, the pan-European FTSEurofirst 300 ended the day down by 1.1 percent, Germany’s Dax ended down by 1.6 percent, France’s CAC finished the day downby 1.6percent.U.S. stocks were mixed on Tuesday afternoon, as the decline in Apple stocks put pressure on the major indices.Dow Jones closed down by 0.99 percent, S&P 500 ended down by 0.97 percent, Nasdaq finished the day down by 1 percent.Treasuries RecapU.S. Treasuries prices rose on Tuesday with benchmark yields rebounding from a more than three-month high on demand from investors seeking bargains after a market sell-off on worries about the Federal Reserve raising interest rates in December.Benchmark 10-year Treasuries notes were up 6/32 in price, erasing a modest decline earlier. The 10-year yield was 2.320 percent, down 2 basis points from Monday. It reached 2.377 percent on Monday, its highest intraday level since July 21.The two-year yield was down 2 basis points on the day at 0.866 percent, below Friday’s 0.958 percent, which was its highest since May 2010.Commodities RecapGold fell toward a three-month low on Tuesday as the dollar index hit a 7 month peak on prospects the U.S. Federal Reserve will raise interest rates in December.Spot gold was down 0.3 percent at $1,088.06 an ounce at 3:22 p.m. EST (2022 GMT), while U.S. gold for December delivery settled up 40 cents at $1,088.50 an ounce.Crude prices rose on Tuesday after the International Energy Agency noted a sharp drop in oil investment, though the broader picture of an oversupplied market limited any gains as traders focused on inventory data due on Wednesday.U.S. crude settled up 34 cents at $44.21 a barrel. Brent crude was up 24 cents at $47.43 a barrel by 1931 GMT, having previously fallen for four trading days in a row.
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